But it isn’t Big Tech companies in Silicon Valley or the Wall Street financial company “fat cats” or big banks or Walmart. They pay billions in taxes.

The culprits here are the very companies Biden is in bed with: green energy firms.

It turns out that despite all the promises over the past decade about how renewable energy is the future of power production in America, by far the biggest tax dodgers in the country are the wind and solar power industries. Over the past several decades, the green energy lobby – what I call the climate-change-industrial complex – isn’t paying its fair share. That’s because the vast majority of these companies pay nearly ZERO income taxes.

But they wade in rivers of federal direct and indirect subsidies that keep these zombie companies alive. Over the past two decades, the renewable energy lobby has collected more than one-quarter trillion dollars in subsidies – payments that we’ve been assured over and over would be temporary. The argument for these grants, loans, tax abatements and other sweetheart kisses is that these were “infant industries” in need of a Head Start program for CEOs. Except these companies have never even reached puberty after all these years.

What’s worse is that Biden keeps spoiling the children with lavish gifts for bad performance. A new report by tax expert Adam Michel at the Cato Institute finds the green energy subsidies – mostly created by Biden policies like the so-called Inflation Reduction Act – will drain the Treasury of as much as $1.8 trillion over 10 years.

The Cato report finds that since its passage, “the estimated cost of the IRA’s new and expanded energy tax credits increased dramatically.”

These tax shelters are just a form of Aid to Dependent Corporations. They never seem to want to cut the umbilical cord.

What have we gotten for this mountain of taxpayer-funded green energy largesse? Nothing, really. Today, we still get 80% of our energy in America from fossil fuels and nuclear power. Wind and solar are stuck at less than 10%. This is some investment we’re making.

Meanwhile, Biden keeps railing against companies that pay no income tax. He’s advocated a mandatory 15% minimum corporate tax. But guess what industry is explicitly exempt from the minimum? The green energy lobby.

It’s just a reminder that a lot of people are getting really, really rich off climate-change hysteria.

The “green” in green energy doesn’t stand for a cleaner environment. It stands for the color of money. Yours and mine.

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The country is aiming to have its energy supply and demand reach “net-zero” emissions by 2050, relying on sources like wind, solar and hydrogen fuels after former Prime Minister Angela Merkel decided in 2011 to eventually shutter the country’s nuclear power plant fleet. Despite the German government’s regulatory and spending blitz to usher in the green transition, the country is not on track to meet its climate goals, but its decision to rely on intermittent green energy generation has contributed to an ongoing energy crisis that is crippling its economy.

“Hollowing out the economy is not benefiting the German people, nor is it helping climate change,” Diana Furtchtgott-Roth, Director of the Center for Energy, Climate and Environment at the Heritage Foundation, told the Daily Caller News Foundation. “It is not reducing emissions, because manufacturing is being shifted to other nations, like China and India, that use dirtier energy. The German economy is going down, and their people do not have the jobs and economic opportunities that they used to.”

Germany Rules Out Keeping Nuclear Power On Despite Energy Crisis https://t.co/dYUfJrJhQK

— Daily Caller (@DailyCaller) September 8, 2022

Germany ultimately closed the last of its nuclear power plants in April 2023. Several months later, the German government announced that it would activate coal-fired power plants to ensure adequate supply through this winter.

The signs of Germany’s economic withering are numerous, perhaps most visible in the fact that it shrank in 2023 after growing by less than 2% in 2022, according to Euronews. The country is facing the high borrowing costs and inflationary pressures that are dogging many of the West’s economies, but sticky energy inflation remains the key factor in the country’s economic malaise, both for consumers and corporations, according to Reuters.

In the third quarter of 2023, the German electricity sector generated 20% less power than it did in the same period in 2022, according to the GMK Center. On the demand side, Germany’s 2023 energy consumption was about 8% lower than 2022’s levels, and about 25% lower than energy consumption in 1990, according to Clean Energy Wire.

The country’s consumer price index for electricity is nearly 50% higher in December 2023 than it was in January 2021, according to data from Eurostat. Executives of industrial companies are warning that high energy costs are making their continued presence in Germany potentially untenable, while many firms are beginning to move their operations out of Germany, according to Politico.

Germany’s November 2023 manufacturing Purchasing Managers’ Index (PMI), which is “a gauge of overall business conditions based on measures of new orders, output, employment, supplier delivery times and stocks of purchases,” indicate that executives across the entire sector are decidedly pessimistic about their future prospects and the vitality of the sector, according to S&P Global. It is difficult to understate the potential ramifications of the decline of German manufacturing given that the country earned its reputation as Europe’s economic powerhouse primarily on the strength of its manufacturing sector, which has typically provided about 20% of the country’s annual gross domestic product since 1991, according to World Bank data analyzed by Macrotrends.

Germany’s manufacturers are not the only ones feeling the pinch. German farmers recently engaged in a weeklong wave of protest across the country, voicing their anger about the government’s proposal to plug a massive budget gap by eliminating subsidies that allow them to stay in business.

The budget gap especially threatens climate-related initiatives, many of which still require government subsidies to have a chance at succeeding even after the government has already spent hundreds of billions of euros on the green agenda, according to The New York Times.

Meanwhile, the country’s residential real estate prices have fallen precipitously over the past year or so, according to Reuters. The third quarter of 2023 saw residential real estate prices dropped by 10% year over year, a development which Reuters describes as a “grim sign” for the German economy.

While Germany’s energy crisis was many years in the making, Russia’s ongoing war with Ukraine kicked it into overdrive. Before the war started, Germany had become reliant on cheap Russian natural gas, even amid warnings — including one from former U.S. President Donald Trump — that depending on Russian exports would afford Russian President Vladimir Putin significant geopolitical leverage over Europe.

The conflict is still raging, and it remains unclear when it will end or what the terms of concluding the war will look like. One such sticking point is whether or not Russia and Ukraine will be able to renegotiate a natural gas transit deal to replace the current agreement, which expires in 2024, according to Bloomberg News.

The current Russia-Ukraine transit agreement allows for Russian gas to flow through Ukraine and into other European countries in exchange for Russian fee payments to Ukraine, according to Bloomberg. Without a new deal in place, Germany and Western Europe may be at risk of enduring another supply pinch, prompting German Economy and Energy Minister Robert Habeck to warn in June that “there is no secure scenario for how things will turn out” for the German economy if it is unprepared for another round of supply disruption.

The meager economic outlook and energy crisis is also shaking up German politics. The Alternative for Germany (AfD), the country’s leading right-wing populist party, has seen its popularity more than double since the Russian invasion commenced, according to polling data aggregated by Politico. About 80% of the German population is unsatisfied with the performance of the current coalition, and more than half of the country wants elections to occur before 2025, their currently scheduled date, according to Bloomberg News.

The German Federal Ministry for Economic Affairs and Climate Action did not respond immediately to a request for comment.

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Under the IRA, the lion’s share of subsidies will be paid to wind and solar developers.  The subsidies will not expire until electric industry carbon emissions fall by at least 75% below 2005 levels, after which they will gradually decrease.  Even the most optimistic forecasts prepared by the U.S. Energy Information Administration (EIA) show that this will not occur until at least 2046.  Thus, the subsidies for wind and solar will continue unabated for decades.  In total, the subsidies will far exceed what the U.S. government spent in today’s dollars to combat the Great Depression.

The single largest subsidy is the federal investment tax credit (ITC).  Most wind and solar projects will be able to claim a minimum 30% ITC, plus be eligible for an additional 10% credit if the projects rely on domestic manufacturing for components.

The EIA’s optimistic forecast projects about 900,000 megawatts (MW) of solar photovoltaics, 350,000 MW of onshore wind turbines, and 24,000 MW of offshore wind by 2046.  If all of this generation is built, it will result in direct ITC subsidies totaling between $500 billion and $1 trillion, depending on construction costs.  The greater the costs, the larger the subsidies.  Although wind and solar proponents still claim costs are falling, the reality is the opposite.   Offshore wind developers, especially, are clamoring to renegotiate contracts they signed previously, including guaranteed price adjustments for increasing costs, and relaxing the domestic content requirement so they can claim the additional 10% ITC.

Despite spiraling deficits – almost $2 trillion in the fiscal year that ended this past October – green energy subsidies will be financed with still more government debt.  With the increase in interest rates to normal levels, financing costs will soar, adding an estimated $500 to $800 billion to the bill costs, almost as much as the subsidies themselves.

The envisioned spending and subsidies for green energy, several hundred billion dollars annually just for wind and solar generation, will distort energy markets.  First, they will crowd out more productive private investment in the energy sector and reduce the resources available for more efficient forms of generation, especially small modular reactors.  Second, as the deficit increases further, higher interest rates will crowd out private investment in more productive private sectors of the economy.

Along with the Administration’s push to “electrify” the economy, such as higher vehicle mileage standards that act as a de facto mandate for electric vehicles and proposed bans on natural gas appliances, the result, as has been experienced in Europe, will be soaring electricity prices.  Those higher prices will reduce economic growth and employment, far more so than the green energy investments can boost it.  Although the subsidies will benefit wind and solar developers, but the overall economic impacts for the country will be crippling.

One gauge of the adverse economic impacts of green subsidies is the cost to taxpayers to create the promised thousands of green energy jobs, especially for offshore wind.  Using offshore wind developers’ claimed employment impacts, the average subsidy for each green job created will be over $2 million per year.  Forcing taxpayers to pay millions of dollars each year for each job created, while claiming that doing so will bolster the U.S. economy, is Alice in Wonderland economics.

Politicians who promote green energy and their own short-term self-interests may prefer to ignore basic economic realities, but those economic realities will have their revenge.  Eventually, the profligate spending on low-value green energy will collapse under its economic weight, having inflicted much socioeconomic damage.

Sadly, this is not an experiment that the U.S. needs to undertake; European experience and basic economics tell us all we need to know.  But as the lyrics from the old song begin, “fools rush in …”

About the Author

Jonathan Lesser is the president of Continental Economics, a senior fellow with the Discovery Institute, and an adjunct fellow with the Manhattan Institute.  His report, “Green Energy and Economic Fabulism,” was recently published by the Global Warming Policy Foundation.

Offshore wind companies are cancelling projects and executives are sounding the alarm on the state of the industry, while solar companies and indexes have seen their value continue a months-long slide that has resulted in diminished earnings forecasts and a solar-oriented loan provider’s bankruptcy. These developments suggest that Biden’s sweeping green energy plans could be in trouble, especially given the intractable nature of some of the crucial economic problems plaguing the industries.

“Boosters for this energy transition bet the farm on three rent-seeking industries: wind, solar and electric vehicles. Two legs of that three-legged stool are now showing signs of financial distress despite massive subsidies they’ve already received from multiple levels of government,” David Blackmon, a 40-year veteran of the oil and gas industry who now writes and consults extensively on energy, told the Daily Caller News Foundation. “American consumers, who are paying the price for this in the form of skyrocketing costs of all forms of energy, should demand their representatives hang up the phone when the calls come in from wind and automaker executives asking for even more.”

.@larry_kudlow: "The Green New Deal is destroying jobs." pic.twitter.com/5GzLTdVvKH

— Daily Caller (@DailyCaller) September 26, 2023

Orsted, a Danish offshore wind company, announced on Tuesday that it cancelled two major developments off the coast of New Jersey. Company executives blamed factors like inflation, interest rates and supply chain woes, saying that the problems had left the firm little choice but to walk away from the major projects.

Since the cancellations, the company’s stock price has fallen even further and S&P has indicated that it is considering downgrading the company’s credit rating. But Orsted is not the only offshore wind company showing signs that the industry may be in an extremely precarious position.

The U.S. offshore wind industry appears to be “fundamentally broken” due to problems with permitting and rising costs, Anja-Isabel Dotzenrath, the head of gas and low carbon energy for British Petroleum (BP), said at a conference on Wednesday, according to Bloomberg News. “There’s a fundamental reset needed,” she said, suggesting that there could be solutions and that her company is working with its partner to assess “options for their U.S. offshore wind projects to mitigate the effect of inflationary pressures and permitting delays.”

Under Biden’s leadership, the federal government has heavily subsidized the offshore wind developments, primarily via the Inflation Reduction Act (IRA), in a bid to have the industry provide enough power to source electricity for 10 million American homes by 2030. The state of the industry is so dire that numerous energy market experts told the DCNF that a government bailout for the industry may be just around the corner.

Fox News’ Peter Doocy presses @PressSec about where laid off energy workers would go to get “green” jobs:

President Biden “laid out a plan that will not only create millions of good union jobs but also help tackle the climate crisis.”
pic.twitter.com/MNJauWzYoB

— Daily Caller (@DailyCaller) February 8, 2021

The offshore wind goal is just one slice of the administration’s efforts to decarbonize the American energy sector by 2035 and then have the entire U.S. economy reach net-zero carbon dioxide emissions by 2050.

Like offshore wind, the administration is counting on solar power to emerge in the coming years as a replacement for the energy generated by fossil fuel infrastructure. Solar power is also similar to wind power in that it is intermittent and currently more expensive than power sourced by natural gas and other fossil fuels, according to Peter Grossman, an emeritus professor of economics for Butler University.

Solar companies have generally had a rough 2023 so far, and this past week has been no different: while stocks are down for several leading solar producers, Sunlight Financing, a company which provided loans to consumers to buy residential solar systems, filed for Chapter 11 bankruptcy on Monday. Several leading home system installers pared back their outlooks for the year this week as well, as higher interest rates and inflation have cooled consumer demand, according to Bloomberg News.

“The green industry makes products that are both very expensive and mostly ineffective,” Larry Behrens, the communications director for Power The Future, told the DCNF. “Yet, instead of admitting reality, we have an administration in Washington that is doubling-down and working overtime to force these terrible products into our lives,” he continued, adding that “thanks to the laughably-named Inflation Reduction Act, Joe Biden has a $369 billion dollar green slush fund and he’s put a political operative in charge of it… Joe Biden knows that when the green agenda fails, his legacy will sink even further, so there will be no dollar amount too high to keep green boondoggles afloat for as long as possible.”

The White House, Orsted, BP and Sunlight Financing all did not respond immediately to requests for comment.

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Diesel power plants are therefore very, very bad. Hydroelectric and geothermal projects are good. But those green advances are being blocked, and diesel generators are being kept in operation, in one location because of a ban on roads.

It is the Pacific Legal Foundation that explains a lawsuit has been filed by the Inside Passage Electric Cooperative against Joe Biden’s Agriculture Department because it won’t allow roads, any roads, in the Tongass National Forest.

“The cooperative provides power — at cost — to several small, predominantly indigenous communities located within the Tongass. IPEC seeks to build several hydroelectric and geothermal projects to replace the expensive diesel generation that these communities currently rely on. But the USDA’s prohibition on roads — including gravel and dirt roads — in the Tongass makes the construction and maintenance of these projects infeasible because they would be accessible only by helicopter,” the foundation reported.

Luke Wake, a lawyer for the organization, said, “Congress has mandated that regulation must account for both preservation and reasonable economic use. When executive agencies wrest legislative power from Congress, they tend to pursue whatever goal they have to the exclusion of all other priorities — as is happening here.”

The organization noted that only Congress can make laws, and lawmakers never gave the USDA authority to impose a blanket ban on road work across tens of millions of acres of forests.

“In the name of conservation, the USDA’s rules are keeping remote Alaska communities dependent on diesel for power generation when green alternatives are available,” charged IPEC’s Jodi Mitchell. “Diesel is one of the most expensive sources of power generation. As a result, these communities pay some of the highest electricity rates in the state and among the highest in the country.”

The complaint notes that the USDA’s rule prevents roads on 58.5 million acres of national forest lands, about 2% of the nation.

“The department has made no allowance for road access necessary for economically important and socially beneficial energy infrastructure projects,” the IPEC charges. “While the roadless rule allows for a few very limited exceptions, there is no exception for roads needed to develop hydroelectric or geothermal projects, or for any other project that requires road access – regardless of how carefully planned the project may be to avoid environmental concerns.

Actually, the complaint explains that the Organic Administration Act of 1871 lists that national forests be open to the public for “all lawful purposes,” and even the Wilderness Act of 1964 bans roads in wilderness areas, but not in other areas.

“Despite Congress’ manifest desire to allow roads in national forests as needed for reasonable public access and use, the department claims to have found authority to categorically ban roads in nebulous statutory language,” the complaint charges.

It is under that authority that the department imposed its roadless rule to “harm local communities.”

That comes through prevention of the utility’s plan to “pursue geothermal projects … to provide clean energy that would reduce utility costs and would generally benefit the 900+ residents of Hoonah.”

Even accessing “existing facilities, powerlines, and diversion pipes” is problematic under the USDA, the complaint said. Much servicing now is done by helicopter.

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A number of green energy companies and advocacy groups have petitioned the New York Public Service Commission (NYPSC) to renegotiate contracts with state utilities as rising costs could threaten the viability of numerous projects, according to UtilityDive.

A number of green energy companies and advocacy groups have petitioned the New York Public Service Commission (NYPSC) to renegotiate contracts with state utilities as rising costs could threaten the viability of numerous projects, according to UtilityDive.

The NYPSC, the state’s utility regulator, is reviewing requests to adjust deal terms for more than 90 offshore wind, solar and onshore wind projects that would sell power to New York and are projected to supply 25% of the state’s load by 2030, UtilityDive reported. Numerous companies and advocacy groups supporting the developments are seeking to increase the prices of their previously-inked deals to combat rising supply costs and interest rates, with some saying that the costs may threaten the financial viability of their projects if they are not allowed to increase their prices to generate more revenue.

Orsted, British Petroleum (BP), Equinor, the Alliance for Clean Energy New York (ACENY) and Clean Path New York (CPNY) all filed petitions with the NYPSC requesting permission to renegotiate their contracts on account of these unexpected costs, UtilityDive reported. The spiking costs could threaten the viability of numerous green energy projects that the state is set to depend on for electricity production in the coming years.

On average, offshore wind developers are seeking to boost their contract prices by 48%, onshore wind companies are hoping to raise their prices by an average of 71% and solar companies are hoping to increase their prices by 63%, according to the New York State Energy Research and Development Authority (NYSERDA).

The requests to increase prices in established offshore wind and other green energy contracts in New York could bump up residential electricity rates by 2.5% and 1.5%, respectively, or a cumulative $4.67 per month, according to NYSERDA. A coalition of New York utility providers has also suggested that the NYPSC make minor changes to contract terms on a project-by-project basis, or that the utility regulator use inflation-sensitive formulas to make adjustments to the deals.

“Like other developers at the forefront of this emerging US industry, Equinor and BP have seen the estimated costs of our projects rise sharply due to inflation, supply chain disruptions, permitting and interconnection delays, rising interest rates and other outside factors,” an Equinor spokesperson told the Daily Caller News Foundation. “While we have worked to manage these issues, given the unique moment in our global economy, this is an industry-wide issue that cannot be overcome at the project level.”

The problems facing green energy companies in New York may spell trouble for the Biden administration’s climate agenda, which is similar to that of New York. The state’s goals of decarbonizing its electricity production by 2040 and reducing greenhouse gas emissions by 85% relative to 1995 levels by 2050 are slightly less ambitious than the Biden administration’s aim to have the U.S. energy sector reach net-zero carbon dioxide emissions by 2035 and the overall U.S. economy reach net-zero by 2050.

“New York has outlined ambitious targets for clean energy generation and transmission, and the projects that have sought these modifications to their contracts are crucial parts of those targets. If these projects are not able to move forward, yes, it would endanger the goals New York has established,” Anne Reynolds, executive director of ACENY, told the Daily Caller News Foundation.

“The cost to ratepayers is an immense concern,” Reynolds continued, adding that “the need to combat the ongoing climate crisis necessitated the aggressive timeline that New York has established, but the burden of paying for this should not fall entirely on the ratepayers” and that ACENY is “working with [its] legislative partners and like-minded organizations to prevent this from happening.”

Green energy companies have requested that utility regulators across the U.S. relieve them of some inflationary burdens on their projects, including developers in California, Connecticut, Hawaii, Indiana, Maine, Maryland, Massachusetts, Michigan, New Jersey, New Mexico and Rhode Island, according to NYSERDA.

“Our decision to petition for renegotiation is driven by unrelenting economic challenges and we do not take this step lightly.  “Equinor and BP’s offshore wind projects are on track to power 2 million New York homes with renewable offshore wind power,” a BP spokesperson told the DCNF. “We remain strongly committed to our projects and our partners in New York and are optimistic that together we can find a path forward in the weeks and months ahead.”

Orsted, CPNY, Democratic New York Gov. Kathy Hochul’s office, NYPSC and the White House all did not respond immediately to the DCNF’s request for comment.

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To put that in perspective, if you earned $1 a second 24/7/365—about $31 million per year—it would take you 158,550 YEARS to make $5 trillion. $5 trillion is an almost unfathomable amount of money.

However, even with that astronomical financial support, the world still depends on hydrocarbons for 84% of its energy needs—down only 2% since governments started binge spending on renewables 20 years ago.

That’s all according to Mark Mills in a report from the Manhattan Institute, who concludes that:

“The lessons of the recent decade make it clear that solar, wind, and battery technologies cannot be surged in times of need, are neither inherently ‘clean’ nor even independent of hydrocarbons, and are not cheap.”

With all that in mind, it should be clear that so-called renewables—more accurately, unreliables—have been a giant flop. They are not viable for baseload power—even with $5 trillion in subsidies and two decades of trying. Today, using wind and solar for mass power generation is an artificial political solution that would not have been chosen on a genuinely free market for energy.

Wind and solar power might be useful in specific situations. Still, it’s ridiculous to think they can provide reliable baseload power for an advanced industrial economy. It’s like trying to force a square peg into a round hole.

Nonetheless, governments, the media, academia, and celebrities flippantly push for an imminent energy “transition” as if it’s preordained.

It’s shocking and depressing so many adults think they can magically change the underlying economics, chemistry, engineering constraints, and physics of energy production to suit their childish fantasies and political agendas.

Unreliables—i.e., renewables—will not replace hydrocarbons anytime soon and will certainly not bring about energy security… despite what many “serious” people believe. When it comes to reliable baseload power, most of humanity has only three choices:

1. hydrocarbons—coal, oil, and gas
2. nuclear power
3. abandon modern civilization for a pre-industrial standard of living.

Aside from friendly aliens delivering a magical new energy technology, most places have no other alternatives.

So, with Western governments intent on going green, sanctioning large energy exporters (Russia, Iran, Venezuela), and shunning hydrocarbons in general (ESG, windfall profits taxes, limiting exploration, burdensome regulations), it boils down to a simple choice.

They can either embrace nuclear energy—which has zero carbon emissions—or give up reliable electricity. I suspect it won’t be long before Western governments turn to nuclear energy in a big way for two reasons.

1. Rising hydrocarbon prices.
2. Concerns about energy security.

Rising Hydrocarbon Prices

First, a necessary clarification.  Sloppy, vague words lead to sloppy, vague thinking. The term “fossil fuels” is an excellent example of this.

When the average person hears “fossil fuels,” they think of a dirty technology that belongs in the 1800s. Many believe they are burning dead dinosaurs to power their cars. They also think fossil fuels will run out soon and destroy the planet within a decade.

None of these absurd things are true, but many people believe them. Using misleading and vague language plays a large role.

I suggest expunging “fossil fuels” from your vocabulary in favor of hydrocarbons—a much better and more precise word.

A hydrocarbon is a molecule made up of carbon and hydrogen atoms. These molecules are the building blocks of many different substances, including energy sources like coal, oil, and gas. These energy sources have been the backbone of the global economy for decades, providing power for industries, transportation, and homes.

Modern civilization has only two choices for baseload power—hydrocarbons or nuclear. I believe hydrocarbon prices will rise substantially in the months ahead, making nuclear—the only practical alternative—even more attractive than it already is.

There are four powerful trends that I think will push hydrocarbon prices higher.

1. Trend—The End of the Petrodollar System: The US government will soon lose its ability to print money to buy energy—an incredible privilege no other country has. That will have significant consequences for oil prices.
2. Trend—Rampant Currency Debasement: Governments worldwide have no choice but to engage in ever-increasing currency debasement. 2023 could be the year it reaches a crescendo.
3. Trend—Carbon Hysteria and Under-Investment: Governments have redirected trillions in capital away from nuclear and hydrocarbons and sent it to wind and solar. Further, ESG madness, “net zero” goals, and other unfavorable government policies have led to a massive under-investment in hydrocarbons. I expect the carbon hysteria will cause tighter supplies and higher prices.
4. Trend—Geopolitical Turmoil: The conflict between Russia (the 2nd largest oil exporter) and Ukraine has no end in sight. Tensions with Iran could explode at any moment. As a result, geopolitical turmoil could easily escalate, causing hydrocarbon supply disruptions out of Russia and the Middle East.

These are four powerful trends pushing for shortages and significantly higher hydrocarbon prices.

When hydrocarbons become expensive, the world looks to alternatives. And there is only one: nuclear.

Energy Security

Having secure access to energy, which is essential for any economy and any country’s stability, is paramount. That’s why energy security is national security.

Without energy security, any country is in a vulnerable position. No sovereign nation can tolerate being at the mercy of someone else for something as crucial as energy.

Unsurprisingly, many governments inevitably turn to nuclear to help ensure their access to reliable energy. That’s because a small amount of uranium can produce tremendous energy in a nuclear power plant.

According to the Nuclear Energy Institute, a one-inch tall uranium pellet can produce as much electricity as one ton of coal, 149 gallons of oil, and 17,000 cubic feet of natural gas.

It’s impractical for countries without domestic hydrocarbon supplies to stockpile several years’ worth of coal, oil, or gas. On the hand, it is practical for countries to stockpile five years’ worth of uranium for nuclear power plants.

Take Japan, for example. Japan is the world’s third-largest economy. Before the Fukushima disaster, nuclear power plants produced around 30% of Japanese electricity. After Fukushima, Japan shut down all of its nuclear reactors.

Japan shuttered its nuclear power plants despite a government policy that requires it to stockpile at least five years’ worth of energy supplies. This policy dates back to the early 1970s when a large regional war in the Middle East disrupted energy supplies and rocked Japan, which lacks its own energy resources.

Uranium is the only feasible way for Japan to meet the terms of this policy. It’s impractical for Tokyo to stockpile five years’ worth of coal, oil, or gas.

Japan has made an emergency exception to this policy because of Fukushima. But without energy security, it’s in a vulnerable position concerning its historical rival China. That is especially true if geopolitical turmoil in the Middle East or Eastern Europe disrupts oil and gas supplies.

It would be ironic to see Japan suffer from another oil shock during the period in which it suspended the very policy to protect it from one. That should incentivize Japan not to delay restarting its nuclear reactors.

In fact, Japan has recently made a dramatic pivot towards nuclear power because it has finally realized there is no alternative for it to meet its energy security needs.

Tokyo has started reactivating its nuclear reactors and implementing pro-nuclear policies.

While Japanese restarts are an important factor determining the market balance, it is not the only one. Even if the Japanese demand for uranium never returns, the 150 new reactors in China could create enormous new demand that will more than offset it over the longer term.

Here’s the bottom line with uranium.

I wouldn’t be surprised to see hydrocarbon prices spike amid a geopolitical crisis, which would be a catalyst for much higher uranium prices.

Regardless, hydrocarbon prices are set to soar for the other reasons I mentioned above. As a result, I expect Western countries will soon become desperate for energy security.

They’ll eventually realize—as Japan did—that nuclear power is the only solution. And when they do, it will turbocharge the uranium bull market that is already underway.

With multiple crises unfolding right now, the next big move could happen imminently. That’s why I just released an urgent PDF report, it’s called: The Most Dangerous Economic Crisis in 100 Years… the Top 3 Strategies You Need Right Now. It details how it could all unfold soon… and what you can do about it. Click here to download the PDF now.

Article cross-posted from International Man.

The Cold War era was rife with projects and organizations to carry out this vision, from Bretton Woods and the International Monetary Fund (IMF) in the area of international finance to the North Atlantic Treaty Organization (NATO) in military affairs to the CIA-funded Congress for Cultural Freedom used to spread progressive, US-friendly propaganda. These organizations all had mainly deleterious influences—I have previously indicated how Bretton Woods and the modern international financial system can best be described as financial imperialism—but in one area American interventionism is to this day universally acclaimed as benign: the Green Revolution.

The Official History of the Green Revolution

Population growth was considered a major problem in the sixties. Paul Ehrlich of Stanford University in his 1968 Population Bomb predicted widespread hunger as soon as the 1970s and advocated immediate action to limit population growth. The world simply could not feed a larger human population. Although mainly focused on environmental damage from pesticide use, Rachel Carson’s famous 1962 book, Silent Spring, made similar points. Human population was bound to continue to grow, and this would result in untold suffering and environmental damage.

A key and imminent danger in the 1960s was India: always on the verge on starvation, only massive imports of American wheat kept the specter of mass death away. Then, in 1965, catastrophe struck: drought across most of the subcontinent caused the Indian harvest to fail. As the drought continued into the two following years, it appeared that Ehrlich’s and the other Neo-Malthusians’ predictions had come true.

Then, a miracle happened: in stepped a man, a veritable demigod, to judge by the worship lavished on him by contemporary normies. Norman E. Borlaug, the father of the Green Revolution, had since the forties been researching and breeding new wheat varieties in Mexico, initially funded by the Rockefeller Foundation and after 1964 as leader of the International Maize and Wheat Improvement Center (Centro Internacional de Mejoramiento de Maíz y Trigo, CIMMYT, initially funded by the Rockefeller and Ford Foundations and the Mexican government).

Borlaug bred high-yielding dwarf wheat varieties that were widely adapted to different ecological environments. Since the early sixties, he had been working with M.S. Swaminathan of the Indian Agricultural Research Institute, and together they planted Borlaug’s new dwarf wheat varieties in northern India. Success was immediate: 1968 returned a bumper crop, as the new wheat yields were the highest ever recorded in India.

It appeared that the population doomers had been wrong. So said Borlaug himself when he in 1970 received the Nobel Peace Prize: in his acceptance speech, he proclaimed victory in the perpetual war between “two opposing forces, the scientific power of food production and the biologic power of human reproduction.” But the war was not over, he warned, and only continuous funding for technological research into food production and limits on reproduction could avert disaster.

Governments and philanthropists rose to the challenge, and capital poured into agricultural research of the Borlaugian variety as new international institutes were set up to continue the work Borlaug had begun in Mexico and in collaboration with the International Rice Research Institute in the Philippines (founded in 1960). The Green Revolution eradicated the scourge of famine, and since agriculture with Borlaugian technology had much higher yields, masses of land were liberated from agricultural use and returned to nature. A 2021 study in the Journal of Political Economy estimates that gross domestic product (GDP) per capita in the developing world would have been up to 50 percent lower had it not been for Borlaug, Swaminathan and the other international Brahmins ready and willing to guide the unwashed masses of ignorant peasants.

There is a twofold problem with this account of agricultural history: it is based on bad economics, and its connection to the actual history of Indian agriculture is tangential at best.

The Green Revolutionaries’ Bad Economics

Celebrating the Green Revolution rests on two fundamental errors in economic reasoning: Malthusianism and misunderstanding agricultural economics.

Malthusianism is the mistaken belief that human population will grow faster than the food supply; in Thomas Malthus’s formulation, population growth follows a geometric progression (2, 4, 8, 16 …) and food supply an arithmetic progression (2, 3, 4, 5 …). As a result, mankind is destined, apart from brief periods, to live at the margin of subsistence: only disease, war, and famine will limit population growth.

The problem with Malthusianism is that it’s completely wrong, both as a matter of theory and of historical record. For one, food production and population growth are clearly not independent variables, since human labor is a key input in food production, a point made by Joseph A. Schumpeter. More fundamentally, as Ludwig von Mises explained, the Malthusian law of population is only a biological law—it is true for all animal species, but men are not simply animals. With the use of reason, they can refrain from mindless procreative activity, and they will do so if they themselves must support the result of said activity. Malthus himself clearly saw this and amended his theory in the second and later editions of his famous Essay on the Principle of Population (Frédéric Bastiat, as is his wont, has a much better and more optimistic explanation of the population principle).

Neither do the technophiliacs understand the economics of agriculture and food production. Ester Boserup, who is a key inspiration for the following brief explanation, developed the correct understanding of this issue in the 1960s, after studying Indian farming. The ignorance of Borlaug and company and their cheerleaders today and in the past is thus hardly excusable: the exact same historical conditions that they saw as “Malthusian,” after all, inspired Boserup to lay out the correct understanding of the matter.

As population grows, the labor supply expands, and more labor is applied to agricultural plots. The land’s yield therefore increases, although the returns on additional labor input diminish—as per the law of returns. Once the return on additional labor input is insufficient to justify it, new land is instead brought into cultivation, and once the land has been cleared, the physical productivity of labor increases. Since clearing new land requires some additional effort, farmers always have to weigh the potential returns from new lands versus the returns from more intensive cultivation of already cleared lands.

We can see this clearly in monetary terms: as more labor is applied to working the land, wages fall and land rents rise. As land rents and land values rise, the potential value of unsettled lands increases, and as wages fall, the expenditure needed to clear the land falls. Once the expected return on new lands outweighs the estimated cost of bringing it into cultivation, labor will be applied to clearing new lands. Then land rents will fall and wages rise until bringing more land into agricultural use is no longer deemed profitable.

Thus, population and food production expand in unison, sometimes due to more intensive cultivation, sometimes due to an increase in the area cultivated. The same analysis holds under more capitalistic conditions (i.e., when farmers have more tools and other capital inputs available): the return on applying more capital goods to present land is compared to potential returns from applying capital goods to expanding the cultivated land area. Even the most primitive form of agriculture is, of course, capitalistic, as agriculture is a roundabout production process, in which productive effort is widely separated in time from valuable output.

Indian agriculture in the 1960s functioned well, except when it was impeded by government meddling and institutional barriers. Such meddling can be extremely destructive, as Mao Zedong had shown in China just a few years previously during the Great Leap Forward. However, there was nothing Malthusian about that episode nor, as we shall see, about the alleged famine in India in the 1960s.

The 1960s Indian Famine: Bad History

The 1960s famine in India launched the Green Revolution and the international fame of its main protagonist, Norman Borlaug. From the outset, however, the narrative was skewed by political considerations.

American agriculture was heavily subsidized in the sixties, resulting in huge surplus production. This surplus could not be sold at the market price, at least not without bankrupting American farmers. Under typical interventionist logic, the American government intervened to subsidize the export of American farm products to maintain an artificially high price in the domestic market.

India was thereby inundated by cheap American wheat in the early sixties, but as G.D. Stone writes, this did not alleviate India’s food shortages—it caused them. In a simple case of farmers adjusting to their comparative advantage, Indians shifted their production to cash crops (such as sugarcane and jute) for export and thereby financed their imports of cheap American grain.

The drought of 1965 and the following years was real enough, but its impact was not simply a failure of food crops. The jute and sugarcane crops suffered, leading to real hardship for agricultural laborers. But this hardship never amounted to widespread famine. This did not matter for the narrative, however: in 1965, the American president, Lyndon B. Johnson, was trying to get Congress to approve a new farm bill with increased subsidies for agricultural exports and foreign aid in the shape of the Food for Peace plan. Reports of Indian drought were a godsend: faced with a recalcitrant Congress, Johnson played up the specter of drought and mass starvation. His legislation duly passed, and even more American grain was shipped to India, which doubtlessly did help alleviate some hardship in the short term.

Playing up the dire situation in India naturally also fed the agenda of Borlaug and company. The special wheat varieties bred in Mexico were widely introduced across northern India, and as the drought conveniently ended, the first harvest yielded a massive crop. Borlaug took credit, quite undisturbed by the coincidence that nearly all crop yields were at record levels in India and in neighboring China. The alleged success of American technocracy also played into the wider political narrative of American progressive leadership of the “free world”: in 1968, the administrator of the United States Agency for International Development (USAID), William Gaud, addressed the Society for International Development in Washington, DC, claiming that foreign aid and wise agricultural policies had fostered “a new revolution. Not a violent Red Revolution like that of the Soviets, nor is it a White Revolution like that of the Shah of Iran. I call it the Green Revolution.”

The Green Revolution, led by government and NGO technocrats and financed mainly by Western development agencies, was off to the races. The breeding of hybrid rice and wheat varieties by the International Rice Research Institute and CIMMYT, respectively, was the flagship of modernity in farming. But even on its own terms, this is misleading at best. What happened was that agriculture in the developed world as well as in the West shifted to a very intensive cultivation that required a lot of capital inputs. Borlaug’s wheat varieties are a case in point, as Stone points out: only when large amounts of fertilizer were applied did these varieties outyield native Indian tall wheats. Technologies, it turns out, are not exogenous forces that are simply imposed and reshape the environment. The local people had developed crops and techniques suited to their situation, and it’s unlikely that Borlaug’s wheat would have been widely used had the Indian government (and foreign aid agencies) not at the same time massively subsidized the use of fertilizer and the construction of new irrigation systems.

The Reality of the Green Revolution

A last line of defense for the proponents of the Green Revolution’s benefits is that it has resulted in efficient food production, liberated labor for nonagricultural work, and that we can now go on to use modern genetic technologies to increase the quality of food and avoid malnutrition. Thus, for example, otherwise sensible people like Bjørn Lomborg have long championed the introduction of “golden rice”—a rice variety genetically engineered to be high in vitamin A—as a solution to malnutrition in rice-growing countries.

But the technocrats and their cheerleaders forget to mention or ignore the fact that the Green Revolution has itself been a cause of malnutrition. As wheat yields increased in India according to Stone, for instance, the relative price of wheat declined, and wheat thereby outcompeted alternative food sources rich in protein and micronutrients. Malnutrition rates in India thereby rose as a direct result of the Green Revolution. A similar development occurred in developed countries, for different but analogous reasons.

When it comes to technology freeing up labor, what has really happened is that overinvestment of capital in agriculture has reduced the demand for agricultural labor, but this has not increased the demand for labor elsewhere. On the contrary, since less capital is available for investment in nonagricultural sectors, the demand for labor and wages elsewhere has not risen. Thus, the Green Revolution has been an important contributing factor in the growth of third-world slums where people subsist on low-paying jobs and government handouts.

All in all, as we should expect when dealing with technocrats driven by progressive hubris to intervene in the economy’s natural development, the Green Revolution was not a blessing, the victory of wise scientists over the propensity of stupid peasants to breed uncontrollably. Rather, it has been an ecological, nutritional, and social disaster.

About the Author

Kristoffer Mousten Hansen is a research assistant at the Institute for Economic Policy at Leipzig University. He received his PhD from the University of Angers and is a former Mises Institute research fellow. 

Article cross-posted from Mises.

Published in Geographic Journal, the study reveals that upwards of 80 percent of the global supply of sulfur comes from the desulfurization of fossil fuels, which the climate brigade has pronounced as evil because they are supposedly heavy polluters.

The push to “decarbonize” the planet in order to cool it and prevent global warming and climate change is making sulfur much harder to come by. By 2040, the “greenification” of the planet will create a “shortfall” in the annual supply of sulfur ranging between 100 and 320 million tons.

Meanwhile, demand for sulfur appears to be increasing by the day, not only in agriculture but also within the electric vehicle (EV) industry, which requires sulfur to continue producing batteries, as well as in battery-powered electronics like computers and mobile phones. (Related: The United Nations is warning that global grain production could drop by 40 percent due to lack of fertilizer.)

“With increased farming and the world moving away from fossil fuels, geographers estimate global demand for sulfuric acid will rise to 246 to 400 million tons by 2040,” the paper reads. “However, depending on how quickly decarbonization happens, there may only be 100 to 320 million tons available for use.”

Embracing a green energy future means starving much of the world

If fossil fuels go away like the greenies want them to, then we will also see global shortages of other fertilizers such as phosphorus, which is also used not only in agriculture but also in heavy industry to extract rare metals such as cobalt and nickel.

“Those metals are used in lithium-ion batteries that power up numerous electronic devices from cell phones to laptops,” the study explains.

Simon Day, a researcher at UCL’s Institute for Risk & Disaster Reduction and one of the study’s co-authors, warns that a dwindling supply of sulfur “could lead to a transition period when green tech outbids the fertilizer industry for the limited more expensive sulfur supply.”

The study poses three scenarios depicting possible sulfuric acid demand between 2021 and 2040. In all of them, demand exceeds supply, which means there are going to be serious problems in the future unless the green energy kick goes by the wayside – and soon.

“Think the food crisis is bad now? Just wait a year,” wrote a commenter at Natural News about where he thinks things are headed. “75% of all grain goes to livestock. When farmers can’t get grain, they butcher their herds. Watch the price of meat rise.”

“The fertilizer problem will significantly drop crop harvests and that will raise the price and decrease the availability of food dramatically starting ‘next year.’ This will affect EVERYBODY, both rich and poor. You cannot buy what isn’t there, though the rich will fare better as food prices rise dramatically next year.”

Another wrote that the problems cropping up in our world seem to be “never ending.”

“What’s next: a shortage of medical supplies? China makes most of our medical supplies. If China attacks Taiwan, how can the U.S. put sanctions on them?”

“The war in Ukraine has very little to do with the coming food crisis,” added another, speculating that there are multiple wars against humanity taking place on numerous fronts.

“The Climate Change farce has everything do to with it. Just ask the farmers in The Netherlands.”

The latest news about the energy crisis and how it affects the food supply can be found at FoodCollapse.com.

Sources for this article include:

• TheNationalPulse.com
• NaturalNews.com
• NATURAL NEWS

Just a few days after the British were warned they might have to lower their thermostats and delay their dinners this winter to avoid blackouts, Texans were advised last Monday and Wednesday to conserve energy as summer temperatures peaked.

The Electric Reliability Council of Texas, the grid manager for most of Texas, issued a conservation appeal to Texans and Texas businesses as last week’s temperatures were expected to top 105 degrees.

Yet the high temperatures were not all that unusual for Texas this summer. So even though demand was pushing to near-record levels, the primary reason for the call for conservation was “wind generation [that] is currently generating significantly less than what it historically generated in this time period.” On Wednesday, some forced traditional outages and lower solar output (due to West Texas cloud cover) also contributed.

Renewables—wind and solar—have come to dominate Texas’s electricity market. For years, coal and natural gas had been the leading sources of electric generation. Over the last two years, though, renewables have topped both, with wind leading the way.

But not last week.

Since the push for renewables in Texas began in 1999, electric generators have spent about $66 billion building wind and solar farms that have a generation capacity today of 46,949 megawatts, with wind accounting for 35,162 of those megawatts.

Yet as temperatures and Texans’ need for electricity were soaring, wind turbines across the state were still; and last Monday, they were producing about only 8% of their installed capacity. Operating reserves—the backup generation needed to keep air conditioners blowing and factories working—were shrinking.

Something very similar happened last year during the unprecedented 2021 blackouts when 10 million Texans went without power and 12 million without water, many for several days, during freezing temperatures. Energy analyst Robert Bryce noted at the time, “Roughly 17% of (wind’s installed) capacity was available when the grid operator was shedding load to prevent the state’s grid from going dark.”

It should also be pointed out that solar’s contribution to the grid during those pre-dawn hours was zero.

Thankfully, last Monday and Wednesday, the Texas grid did not fail. The wind began to pick up in the afternoons, allowing the state to avoid any blackouts. Yet the lesson learned is clear: During periods of extreme cold and heat, Texans have become deeply dependent on the wind and the sun to keep the lights on.

Why did energy-savvy Texas build an electric grid dependent on such unreliable energy sources? The answer is simple: Since 2005, renewable energy subsidies and benefits from federal, state, and local governments have totaled about $23 billion in Texas. As a result, investors have thrown $66 billion at renewables, chasing $1 of guaranteed return for every $3 invested, regardless of the price they get for their electricity.

Additionally, the Biden administration is doing everything it can to make investments in fossil fuels unprofitable. From bans on pipelines and drilling to the Security and Exchange Commission’s proposed rule on environmental, social, and governance (ESG) investing that would force businesses to disclose uncertain risks due to climate change, it is becoming more difficult and expensive to run afoul of the green agenda.

Despite these costs, renewables are still far more expensive and less efficient in practice than fossil fuels and nuclear energy. For instance, with wind operating at only 8% of installed capacity last Monday, about $51 billion of the $56 billion invested in Texas wind turbines produced nothing just when Texans needed power most. While investors profited, Texas consumers and taxpayers were paying billions for a grid on the verge of blackouts.

On the other hand, imagine if the $56 billion spent on wind had been invested in reliable generation from coal, natural gas, or nuclear fuel. With those sources operating at 90% or more of capacity, no calls for conservation would have been issued last week, electricity prices would be lower in general, and Texans would be working and resting comfortably without a regular fear of grid failure.

Of course, Texans are not the only people experiencing these problems. The reliability of the entire U.S. electric grid is under pressure as it is being forced by irresponsible politicians and bureaucrats to shift away from fossil fuels to renewables. Energy trader Brynne Kelly recently said, “Problems with power grids across the US and other countries are a potential catalyst for chaos in energy markets that are underappreciated.”

Bryce explains that the push for renewables is doomed to failure for the simple reason that they are ancient technologies that have long been eclipsed by more reliable alternatives: “By using hydrocarbons (at first coal, then later oil and natural gas) humans were able to harness ever increasing quantities of power and do so in ever-denser packages. In place of animal power, sun power, and wind power, factories began using advanced waterwheels and coal-fired steam engines.”

The only reason wind and solar have made a comeback in the United States is because of government mandates and the more than $140 billion in government subsidies renewables have received in recent years.

There is still hope, however, that Americans won’t have to experience the energy poverty and forced lifestyle changes of our British neighbors. The solution for avoiding this is straightforward: End the subsidies and mandates, and renewables will go the way of the horse and buggy.

Image by Pexels from Pixabay. Article cross-posted from Daily Signal.