I have little doubt that there are plenty of people in the fossil-fueled corners of our economy who are silently, and perhaps not-so-silently, cheering on Donald Trump’s latest war. Oil and natural gas prices spiked upwards in the wake of the military strikes against Iran, with some regional markets seeing price increases as high as 45 per cent. That could just be the beginning of the chaos, too, given the Iranian regime’s ability to close off the Strait of Hormuz and use its one-way drones to attack gas deposits in Qatar and oilfields in Saudi Arabia. If that happens, expect to see the return of $100 per barrel oil. 

I have even less doubt that this is objectively bad news for those same people. Yes, all things being equal, higher oil and gas prices are good for the bottom lines of the oil and gas companies headquartered in places like Calgary and Houston. But all things are very much not equal right now. Unlike the last American misadventure in the Middle East, when a structural shortage of global oil supplies created one of the most lucrative bull markets for oil producers in history, we are still in a market with a structural oversupply of both oil and LNG. 

More importantly, the countries that have to contend with suddenly soaring commodity prices have increasingly affordable alternatives that just keep getting cheaper, bigger and easier to deploy. It’s why Cuba is in the midst of a massive solar boom after the Trump administration cut off its access to fuel supplies and why Ukrainians are installing solar panels at a furious pace in response to Russia’s attacks on their power grid. It’s why Europe will continue to wean itself off volatile LNG imports as quickly as possible. And it’s why developing countries around the world — and especially in the global south — are leapfrogging greater fossil-fuel dependency in favour of home-grown solar. 

None of this movement away from oil and gas is driven by concern about climate change or carbon emissions. Instead, it’s a rational response to a fundamental flaw in the fossil-fueled economy that the shamelessly pro-fossil fuel Trump administration seems determined to keep highlighting for other countries. For all their talk about the supposedly unreliable nature of renewable energy, it’s actually fossil fuels that create the greatest risks to the countries that have to import them. The price of oil and LNG fluctuate wildly and are subject to the whims and geopolitical aspirations of countries including Russia, Iran and, increasingly, the United States. 

Renewable energy, on the other hand, suffers no such defects. It just gets relentlessly cheaper and more efficient, sometimes by leaps and sometimes by bounds. And as energy analyst Benoit Marcous wrote on social media, it looks more and more like the best path to both economic and energy security. “Repeated shocks like this push countries to reassess what energy security really means. Wind, solar, storage, and, where available, hydro are not immune to operational challenges. But they are not hostage to chokepoints like Hormuz. In that sense, they increasingly look less like a climate choice and more like a stability strategy.”

This should give pause to Canadian politicians, whether it’s Alberta Premier Danielle Smith or federal Energy Minister Tim Hodgson, who want to use the latest bout of geopolitical instability to pound the table for more Canadian energy exports. Oil and LNG prices may spike even higher in the days and weeks to come, but it’s hard to imagine the Trump administration has any appetite for a prolonged conflict when it has consistently — or, at least, as consistently as it’s capable — made low gasoline prices and low inflation a key part of its pitch to voters ahead of November’s midterm elections. It’s also worth remembering that just six months after the first Gulf War, when Saddam Hussein invaded Kuwait and set its oilfields ablaze, global oil prices were below where they had been before the tanks started to roll across the desert. 

But even if prices return to where they were before Trump decided to strike Iran, global energy markets won’t. Buyers of LNG and oil cargoes in major markets such as India, China and Europe, not to mention dozens of smaller countries who are even more exposed to commodity price volatility, won’t forget how Trump’s latest whim-driven foreign policy intervention impacted the prices they pay. They will listen even more closely to the pitches being made by clean energy companies, who can better sell them on the virtues of true energy independence, especially as the cost and duration of battery storage continues to improve almost exponentially. Here, as with so many things, Trump is in the process of destroying the very thing he’s trying to defend. By constantly reminding the world about the inherent volatility associated with importing fossil fuels, he’s giving them every reason to wean their economies off them as quickly as possible. Canada’s fossil fuel industry can’t say it wasn’t warned. 

© National Observer