Drill, Europe, Drill
The Battle for Hormuz proves Europe can't outsource its energy security. Here’s the drilling-and-price-spike story in 8 charts.
Back in 2008, while running for the White House, Barack Obama declared that our planet is “in peril” due to climate change. He continued, saying one of the major challenges facing the US is “what we will do about our addiction to foreign oil.”
In that address, known as the “New Energy For America” speech, Obama said, “We simply cannot pretend, as Senator McCain does, that we can drill our way out of this problem.” He went on, saying, “Breaking our oil addiction is one of the greatest challenges our generation will ever face. It will take nothing less than a complete transformation of our economy.”
In June 2013, Obama again mocked the idea of increased oil and gas drilling. During a speech at Georgetown University, Obama introduced what he called a “new national climate action plan” that he claimed would make the US “a leader — a global leader — in the fight against climate change.” In that speech, Obama used the word “climate” two dozen times. He claimed Congress should “end the tax breaks for big oil companies, and invest in the clean-energy companies that will fuel our future.”
The line from that speech that resonates today is this one: “We can’t just drill our way out of the energy and climate challenge that we face. That’s not possible.”
Those speeches haven’t aged well.
I’m not picking on Obama. That said, his rhetoric about drilling captured the anti-hydrocarbon/anti-drilling sentiment that prevails among climate activists and, unfortunately, among Europe’s political leaders. As the Battle for Hormuz continues with no end in sight, it’s clear that the global economy has become too dependent on the hydrocarbons and other strategic commodities that flow through that narrow waterway.
Europe’s energy strategy was built on imports and hopium. Both just ran aground in the Strait of Hormuz.
Since February 25, three days before the US and Israel launched the air war against Iran, the price of natural gas delivered to the TTF trading hub in Holland had jumped by about 85%. Meanwhile, the US has been partially insulated from the energy-price shocks hitting Europe and the rest of the world. Natural gas prices in the US have increased by about 3% over that same time period.
What’s the difference? The answer is simple: The US actively drills for oil and gas. Europe doesn’t.
Here are eight charts that show how Europe’s refusal to drill has made it heavily dependent on imported hydrocarbons and, therefore, left it at the mercy of the energy price spikes now slamming consumers around the world. The charts also show why — like it or not — it’s time for Europe to drill, baby, drill.
