The world is on the brink of an energy crisis, which isn’t a shortage or a supply chain issue but an international relations problem, similar to the 1970’s Arab oil embargo, according to a new report by energy advocacy organization Power the Future.

The energy crisis, the report noted, is the direct result of “deliberate and myopic energy policies” made by political leaders.

In Europe, countries are facing skyrocketing energy bills and an increasing dependence on Russia for energy. Additionally, European citizens are facing unaffordable food prices and are confronting record high heating and utility bills. 

Americans are feeling the pinch too. Gas prices are surging, recently hitting a seven-year high, with oil prices reaching $80 per barrel for the first time since 2014, the report noted.

“Although the [energy crisis] is more acutely felt in Europe, unless the Biden administration takes action, it is headed to America soon,” warned Daniel Turner, founder and executive director of Power the Future.

“As the energy crisis is a supply-side one, America needs to protect and encourage increased supply, which means increased production,” Turner told Hart Energy. “Yet the steps taken by the Biden administration from fracking bans, land use bans, denying permitting, including the recent decision to reverse access to Alaska’s petroleum reserve, are inhibiting production and causing a dwindling of supply.”

“Oil and gas does not come online easily,” he continued. “It is a labor and capital-intensive enterprise, and the deliberate disruptions to our domestic supply will have lasting repercussions.”

The ‘man-made’ crisis

Turner noted that the European Union is experiencing “massive energy disruptions of its own creation.”

The EU’s climate policy initiative—European version of the Green New Deal—is an effort to cut greenhouse gas emissions by 55% by the end of the decade. But natural gas prices in Europe have jumped nearly 600% this year on concerns that there simply won’t be enough of it to handle the expected winter surge in demand. Additionally, soaring natural gas prices compelled the U.K to restart an old coal plant to help it meet its energy needs, Turner said.

Although COVID-19 has played a significant role in amplifying the ‘man-made’ energy crisis, the report noted that in reality, this crisis has been years in the making. The energy shortages and dramatically rising prices are the product of a decades-long effort by environmentalists to completely eliminate fossil fuels at any cost.

More recently, the focus on ESG and sustainability has demonized fossil fuels to the extent that several institutional investors and governments have eliminated oil and gas from their portfolios and have begun been flowing capital to more socially acceptable low-carbon alternatives.

For instance, BlackRock announced last year it would no longer finance fossil fuel development while Wall Street gurus like Jim Cramer have called the oil industry “uninvestable.”

The report points to the Green New Deal and its adherents as a key driver of the grim outlook for the fossil fuel market.

“Just some of the specifics include ending fossil fuels entirely in around ten years, abandoning the Keystone XL pipeline and imposing a moratorium on issuing new oil and gas leases on federal lands. There are other—just as ludicrous—proposals floating around in reconciliation, such as the Clean Electricity Performance Program, which would raise electricity costs by penalizing natural gas and requiring more intermittent, expensive renewables,” according to the in-depth report.

What now?

While most will agree with the notion that affordable, reliable and abundant renewable energy is the need of the hour, the challenge, however, is that other than being (theoretically) abundant, renewable energy is neither reliable nor inexpensive, the report noted. And forcing consumers to rely on it—especially in the middle of a global pandemic and massive supply chain disruptions—is already leading to catastrophe.

So, how can the energy crisis be avoided?

While renewable energy advocates claim the current issues are the result of a global failure to more fully embrace renewable energy sources, the report finds that the answer isn’t all that complicated.

The world will continue to see demand for oil and gas, with fossil fuels being the foundation of the gigantic energy complex. The U.S. Department of Energy forecasts global energy demand to rise another 47% over the next 30 years, with oil remaining the most crucial fuel.

While renewable energy sources should be a component of the global energy framework, the report pointed out that working to eliminate the energy sources like oil and natural gas that have transformed the global economy and raised billions out of poverty is “exceptionally shortsighted.”

Instead, world economies must continue to rely on oil and natural gas while incorporating renewable energy sources as appropriate, the report said.