The EU Vows To Solve Energy Price Problem It Helped To Create

European Commission President Ursula Von Der Leyen and other officials at the EU announced Monday that they will meet soon to devise a plan for an ‘emergency intervention’ into the collective’s power markets in an effort to calm skyrocketing electricity prices. The move comes as futures prices for German electricity slammed through the 1,000 Euro per MWH level for the first time.

Reuters reports that the Czech Republic, which currently holds the EU’s rotating presidency, is advocating for the EU to establish a “cap” on natural gas prices used for electricity generation as winter approaches. No word from any of the EU officials on who would ultimately pay the tab for such a cap, which would assuredly have to be paid by someone. Because the market price for natural gas isn’t likely to conform itself to the will of the EU’s policymakers, regardless of how vigorously they advocate for it to do so.

Czech Industry Minister Jozef Sikela told a press conference that the main objective for the EU “is to separate the price of electricity from the price of gas, and thus prevent Putin from dictating to Europe prices of electricity with his shenanigans with gas supplies.” Over the weekend, the BBC, citing a study by Rystad Energy, reported that Russia has been flaring roughly $10 million worth of natural gas per day to avoid sending the gas into Germany, which is desperately trying to fill its gas storage levels in preparation for the coming winter. The story also notes that Russia has recently been shipping just 20% of normal volumes through its Nordstream 1 pipeline in a transparent exercise of geopolitical leverage designed to starve Germany’s economy and people of needed energy.

Which leads to the question of whether the EU and national governments in Europe possess the ability to properly address this particular problem. After all, the reason why Vladimir Putin and Russia have the geopolitical leverage in the first place is largely thanks to energy policy-related decisions made during this century by these very same government entities. The reality here is that Europe – and increasingly, the rest of the world – today faces an energy crisis that is mainly a product of government decision making.

Not that any of the continent’s leaders want to admit it, of course. Speaking to government ministers at the Élysée last week, French President Emmanuel Macron said the current crisis signals an end to abundance. “What we are currently living through is a kind of major tipping point or a great upheaval … we are living the end of what could have seemed an era of abundance … the end of the abundance of products of technologies that seemed always available … the end of the abundance of land and materials including water,” he said.

If the current crisis is ever going to be solved, we must be honest about the reasons behind this “end to abundance.” The reality is that there is no real shortage of natural gas today. There is no real shortage of oil, and certainly no real shortage of coal, for goodness sake. Yet, we are undeniably in the midst of an energy crisis that has resulted from regional shortages of these very commodities, shortages which have been artificially created by government restrictions on the production, distribution and usage of them.

Many will respond to that assertion by stating that such decisions were made due to climate change considerations and as part of sanctions imposed on Putin and Russia in response to his heinous war on Ukraine, and there is no denying those motivations. But also undeniable is the fact that Europe was already trying to cope with a building energy crisis long before Mr. Putin ever began massing troops along his country’s border with Ukraine, and that Germany and other European nations had voluntarily surrendered any semblance of real energy security long before then, choosing to make themselves client states of Russian oil and natural gas supplies in the process as an integral piece of their climate change planning.

Those decisions were all taken voluntarily and beyond any external coercion, and those decisions have played a major role in creating the energy fix in which Europe is mired today. Now, the very same government entities who made those decisions to artificially intervene into the energy markets to try to choose winners and losers by government edict are assuring their populations that the next round of interventions they plan to impose on the energy markets will somehow resolve the problem. If this seems to you unlikely to be the actual outcome of such efforts, you are not alone.

What this should all illustrate for the average reader is a stark and compelling truth about this energy transition that I wrote about in June: We have the wrong class of people making these vitally important energy policy decisions for the rest of us. The people making those decisions are virtually all a part of the class of international elites, the wealthy and powerful of our society, mostly from the developed nations of the West. These are the people who fly fleets of private jets and sail armadas of massive yachts into the cities that serve as host to the various annual climate conferences at which such collective decisions are often made. These are, by and large, people whose lives will be minimally impacted – if impacted at all – by the terrible hardships and mass human deprivations their decisions will inevitably cause if they aren’t corrected.

In addition to the populations of Europe, the most heavily impacted by these consequences we see already coming about will inevitably be the poorest citizens in developing nations who enjoy none of the trappings of Western elitism or the power that derives from the holding of high public office. Nations like Sri Lanka, whose once-prosperous society has completely collapsed during 2021; or Pakistan, where daily blackouts of 12 hours or longer have become a new way of life for millions.

In fairness to Von Der Leyen and other EU officials, they have little choice today but to at least appear to be addressing the crisis they all see coming. They are, after all, responsible, in all senses of that word. We can hope they might make good decisions this time, but their track record thus far is not at all encouraging, and their options at this late point are painfully limited.