The G-7 meeting in Germany has made at least one key point absolutely clear: President Biden’s so-called energy transition to renewable fuels is a complete failure. Not just in the U.S.: Globally. An utter failure.
In Europe, countries are talking renewables, but they are also reopening coal plants. That’s because they can’t get enough Russian oil and gas supplies or what they can get is too expensive, or both.
Austria, Germany, Italy, and the Netherlands — all are reopening coal plants. Their so-called green strategies? Shoved aside.
They made a transition alright: Back to the worst carbon polluters. The president of Nigeria, which is a big oil and gas producer, is berating the Europeans for thinking renewables will pave the way to industrial prosperity.
European Brent oil is running around $115; West Texas crude is about the same. Gasoline just under $5 is causing widespread political backlash and threatens economic recession. Mr. Biden’s green strategy is in complete collapse.
Most regrettably, the guy with a smile on his face is Vladimir Putin. The sanctions strategy has backfired on the U.S. and NATO. Mr. Putin’s making money hand over fist.
His ruble currency is at a pre-war high; it’s the pound and the euro that have been sinking out of sight. Mr. Putin has found new customers: China and India.
India’s Russian imports have moved to a million barrels a day in June from 30,000 barrels a day in February. When the Indian finance minister was asked why he’s doing this, and whether he’s undermining the western defense of Ukraine, he responded simply: “Everyone else is buying Russian oil, why shouldn't we?”
Hate to say it, but he’s right. I hate to say this, but Mr. Putin has outsmarted the West.
If Mr. Biden had been willing to face reality and pull back on his war against fossil fuels by waving all his regulations and restrictions and sanctions on fracking, pipelining, refining, and so forth — if he had shown some flexibility in the face of skyrocketing energy prices and a political revolt at home — then it’s quite possible that energy supplies would be much greater today for all components and distillates. Prices also would be lower, or at the very least futures prices would be significantly lower.
All of which would’ve added relief to the West’s energy crisis. Lower prices would’ve hurt Vladimir Putin’s war machine financing. But Mr. Biden was stubborn, self-centered, and politically narcissistic. He has utterly failed to help the NATO coalition or to help ordinary working people.
All of this could have been mitigated, if not avoided, but for his stubbornness. Clinging to this idea of a 100 percent transition to renewables was craziness.
Now comes the craziest part of all. After gimmicks like a gas tax holiday, running down our strategic petroleum reserves (which are there for national security, not political price-fixing), and even debit card subsidies for gasoline, here’s the latest: Price controls. Yup, price controls. I’m surprised it took the socialists so long to get there.
Secretary Yellen is leading the way. The distinguished former Fed chairwoman who is married to a Nobel Prize winner is touting price controls on Russian oil. Really?
Wait: It gets better.
President Macron wants to go really big. He wants price controls on all oil producers. Russia, the Saudis, OPEC, probably Venezuela, maybe Iran. Who knows? Probably, his world oil price controls would mean — you guessed it — price controls on American oil, too. Right?
That's only fair. Global oil price controls. Not on solar or wind, but on fossil fuels.
As I shut my eyes and lean back, I see Richard Nixon, Jerry Ford, Jimmy Carter. “Whip inflation now” — on a grand scale. It’s a global race to socialism. Never mind the obvious shortages, energy wars, or just plain stupidity of repeating an age old socialist mistake.
Then again, when you look around that G-7 table — Messrs. Biden, Trudeau, Scholz, Macron, Draghi, and Johnson — I don’t see much of a commitment to free-market capitalism. I don’t see any Reagans. I don’t see any Thatchers. I don't see Milton Friedman. I don’t see Adam Smith. I don't see the signers of the American Declaration of Independence.
Oh, wait a minute, that’s tomorrow's special. This is just a tease. Tomorrow’s theme is, “Restoring Life, Liberty and the Pursuit of Happiness.”
Works for me. Because Americans don’t see much life, liberty, or happiness right now. But I know a way out. And, yes, the cavalry’s coming. Woke, big-government socialism is dead.
Larry Kudlow was the Director of the National Economic Council under President Trump 2018-2021. His Fox Business show "Kudlow" airs at 4 p.m &. radio show airs on 770 ABC from 10:00 a.m. to 1:00 p.m.