As the conflict rages in Ukraine, the Empire known as the “The West” has sought to isolate Russia economically from the rest of the world. Whether that is a good idea or will even work without backfiring is a subject better left for geopolitical analyst, personally I recommend reading up on the works of Pepe Escobar on Eurasian integration for perspective you may not have been exposed too.
At the time of this article crude oil prices are fluctuating wildly anywhere from 110-135$ per barrel. Locally my gas prices are sitting at 3.75$ per gallon, while the national average trends upward from 4.32$ a gallon. Diesel, the master resource of all true economic activity is averaging above 5$ a gallon, which will turbocharge the already critical inflationary environment. The sanction involved against Russia have as of yet not truly taken shape regarding the blocking of oil and gas exports from Russia. Most of the insanity in energy and commodity prices are being driven by expectations of sanctions. In a few weeks the Russian Duma will decide on bans of exports to nations deemed hostile to The Russian Federation, this is when we will truly start to see the effects of export scarcity in the energy markets.
Electric cars….. Like an 8 year old that took about fifteen seconds to think of a response to these rising energy prices the Biden Administration and combined west has come up with their official public answer. To say these leaders are incompetent is an understatement, this is a sign of catastrophic organizational collapse.
To say that the current crop of political elite are out of touch, isn’t even sufficient, they are not even in the same area code of economic reality. Part of the issue is that since the 1980’s we have seen a steady decline in the number of engineers, scientist and military members in government and the takeover of social science hacks along with the ever expanding malignant growth of lawyers and lobbyist. I think this phenomena is best explained in Spiro Agnew’s Generation Gap Speech
“Sometimes it appears that we’re reaching a period when our senses and our minds will no longer respond to moderate stimulation. We seem to be approaching an Age of The Gross. Persuasion through speeches and books is too often discarded for disruptive demonstrations aimed at bludgeoning the unconvinced into action.
The young – and by this I don’t mean by any stretch of the imagination all the young, but I’m talking about those who claim to speak for the young – at the zenith of physical power and sensitivity, overwhelm themselves with drugs and artificial stimulants. Subtly is lost and fine distinctions based on acute reasoning are carelessly ignored in a headlong jump to a predetermined conclusion.
Life is visceral, rather than intellectual. And the most visceral practitioners of life are those who characterize themselves as “intellectuals”. Truth to them is “revealed” rather than logically proved. And the principal infatuations of today revolve around the “Social Sciences”, those subjects which can accommodate any opinion and about which the most reckless conjecture cannot be discredited.
Education is being redefined at the demand of the uneducated to suit the ideas of the uneducated. The student now goes to college to proclaim, rather than to learn. The lessons of the past are ignored and obliterated in a contemporary antagonism known as the “generation gap.”
A spirit of national masochism prevails, encouraged by an effete corps of impudent snobs who characterize themselves as “intellectuals”.
So where is the “subtly” and “fine distinctions based on acute reasoning?”
Electric cars are consumer vehicles and have no effect of the extraction/transportation of consumer goods, and in theory would only drive down gasoline prices while wrecking the grid.
Diesel equipment forms the foundation of the real economy.
First in extraction industries in the form of Tractors, heavy mining equipment, construction and heavy processing machines.
Second the extraction industries products have to be transported to market on roads maintained by heavy construction equipment, carried by a variety of ships, long haul freight and trains all running on diesel.
Without a functioning extraction and transportation supply chain functioning via diesel, consumer electric cars will have nowhere to go, no roads/bridges to drive and nothing to do.
Electric cars in the west are very very expensive and the batteries are not currently recycled.
Electric cars only seem environmentally friendly because via a form of accounting fraud ignore the embedded fossil fuel energy used in the production and manufacturing of the batteries themselves before they even arrive to consumers. Environmental and energy cost are frontloaded into production, and electricity production externalities are ignored as well.
The reality is that the Starbucks drinking “City Slicker” driving a Tesla to whole foods should be praying to massive diesel engines for their continued existence. The coffee beans, which don’t grow in Seattle believe or not, are shipped across the ocean via a container ship consuming around 63,000 gallons of diesel per day and each ship is putting out the emissions and fuel consumption of up to 50 million consumer cars equivalent. The roads/bridges they drive were built and maintained by diesel equipment. The food in the store is transported by shipping or long haul freight. In this simple example we can begin to understand that an electric car has no purpose without a diesel economy to back it. No food in stores, no jobs no nothing. Without a better way to say it, electric car’s will do jack shit to do anything about energy prices. Not to mention the issues with a electric grid past it’s expected lifespan, or charging infrastructure.
Was the current energy crisis we find ourselves in that unpredictable?
Back in 2007 about a year before the Lehman Bros incident, Oil prices north of 140$ and the cataclysmic banking failures and bailouts, a Dallas independent petroleum geologist by the name of Jeffery Brown was outlining his ELM (Export Land Model) Theory. It was simple, as countries exploit their oil resources and enter declines in production, their domestic consumption grows and the net effect is their oil exports shrink and they go from net exporters to net importers. This effect is a double edged swords on the total export market because countries not only stop exporting but enter the battle of bidding for shrinking exports.
Egypt (2011)
China (1994)
Indonesia (2003)
Malaysia (2010)
Vietnam (2010)
Argentina (2017)
As a result of this the list of countries capable of exporting oil is decreasing increasing their importance on the world stage. A few days ago the Biden Administration made the rounds of oil begging to Venezuela, Iran, Saudi Arabia and Qatar quite unsuccessfully. Are the the leaders in charge actually aware of the issues of declining oil production and shrinking exports? If they were aware there was nothing substantial they could do about the oil crisis, how would they respond to maintaining order in the face of a declining economy? Would they feel the need to increase the level of control over the population to maintain the stability and functioning of the modern nation state? Hanlon’s Razor comes to mind, "never attribute to malice that which is adequately explained by stupidity." In this case I am not sure all of this can be adequately explained by stupidity. Aggressive bipartisan coordination with big tech, in bringing about a biosecurity state, censorship, kill switches in cars, the aggressive push towards electric cars which have limited ranges and long charging times for all practical purposes. Electric cars and even modern gasoline powered vehicles are requiring increasing amounts of computer software and semi-conductors just to drive from A to B.
whether stupidity or malice, what’s clear is higher energy and commodity prices are locked into the near future until demand destruction cuts the economy back down to lower levels of real economic activity. Buying an electric car if you can afford it will do little for your job security and ability to pay for anything you use electric car for. While I don’t exactly expect the oil and gas industry to come roaring back to life bringing decades of cheap and easy economic growth, all we can do at this point is simplify our lifestyles in ways that can reduce our dependence on the traditional economy, become more resilient and adaptable. After all most of the degenerate hedonism made available to us by the age of cheap oil is killing us anyway. This is part of my purpose for the story I am telling, we will need to live within the limits of nature sooner rather than later not from high minded moralism but from necessity.