Global economies are facing a potential energy shock—the third such shock of the past half century. Energy costs and security have returned to center stage, as has the realization that the world remains deeply dependent on reliable supplies of petroleum, natural gas, and coal. And all this has arrived during an inflation itself partially the result of higher energy prices that are raising production and transportation costs across industries.
In these circumstances, policymakers are beginning to grasp the enormous difficulty of replacing even a mere 10% share of global hydrocarbons—the share supplied by Russia—never mind the impossibility of trying to replace all of society’s use of hydrocarbons with solar, wind, and battery (SWB) technologies. Two decades of aspirational policies and trillions of dollars in spending, most of it on SWB tech, have not yielded an “energy transition” that eliminates hydrocarbons. Regardless of climate-inspired motivations, it is a dangerous delusion to believe that spending yet more, and more quickly, will do so. The lessons of the recent decade make it clear that SWB technologies cannot be surged in times of need, are neither inherently “clean” nor even independent of hydrocarbons, and are not cheap.
The only path to significantly lower energy prices while maintaining vibrant economies—and unlinking them from Russian oil and natural gas—is to radically increase the production of hydrocarbons. The U.S. holds the greatest potential for achieving this outcome, and without government subsidies. On the contrary: increasing the production of these energy sources would generate government revenues, increase U.S. geopolitical soft power, and, in due course, save the world trillions of dollars.