Russia, Ukraine, and the price of oil

It looks as though Russia will take its second bite out of Ukraine at the end of the Winter Olympics.  Its first bite, Crimea, was taken at the end of the Sochi Winter Olympics in February of 2014.  No one will stop the Russians now, just as no one stopped them eight years ago.  Economic sanctions won't deter them now, just as they didn't stop them before.

Modern Russian adventurism is tied to the price of oil.  With oil currently above $90 a barrel, the Russians are taking in $1 billion a day in hard currency, and sanctions won't put a dent in that income.  Oil is a fungible commodity.  There will always be a market for Russian oil somewhere.

In 1979, when the Russians invaded Afghanistan, oil was at $115 a barrel.  In 2014, when the Crimea was invaded, it was at $120 a barrel.  In contrast, in 1986, when Gorbachev threw in his hand and gave up on competing with the United States militarily, the price got down to $11 a barrel.  Without hard currency from oil, Russia could no longer afford to play the superpower game, and the Cold War was over.  As Reagan had predicted, and helped bring about, we won, they lost.  Oil was a big part of it.

In the end, Russia will likely wind up with a piece of eastern Ukraine, where most of the ethnic Russians live.  Russians are withering on the vine, demographically, and Putin wants as many Russians in Russia proper as he can get.  What's left of Ukraine will not join NATO and will be, effectively, a satellite of Russia.  Demography is not destiny, but geography is.  Demographics can change.  Geography never does.  The Ukrainians are cursed because of their location next to Russia and terrain that provides no defense.

It's not fair, and it's not right, but there is a lot of injustice in this world.  The American people deplore all of it.  But we won't fight a war to stop it.  Vietnam, Iraq, and Afghanistan have taught us a lesson.  From now on, we will fight wars only when our national security is at stake.  That's definitely not the case in Ukraine.

Joe Biden will bear some of the responsibility for the invasion of Ukraine.  Beginning on his first day in office, with the cancelation of the Keystone pipeline, he declared war on American energy production.  To him and his fellow environmental extremists, it is the price of fighting climate change.  It's a high price, but he's willing for you to pay it.  He wants high energy prices in order to depress consumption, reduce pollution, and incentivize the transition to alternative energy sources.  When he took office, oil was around $50 a barrel.  It will be $100 a barrel before long.

High oil prices enrich some of the worst human rights violators in the world — the Russian autocrat Putin, the Saudi royal family, and the Iranian mullahs.  To curb their wealth, and their mischief-making, we need to encourage North American oil and gas production.  American shale production helped bring down the price of oil, and it can do so again.  Federal lands, most especially Alaska's ANWR, need to be opened up again for exploration and production.  Until then, the Saudis, the Russians, and the Iranians have some fat years ahead of them.

We were well on our way under President Trump.  The next president will be a like-minded Republican, barring satanic intervention.  We'll be back on the road to energy dominance on January 20, 2025.  Until then, we'll pay at the gas pump, we'll pay to heat our homes, and we'll pay with inflation.

The political coalition that brought down Trump in 2020 was fanatical in its determination.  Those people were willing to break the law, destroy their own credibility, and violate every American political norm.  They were willing to foist an incompetent old fool on the country as president.  None of that mattered.  The only thing that mattered was beating Trump.

We're all paying the price of this fanaticism.  Sadly, so will Ukraine.

Fritz Pettyjohn served in the Alaska Legislature during the Alaska economic recession of the mid 1980s, which resulted from low oil prices.

Image: Wikideas1.

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