The news is replete with Machiavellian images from the Crimea and Ukraine.
Russian tanks and military vehicles rolling through city streets. Masked soldiers with no insignia on their uniforms toting automatic weapons among unarmed citizenry. A deposed Ukrainian President. The press rings their hands while diplomats and politicians both past and present weigh in with opinions.
Commentary varies from political ping pong on Putin’s part to the inevitable resurgence of the Soviet Union and the resurrection of the Cold War. Regardless of the political motivations rolling around inside of Putin’s head, motivations that we can only take our best guess at, there is a direct connection to these events and one possible future of the state of Utah.
Governor Gary Herbert just put a proposed budget for the next fiscal year in front of the state legislature. While it is noted that state tax revenues have dropped to the tune of $83 million from the previous year, the budget basically looks balanced even though increases in educational spending and a few other areas may not reach the added potential some would wish. At least the state is operating at or close to a breakeven point unlike some of our neighbors such as California, Illinois, New Jersey or Michigan. Those states, and many others of note, are running at deficit levels that would make the most hardened Washington over-spender blush.
But what does this have to do with events in the Ukraine?
Let’s look at the most probable economic motivations for Putin’s actions in the Ukraine. Ukraine and the Crimea run no less than eighteen oil and natural gas into Eastern Europe. Analysts estimate that roughly one third of Europe’s natural gas and oil flows through the Ukraine. Putin’s military has been transformed into a lot of rust and dust since the fall of the Berlin Wall. Communist policies have not engendered economic vitality anything close to the west over the last few decades…for obvious reasons. One of the quickest ways for Putin to revitalize the Russian military machine, and thus any geopolitical objectives he may be harboring, is capturing revenues from the natural resources and energy being supplied through the Ukraine.
It does not take a doctoral level economist to connect the dots.
That energy supply is also the main motivation no European country is standing up to the lawless invasion of the Crimea and Ukraine. No one is standing behind our President to take any action other than obligatory nods and rhetoric to the contrary. Energy needs trump violations of international law, or so it seems. Since it is obvious that the current Administration’s foreign policy is essentially toothless, what sort of actions might the United States take, short of starting World War Three, to reassert a position of power and send a stern message to Russia that such actions will not be tolerated?
Economic sanctions would be fairly meager since we do not do that much business with Russia to begin with.
How about trumping Russia’s energy production and turning Europe’s need for energy to a new, less expensive supplier, the United States of America? This would be a move that hits ‘em where it hurts, and anyone involved in geopolitics knows it. He who controls the flow of oil and gas production has friends and allies anywhere in the world market.
How does that affect the Utah state budget?
Jason Chaffetz, Mike Lee, Rand Paul, Dick Cheney and numerous other Washington insiders have decried our lack of a vibrant domestic energy policy for some time. We have already identified more oil, oil shale and natural gas lying beneath our own soil than the rest of the world’s known reserves combined. One estimate I read calculated the volume of new oil discoveries in North America over the last decade at approximately one hundred and sixty years of reserves at current consumption rates.
According to the IER North America Energy Inventory, the United States currently has 20.6 trillion barrels of proved reserves, and that figure is incredibly conservative. A significant amount of those resources have been found in the Dakotas, Montana, Wyoming Colorado and, yes, you guessed it, right here in Utah. In fact, I have had it confirmed from knowledgeable sources that there are significant unpublished oil finds throughout the state outside of the activities in northeastern Utah.
We are, as the old saying goes, sitting on a fortune.
Utah could see an economic boom through the rational and responsible harvesting of energy resources that would be unparalleled in the State’s history. Countless new jobs and tax revenues would be the natural consequence of ramping up the energy industry resting, as it were, right underneath our feet. Eking out three percent increase in state spending and doing more with less in our fiscal budgets could easily be remanded to history by tremendous revenues incumbent in a booming energy industry.
There is only one problem: the current Obama administration has not forwarded any significant domestic energy policy and can be arguably seen as hampering it.
It is interesting that a country with the most acute environmental concerns cannot recognize the power and benefit in the position of being the most responsible harvester and supplier of energy for others. We cannot even get a project as straightforward as the Keystone pipeline approved due to radical environmental concerns.
What might we be able to do if we united our political efforts to not only responsibly produce enough energy to supply Europe but wean ourselves of dependency on foreign oil as well? Not only would it transform the current state of geopolitical intrigue, it would boost our national economy as well as put more dollars into Utahan’s pockets and into our state treasury. That is an economic situation that anyone could live with if managed correctly.
We have to ask ourselves the tough political question: why are we not doing it?
Especially when President Putin has given us more than enough impetus to find real economic strategies and solutions to counter looming Soviet aggression and set our own place at the table of geopolitical natural resource maneuverings. It is fair to say that every person in this nation and in this state has the potential to benefit from real and responsible solutions to the larger scale of this crisis and it begins with harnessing the resources we have available.
Read more from David M. Rogers at www.middlemostmusings.com