Ben Lefebvre and Josh Siegel’s piece at Politico is a pretty fair examination of the options for energy policy:

U.S. oil production is rebounding fast from the cuts during the first year of the pandemic, adding an average of 630,000 barrels per day last year, and it is expected to grow at least by that amount again this year, according to Reuters energy analyst John Kemp and others. DWS Group, an asset management firm, sees U.S. production growing by 800,000 barrels a day by the end of this year, enough to send the price the of international benchmark Brent crude down significantly.

“American producers have demonstrated they will respond to an international crisis and the price environment,” Mike Sommers, CEO of the American Petroleum Institute, told POLITICO.

But the United States would need to raise its production rate of 12 million barrels a day by nearly 50 percent to replace what’s coming out of Russia, a massive jump. Even if it was possible, it would take years, Republican Sen. Bill Cassidy of Louisiana concedes.

The TL;DR version of it is that it’s a long-term thing as increasing solar/wind would be.

What’s the conclusion to be drawn from that? I would think it tells us that any moves to decrease our energy production increase our vulnerability to disruptions, no?

I’m seeing an increasing number of articles making the same points as Judy Shelton does in her recent Wall Street Journal op-ed:

Begin with the Federal Reserve’s most pressing challenge: inflation. Gasoline prices, which account for 4% of the overall consumer-price index, had already increased in the 12 months to December 2021 more than any other good or service in the CPI basket—some 51% for regular unleaded gas at the pump. The war in Ukraine, and the West’s response to it, will drive dramatic further increases in energy prices and push the CPI even higher.

Prolonged financial-market uncertainty caused by “geopolitical risk” could be as damaging to the American economy as rising inflation. Uncertainty increases rapid trading moves and rattles stock, bond and commodity markets. In combination with already-frayed nerves over pending interest-rate hikes and continuing supply-chain issues, the opportunity to sow market instability grants Vladimir Putin a degree of leverage over American economic prospects.

A 2018 discussion paper prepared for the Fed Board of Governors defined geopolitical risk as “risk associated with wars, terrorist acts, and tensions between states that affect the normal and peaceful course of international relations.” The study concludes that “exogenous changes in geopolitical risks depress economic activity and stock returns in advanced economies, most notably in the United States.” Importantly, the analysis points out that “these adverse effects are sparked by heightened threats of adverse geopolitical events, rather than their realization.”

and

Two options for reducing inflation through higher interest rates are available to the Fed: raising its administered rates or selling some of its balance-sheet holdings. The former approach would benefit commercial banks by paying them a higher rate of interest on the reserve balances they hold in depository accounts at the Fed. Money-market funds would also earn more interest on overnight reverse-repurchase agreement balances. The funds used by the Fed to pay interest on these balances come out of its own portfolio earnings, which are otherwise remitted back to the Treasury as revenue to the federal budget. American taxpayers might wonder why commercial banks, including the foreign-owned, should collect higher interest on money sitting idle at the Fed.

It would be better if the Fed engaged in more traditional open market operations, reducing its trove of Treasury securities ($5.7 trillion) and mortgage-backed securities ($2.7 trillion)—not only to increase their supply to the market but also to reduce the Fed’s own footprint in financial markets. The Fed’s massive purchases of government-backed securities, more than $4.5 trillion since March 2020, have obscured price signals and distorted investment returns; its holdings should be downsized.

As the graph at the top of this page indicates, increasing oil prices are, at the very least, contributing factors to recession and some have even suggested they are causative. While I recognize that Dr. Powell must be sorely tempted to postpone taking steps to curb inflation while the Biden Administration for its part must be tempted to take steps to ease the pain that inflation is causing, I think that what is needed both economically and politically is coordination between the Federal Reserve and the Administration of a sort that hasn’t been seen in, well, ever. The Fed should take steps to curb inflation; the Administration should take what steps it can to increase domestic oil production and above all not aggravate the situation.

Simultaneous recession and inflation would be no fun at all. I doubt there is anything that will help the Administration more in the coming midterm elections than reducing inflation and stabilizing the price of oil would reduce the likelihood of recession while weakening President Putin’s hand.

There’s a good article at Foreign Policy by Maria Snegovaya digging into a question that has been brought up in comments here—why did Russia invade Ukraine now:

First, the European Union is divided on Russia. While new EU members in Eastern Europe tend to support stronger action against Russia, the two leading EU powers, Germany and France, are conflicted on the Russia issue. France is distracted by its upcoming presidential elections in April 2022. French President Emmanuel Macron’s continuous insistence on the need for the European Union to pursue its own talks with the Kremlin separately from the United States (as possibly part of his electoral campaign) has raised fears of a deepening split in the West’s response to the Kremlin. Germany, which is anxious to become the European gas hub for Russian gas following the completion of Nord Stream 2, is prepared to make more concessions to the Kremlin, as shown by its recent refusal to give arms permits to Estonia so supplies can reach Ukraine.

Moreover, since April 2021, the Kremlin has undertaken several (likely intentional) steps that reduced Russian gas supplies to Europe and led to the EU’s current unprecedented increase in prices and gas shortages. Europe’s continuous dependency on Russian gas, with about 40 percent of gas imports coming from Russia, further limits its ability to counter Russia’s actions in Ukraine.

Second, over the last year, the relative decline in the United States’ international standing has become more apparent, as portrayed by its chaotic Afghanistan withdrawal. According to the Kremlin’s public statements, it viewed this as a demonstration of waning U.S. international influence. The Biden administration’s Russia policy record has so far appeared fairly weak: It lifted sanctions on Nord Stream 2, issued largely symbolic sanctions in response to Russia’s poisoning of dissident Alexey Navalny, and has put continuous emphasis on China and attempted to “park Russia.” Even more importantly, the Kremlin has a window for action until the U.S. midterm elections. The situation might change afterward if Republicans take control of key foreign affairs committees in Congress and increase pressure on the administration over Russia.

Similarly to the EU, the Biden administration may currently be constrained in its ability to impose strong sanctions on Russia in response to a further escalation in Ukraine. Serious sectoral sanctions could risk another spike in oil and metal (copper, nickel, steel, palladium) prices, creating a risk of skyrocketing inflation in the United States or even stagflation. This further shortens Putin’s action window.

Third, while skyrocketing oil and gas prices are constraining the EU and United States, they are giving Putin more leeway. On the international stage, Russia tends to act as a typical petrostate that gets aggressive and ambitious once it accumulates substantive oil and gas revenues. The influx of large revenues allows it to prioritize military expenses instead of addressing social and infrastructure issues.

These considerations explain the timing of Putin’s proposed ultimatum to the West. This window of opportunity is likely to close as the U.S. midterms near. Yet currently, this combination of circumstances offers an ideal moment for Putin to use the EU and United States’ weaknesses to push for more concessions on Ukraine.

Clearly, this was written some time ago—the circumstances have changed somewhat but I think the points she raises still apply. Said another way we should take care to avoid strengthening Russia’s hand rather than weakening it.

There are other ways for us to intervene in Ukraine without doing so militarily. Germany’s recent announcement that it would double its military spending is a start, a first step. Separating Germany from Russia should be an objective of the U. S.’s.

If we could encourage China to stop supporting the Russians even tacitly, we might win the war in Ukraine without firing a shot. China is Russia’s largest trading partner—more Russian exports go to China than the next three largest trading partners combined.

Furthermore, keeping the price of oil low would hurt Russia more than all of the sanctions we have announced. If the price of oil rises faster than the decrease in Russia’s exports, it’s possible that Russia could actually benefit from the war which is, presumably, not our intention.

Just a few thoughts.

Last night, nearly for the first time since early in the COVID-19 pandemic, my wife and I ate a decent New York strip steak. Saturday night is steak night in our household—nearly every Saturday we have steak, one of only two times a week we eat beef. The other time I prepare burgers.

But the steaks haven’t been very good. For well over a year the steaks have been tough, stringy, and lacking in flavor but last night’s was excellent. Not to mention expensive. Some of the credit might be due to the new (to me) way of preparing the steak. Here’s what I’m doing.

I season the steak and then sauté it in a non-stick pan. I cook it for two minutes, then flip it, cook for two more minutes, and repeat until the desired degree of doneness. For us that’s medium rare to rare which takes about 10-12 minutes. Something depends on the thickness of the steak.

If anyone is concerned about our health, my wife and share a small steak&mmdash;4 oz. per person. Same with the burger: 4 oz. I weigh practically everything that goes into our mouths. Over the period of the last two years my daily calorie intake has been about 1,400 calories/day. We mostly eat fish, chicken, and vegetables (eggs don’t agree with my wife).

Here’s the advice of the editors of the Washington Post:

Deterrence — the most time-tested of security concepts — warranted President Biden’s decision to dispatch fighter aircraft, attack helicopters and infantry to the Baltic states, and a 7,000-strong armored unit to Germany. NATO itself has for the first time activated a 40,000-member rapid response force, drawn heavily from the alliance’s non-U.S. members.

Now, though, for some new ideas: The United States must reconsider its focus on China in light of the renewed geopolitical challenge from Russia — and Moscow’s growing cooperation with Beijing. We must match military budget resources to the combination of threats. NATO should consider admitting Sweden and Finland. Today’s sanctions on Russia could harden into long-term blockages in global trade flows, which were already becoming less fluid because of protectionism and the pandemic. U.S. supply chains may henceforth have to take geopolitical criteria into account.

No commodity is more geopolitically significant than energy, including oil and gas, which the United States possesses in abundance — and which, along with low-carbon nuclear, solar and wind energy, can bolster our security and that of our allies. Europe buys 38 percent of its natural gas from Russia, which means — bluntly — that Europe’s businesses and consumers financed Mr. Putin’s military buildup. This must end.

No country must think anew more urgently than Germany, which took a big step in the right direction on Saturday when it announced its first-ever direct supply of lethal weapons to Kyiv. Over the longer term, it must address its hollowed-out military, the result of a historically rooted but strategically unsustainable aversion to investment in defense. After Russia attacked Ukraine, Germany’s top military commander, Lt. Gen. Alfons Mais lamented that his army was potentially unable “to successfully fulfill . . . our obligations in the alliance.”

My advice would be somewhat different: learn to walk and chew gum at the same time. Hearkening back to my post of yesterday, we need to identify our priorities and determine which are more important to us than others. We can’t ignore one priority in order to concentrate on another. That would especially be an error if the priority on which we choose to focus is actually the less significant one.

I think there’s a kernel of truth in Thomas Friedman’s most recent New York Times column. Russia’s invasion of Ukraine bears some resemblance to the monarchical wars of conquest of 200 years ago but there’s a major difference: it’s being shown nearly in real tie in thousands, maybe millions of videos and that’s new:

Our world is not going to be the same again because this war has no historical parallel. It is a raw, 18th-century-style land grab by a superpower — but in a 21st-century globalized world. This is the first war that will be covered on TikTok by super-empowered individuals armed only with smartphones, so acts of brutality will be documented and broadcast worldwide without any editors or filters. On the first day of the war, we saw invading Russian tank units unexpectedly being exposed by Google maps, because Google wanted to alert drivers that the Russian armor was causing traffic jams.

You have never seen this play before.

but I think he’s missing something basic. 720,000 hours of video are uploaded to Youtube per day. Let’s assume arguendo that the statistics for TikTok, Instagram, and Facebook are about the same. Obviously, it’s impossible for any one person to watch all of that. How much can you rely on the veracity of any given video uploaded? I would say not very much. This goes back to the wisecrack represented in dozens, hundreds, or thousands of memes “you can’t put anything on the Internet that isn’t true”.

Whether it’s true or not has little relevance to whether people believe it or its ability to affect popular opinion. Assume everything is disinformation and propaganda.

Said another way the big difference between Russia’s invasion of Ukraine and prior major conflicts is that we’re being deluged in a torrent of disinformation and propaganda and have little way of distinguishing what is true from what is false.

I think that raises risks unlike any we’ve ever seen before.

I found this report from Bojan Pancevski at the Wall Street Journal encouraging:

BERLIN—Germany will boost military spending above 2% of GDP and create a strategic natural-gas reserve, Chancellor Olaf Scholz said Sunday, marking a significant shift in the country’s defense and energy policies in reaction to Russia’s war in Ukraine.

The measures, all of which had long been resisted by successive governments and will now be reflected in this year’s budget, underline how profoundly Russia’s attack on Ukraine is upending European politics after almost eight decades of nearly uninterrupted peace on the continent.

“We have to ask ourselves: What capacities does Putin’s Russia have? And which capacities do we need to counter his threats?” Mr. Scholz told parliament, gathered for an extraordinary session on Sunday. “It’s clear, we will need to invest a lot more in the security of our country to defend our freedom and our democracy.”

“Putin wants to establish a Russian empire…the question is…whether we can summon the strength to set boundaries to warmongers like Putin,” Mr. Scholz said.

and

Mr. Scholz said that he would immediately invest 100 billion euros, equivalent to $113 billion, in weaponry. Starting now, he added, Germany’s military spending would exceed the North Atlantic Treaty Organization’s spending target of 2% of GDP, a goal that none of his predecessors managed since the end of the Cold War and that Germany had pledged to reach by 2024 as part of its commitments to NATO.

He said the government would create strategic gas reserves and finance the building of two liquefied natural gas import terminals on the country’s northern coast.

Mr. Scholz also announced concrete arms-systems procurements including the decision to buy state-of-the-art drones from Israel and F-35 warplanes from the U.S., which he said would be used to amplify NATO’s nuclear deterrent against Russia.

It’s one thing to announce something and another actually to do it. For years the Germans have been long on rhetoric and short on fulfillment. If true, it would be a dramatic shift in German policy and in my opinion steps in the right direction.

I think it was California Sen. Hiram Johnson who said “Truth is the first casualty of war” more than a century ago and Russia’s invasion of Ukraine is no exception. I literally have no idea of what is happening there. The Russian news sites certainly aren’t reliable sources, some of the pro-Russian sites are clearly Russian information operations sites, while others have no more idea than I do.

The source of my confusion is that I don’t know to what degree American news sites are effectively information operations sites anymore.

If you pay attention to the Russian news sites and pro-Russian sources, the Russians are engaged in a police action, defending ethnic Russians and pro-Russian Ukrainians from persecution by neo-Nazis in the Ukraine or responding to provocations from the West which intends to do to Russia what was done to Yugoslavia and the Russian forces are proceeding slowly and methodically, meeting stiff resistance from the Ukrainians. If you pay attention to the American news sites, the Russian troops are incompetent and demoralized, definitely losing to the Ukrainians, and Putin is losing political support in Russia.

My predisposition is to believe that the Russians are meeting with unexpected resistance from the Ukrainians and that that the war is far from over.

I also think that events have cast significant doubt on John Mearsheimer’s claim that Putin’s objective is to wreck Ukraine rather than see it join NATO and the EU.

My inclination is to avoid drawing any conclusions until more time has passed.

I hope that the Ukrainians succeed in defending their independence and are willing to accept a pluralistic society, accommodating both Russian-speaking and Ukrainian-speaking citizens.