Gas attack

  • 2005-09-14
If there is any form of intelligent life out in the universe gazing down at our planet, one would have to think that, in the past few days particularly, these extraterrestrial observers would be astounded by the utter incompetence of mankind. They would see the commotion and hysteria involving prices for crude oil and petrol and wonder if any other planet in the universe could have possibly created a more useless, self-defeating energy policy. "With all your natural resources, all your scientific potential," they would look down on us and say, "why do you continue to rely so heavily on one form of energy?"

Aside from that first post-independence winter in 1991-92, when a rancorous Russia turned off the lights, the Baltic states are facing their first real energy crisis. Gasoline prices are climbing weekly, in tandem with world prices, yet judging by politicians' reactions everyone is to blame except world markets: Mazeikiu Nafta, retail traders, anti-trust authorities. Solutions include the preposterous 's importing low-quality Belarusian gas (and thereby support the Lukashenko regime) 's and the plausible 's getting a waver on increasing the EU mandated excise tax 's but no one is willing to discuss lowering VAT.

It is reasonable, of course, to spread the blame around 's Katrina, cartels, Asian demand, American gas-guzzling autos 's but the bottom-line is that world energy policy is seriously flawed. We are all bearing witness to it during these post-Katrina days. Granted, the hurricane was an extraordinary event, but could it be because, in allowing our energy system to develop the way it has, we have given Katrina its extraordinariness? It is astonishing that 30 years after the OPEC crisis one storm can come along and cause extreme economic havoc around the world. Some will point to the war in Iraq, the growing Chinese appetite, but these are just excuses. To boot, they are more reasons why governments need to facilitate the development of alternative energy sources that will end this pitiful reliance on hydrocarbons.

Finally, a word on this week's other major energy story 's the Russian-German pipeline. Listening to Polish and Baltic commentators, one would think that, in addition to the 4 billion euro project, Mr. Schroeder and Mr. Putin have signed a new secret protocol. The plain truth is that every country has the right 's is obliged 's to pursue its own independent energy policy (with consideration of neighbors' interests, of course). So if Russia and Germany want to have a gas pipeline circumventing the three Baltic states, it is their prerogative, and we will have to live with it. Criticism that the pipeline makes no economic sense and is a political decision flies in the face of a simple analysis, which shows that over the long run the project is advantageous to both Russia and Germany.