I did not realise that Russia has such leverage on natural gas relative to oil:
> Russia’s oil sales are 30% of the country’s revenues, but the gas market is only 6% of the state’s budget. A total loss of Russian volumes into Europe would be catastrophic. As in - industrial shutdowns, blackouts, hypothermia catastrophic.
> The one-sided balance of power with respect to natural gas leads us to expect that Europe will not sanction gas, but Russia will hold its volumes as a sword of Damocles over the continent to extract maximum value from its position. Just like it did last Monday.
That's certainly illuminating, and, from the point of view of geopolitical mercantilism, alarming!
The German natural gas dependency is going to be the strategic blunder of the decade, though there is an argument that it was done in part because Germany believed that strong trade ties were a good impediment to war.
What it does distinctly reveal is that ultimately there's no reasonable negotiations with dictatorships: if the other party can't be easily replaced internally due to outcomes for their people, then you don't have the leverage you think you do.
The lesson here should be globally that we should start to expect the same thing from China: Xi's position is too unassailable right now to think that things can't get substantially worse before he'd be in any real danger of being replaced.
There was a frightfully insightful recent twitter thread making rounds, saying that extractive industries are perfect to be headed/owned by mob bosses, because the more complex the industry the more leverage the technical employees have. I.e. in extractive industries they have close to none, in manufacturing they have a solid measure of respect, while in tech industries they get to dictate the culture of the company.
Which means a mob leadership (we're not pretending anymore Russia doesn't have one of those, right?) will favor extractive industries over everything else, not just because they're much easier to own and exploit, but because allowing other types of companies to grow creates power centers outside of their control. They actively prefer to outsource services abroad, even if they are more expensive and create reliance on foreign partners.
Which means Germany's bet was wrong on two counts:
1. It propped exactly the kind of industries where the money goes in mob's pockets
2. It was unnecessary, because Russia was making itself incredibly vulnerable to sanctions all by itself by avoiding to develop anything more complex than a well or a mine (normally I'd say defense excluded, but seeing the quality of their current armed forces, it's more like an argument that even defense is included).
The natural question here is if the blunder is an honest mistake... but honest mistakes and motivated reasoning go suspiciously well together, and by all accounts the German elites more than occasionally gained from trade with Russia.
Sure that's true for any nation having huge stock of natural resources (i.e Nigeria, UAE). But still, the west wants cheap oil and other resources. Mistake is perhaps, from the power play perspective, not to have tighter relationship with the government.
Sadly, regular people always suffer in these kind of situations...
I'm impressed, for once the label "frightfully insightful" was, if anything, under-selling the linked content. Fascinating, thanks for mentioning it :)
> The German natural gas dependency is going to be the strategic blunder of the decade, though there is an argument that it was done in part because Germany believed that strong trade ties were a good impediment to war.
It worked; Germany is unwilling to wage war upon a trading partner its developed a dependency on.
The problem is Russia didn't develop a dependency on outside trade, so it's less concerned about maintaining trade.
I believe one could make a compelling argument that Russians themselves are more prepared to endure hardship for politico-economic reasons. They're just so used to it...
I am not sure it is a matter of being "prepared" to suffer rather than a defeatist cultural attitude about the ability to effect change. It's not hard to understand where that attitude comes from: for the past century, any hint of dissention was rapidly repaid with a one way ticket to a gulag in one form or another. This isn't to say that e.g. there isn't genuine support for the regime; there certainly is, but there's also low inclination toward the kind of activism that changes hearts and minds, and consequently state propaganda has an outsize influence on political opinions.
Meanwhile in the West, we are of the belief that if we complain loudly enough about things, they will get better. That attitude is correct a surprisingly large amount of the time!
So next time you want to complain about people complaining about stuff that complaining about won't fix, remember it's (usually) a good thing that we're culturally wired to be difficult to please.
....And yet, there are still thousands and thousands of people protesting this war in Russia. Despite knowing that they will almost certainly be arrested, and may never again see the light of day.
Yeah, I think that's a fair assessment. The value that Russian civic culture places on protests, demonstrations and complaints of all kinds is, as you say, rather different.
Hard for me to say. But my point was this: where a Western government would be seriously imperiled by so much as inconveniencing its consumers in a substantial way for a prolonged period, that is certainly not true in Russia.
Yeah. It's important to remember that Mao killed between 15 and 55 million of his own people during the GLF and he still managed to claw his way back to power with the Cultural Revolution a few years later.
This is not specific to Mao. Even in democracies, the people often vote against their own interests or often compromise on fundamentally important issues for the sake of luxury beliefs or in-group approval.
Russia has no way of winning this conflict. Their military is facing huge losses (increasing their demographic problems), there is no way they can keep Ukraine occupied and they have given up on regime change. The Russian economy is in shambles because of the sanctions (which hit a lot harder because of strong ties with western markets) and will never recover. Europe has accelerated its departure from fossil fuels.
Putin has fired some generals and placed the head of the FSB's foreign intelligence branch under house arrest.
How can this be seen other then a total strategic blunder of Putin? Do you really think Xi is looking at this mess and be like "Yeah, give me one of those, too."?
I would like to be as optimistic as you but this seems contrary to the article and the comments in that thread suggesting the sanctions on oil still have not shown their effects, and it has just started to make Europe question its Gas dependency. Departure will take at least a decade if chosen. As stated until then Europe will not be able to really sanction Russia.
That is if you see sanctions as an all or nothing approach. For Europe the approach will have to be to reduce consumption step by step. This is not as glorious as stopping all imports in one day, but it will hurt Russia nevertheless.
Also this process already started before the current crisis. In Germany heat pump sales have been exploding : https://www.waermepumpe.de/fileadmin/_processed_/2/4/csm_Dia... . In Norway the share of electric cars in new cars is at 85% and 16% of the existing fleet is already electric. This starts to become visible in oil consumption for traffic as well: https://www.ssb.no/en/energi-og-industri/olje-og-gass/statis... (although the economic recovery after Covid masks this somewhat).
In all of Europe 10% of all new cars are electric and that share will increase fast.
The article only looks at the supply side of things, but long term the more important part is demand.
These changes won't effect the outcome of the current crisis, but for Russia the coming decade will show what foolish decision this invasion was and future leaders will hopefully think twice about destroying their own country.
> The German natural gas dependency is going to be the strategic blunder of the decade
This has been a problem for decades, plural:
> The year: 1987. The president: Ronald Reagan. The dilemma: What to do about the new gas pipeline that Europe was building to Russia, one of America’s key foreign policy rivals. Blinken’s first book, Ally Versus Ally: America, Europe, and the Siberian Pipeline Crisis, was published by a then-unknown young writer in 1987. But the dilemma it explores bears remarkable similarities to the challenges the Biden administration is about to face when it takes office. In fact, looking at Blinken’s analysis of U.S. foreign policy during the 1980s provides some tantalizing clues as to how he plans to guide American diplomacy if he is confirmed as Biden’s secretary of state.
> The “Siberian pipeline crisis” that formed the subject of Ally Versus Ally has been forgotten by all but specialists.
Yeah, I would agree with that. In my limited observational capacity as a Russian, I would also add that Western notions of Putin being toppled in a popular coup are, while adorable, profoundly facile; the repressive capacity of an autocratic siloviki state is greatly underestimated in this fairy tale. You ain't seen _nothin_ yet.
Whenever I have seen the analysts making hypothesis about a possible coup in Russia, it always was not a popular coup but a 'palace coup' or one orchestrated by some part of siloviki. Popular protests can prevent the state from taking some action, but a full coup seems unlikely, as you state.
Putin until now had managed to carefully play the Russian opinion to be mostly favorable to him, and I just don't see how this can possibly continue once the reality of what is currently happening in Ukraine to their friends and family filters through the propaganda. His own glorification of WW2 over the last decades is going to play against him here, as the pictures of bombed cities are going to raise immediate associations putting in question just who are the real "Nazis" here.
This leaves the repressive option... but this would require levels of repression not seen since Stalin, and we're living in a completely different mediatic landscape.
No way that this doesn't end up in a revolution.
Nor I believe that attempts of going full North Korea with almost completely cut off media and communications would be accepted by the population, or even feasible in practice.
The only thing going for Putin is the indiscriminate nature of economic sanctions, strengthening his "the West wants to destroy Russia" line.
> No way that this doesn't end up in a revolution.
I think you grossly underestimate the sophistication of autocracies, both in their repressive capacity and in their ability to effectively BS their people about the causes of their misery.
Yeah, there's going to be some technoratti in the cities that tune into Western news via VPNs and Telegram or whatever. Who cares? They don't have much say in the setup of modern Russia, or most petro-states.
I agree that's there's no chance of a popular coup anytime soon. Russian intelligence services were able to influence the results of the US election just by buying Facebook ads, leaking hacked DNC emails to WikiLeaks and funding a few extremist voices. Now imagine what they could do by controlling every single media outlet in a country for the two decades Putin has been in power.
There’s no evidence that the rallies scheduled in October 2016 for Philadelphia, Pittsburgh, Allentown, Wilkes-Barre, and Erie ever took place. There were no permit applications filed for the day of the Philly rally, either.
Russia through 100k in facebook ads, and got the typical results, nothing much. Even if they were the best FB ad optimizers in the world how much impact is 100k in an election where the spending was estimated at $2.65 billion dollars?
So you’re saying enough people to swing 20 electors, who weren’t already planning to vote for Trump, went to a Trump rally organized by Russian proxies, and were convinced to vote for him because of this rally?
China is autocratic, but maybe not a dictatorship like Russia. I had the feeling that the CCP has some leverage over Xi, whereas Putin’s power is more concentrated on himself.
Any inner circle of political elites has some leverage over the individual leader, but Putin didn't stay in power for 22 years by failing to understand how to maintain delicate balance among these forces, play them off one another, and in general route all plots and intrigue around himself.
It's wishful thinking to imagine that a lone disgruntled civil servant with a gun is all it takes. If it were that easy, it would have happened a long time ago; autocrats, by their very nature, are always in peril, in that in any given moment there's no shortage of people who ahem, wish them ill.
That's what makes my skin crawl about assessments of other global autocrats in Western media as irrational. This childish way of looking at things makes them into some kind of cartoon villains; the "Mad Mullahs" who run Iran, "Crazy" Kim Jong-un...
These people may be distasteful, however, they are _anything_ but irrational. They are the most eminently rational and sophisticated calculators and political operators on the planet. They wouldn't last two seconds in power if they weren't.
It's the distinction that autocrats are all whining, pathetic losers - they torture their political enemies because they feel justified doing so - but it doesn't make them less dangerous.
On one hand he wanted to "break up nato" and on the other he wanted nato to collectively spend 100s of billions every year to militarize. Broken clocks and politicians who take every side of every argument are right every so often.
Those positions are not mutually exclusive. Rather, it's more of an ultimatum. "Spend more on our collective defense and reduce your dependence on our adversaries, or we'll no longer be allies."
Yeah, exactly. Trump's position on NATO was, as his position on damn near anything else, unintelligible gibberish. There was no constant except a pervasive affectation--colouring his rhetorical posture on everything he ever discussed--that the US was, in some ineffable but profound way, being "screwed".
The only thing I can figure is that it was Tillerson's input as Secretary of State that Trump was passing along. Tillerson, being affiliated with US energy interests, may have wanted to encourage Germany to import more from us or our Middle Eastern allies.
Trouble is, the summit took place in July 2018 and Tillerson was fired by Trump in March. (From Tillerson's Wikipedia article: "... Trump allegedly suggested a tenfold increase in the U.S. nuclear arsenal, which would cost trillions and take centuries. These reports were denied by White House officials and by Trump after which individuals familiar with the meeting told journalists that Tillerson either called Trump a "moron" or a "fucking moron.")
It's not clear why Pompeo would have pushed this particular agenda item, only that Trump likely didn't come up with it on his own.
Russian gas makes up about 10% of Europe’s energy imports. That’s quite a bit, and there are regional and sectoral hotspots. But it’s not impossible to replace.
Plus Russia continues to have an interest in selling he stuff. With all other sources of revenue being cut, it becomes even more important. What may have been 6 % of the budget will easily be 15 %, soon, and they will need every cent to avoid a complete economic collapse.
> Russian gas makes up about 10% of Europe’s energy imports.
But 40% of actual gas imports. Europe can't rebuild all infra overnight to consume other sources of energy instead of gas for many industries, homes heating etc.
I don't think you need much new infra to switch to electrical resistance heating.
Where to get this energy? Turn off bitcoin mining (200 TWh/year) and you probably get enough energy to replace the heat lost from stopping German imports of Russian natural gas (40 billion cubic meters/year, 10 kWH per cubic meter = 40 TWh). Don't know how much mining is on the European grid though.
As a bonus electrical resistance heating can work in a single room at a time.
You'd really want to replace the gas heating with heat pump systems rather than resistive heating elements. Resistive heating is ~100% efficient at converting electricity into heat, but a heat pump can do a trick to get above 100% efficiency by not actually trying to convert electricity directly into heat, but instead to move heat around so it stays on one side of a loop.
In nordic countries heat pumps (and good insulation) are more common for heating than gas.
To echo the sibling comment, cold weather air heat pumps work, they get efficiency over resistive heating down to about -25 or -30C, and are widely used in colder climates.
There are also ground and water heat pumps that exploit the
higher ground/water temperature in the winter. There are also utility scale versions of these used in district heating plants.
Yes, but you can build tens of millions of resistance heaters much faster than tens of millions of heat pumps. They're also trivial to install. I was trying to propose something possible, not something ideal.
It is simply not possible with the state of the grid and the electric generation capacity available, you'd have blackouts/brownouts and not enough electricity to actually keep people warm due to the higher power requirements.
Now, you'd still have that problem with heat pumps, because our grid is simply under-sized for it, but just not quite to the same extent.
BitCoin mining seems like a real problem. I was recently in Macedonia, and apparently it’s common there to steal electricity to mine crypto. They are heavily dependent on energy imports, and much of the energy they do have is being siphoned off to crypto. It’s not a good situation.
With average household electricity price in the EU at €0.2134/KWHr (second half 2021), I really wonder how much Bitcoin mining goes on there. The average cost in the US is less than half that, less in many of the southern states.
Switching to electrical heating (even with heat pumps, not resistive) can create considerably different flows on the electricity grid. Considering all the time I hear complaints about electricity being blocked as means for heating in at least some places in Germany, I wonder if they simply haven't found out that their grid can't take it under current setup.
Electric heating is almost immoral in environmental terms. Instead of getting close to 100 % efficiency by burning fossil fuel in place, it is burned in a power plant at 30 % efficiency.
This is changing with increasing solar and wind power, and heating is a flexible load that is useful to stabilize the grid. It as of now it‘s net-negative.
Interestingly, apparently the further the Energiewende goes, the less approval there is for electric heating, including attempts to force removal of storage heaters.
You're vastly underestimating the amount of heat energy produced by this gas. Last I checked, even the most efficient (heat pump) method of producing an equivalent amount of heat just for Germany would require 7x more electrical production than all of Germany's entire grid right now.
So Russia is supplying Germany with approximately 300TWh of thermal energy/yr. Total natural gas usage is in the peta watt hour/yr range for them.
Resistive hearing is (not quite) 100% efficient at the point source, but when adding in transmission losses it’s often more like 90%. High efficiency natural gas heaters are similarly efficient.
Heat pumps can go over unity, so assuming 3x efficiency is not bad. Capex is high though. And if burning natural gas to generate the power, efficiencies aren’t great end to end. Not much better than just burning the gas directly on site.
What makes it worse is that much of this energy needs to be released during winter months when renewables have the toughest time, and if it isn’t available people will freeze to death.
So it needs a high capacity safety multiple, and needs a decent amount of storage. It wouldn’t be a good idea to only have a day or two capacity stored for instance, since a unusual storm or quiet period could mean unexpected emergencies with little time to prepare.
Burning it to convert for electricity isn’t ideal either, as even burning it in a turbine and using very efficient heat pumps has roughly the same end to end efficiency (not counting storage) as just burning it on-site for heat, but dramatically higher capex.
Yes, looking at my comment again I see I wrote 40 x 10 = 40, rather than 400. That's closer to the total energy use of all proof-of-work cryptocurrencies, and not a fifth of Bitcoin alone as I suggested.
Why turn it off (mining)? It is literally electrical resistance heating. Sorry for being glib but maybe it could actually help subsidize the electricity cost.
Because mining rigs aren’t heating houses, they’re heating datacenters. Even if you did want to heat a house with a mining rig, they’re generally going to be mounted on a rack and providing a lot of heat to one room. And making a ton of noise while they do it.
The point of getting off Russian gas is to stop subsidizing genocide. So why support a currency whose main purpose is international money laundering? (Secondary purpose: asset bubbles) It would be counterproductive to the goal to give Russia a bigger way to participate in the global economy through crypto.
Note I mean purpose of cryptocurrency itself from a systems perspective, not the purpose of those who made it.
It has been baffling to me since long before the Russian invasion that Europe would allow itself to be at the mercy of a single man like this. I just don’t understand how this could have been allowed to happen. Now Europe finds itself a party to genocide.
It's not such a mystery. A lot of the policies were decided from a combination of shorter-term political calculus and a rather optimistic view about the harmonising effects of the liberal economic order, globalism, free trade, democracy, interdependence, peace dividends, and other Thomas Friedman things.
It's easy to forget now after a few years of erratic Trump and populist protectionism talk, but it was not long ago at all that was basically conventional wisdom in the US, too.
I’m can buy a certain amount of “liberal economic order” for things like household goods or perhaps putting your energy supply in the hands of a democratic nation, but putting your oil supply in the hands of a dictatorship seemed foolish well before Putin invaded Ukraine.
Trump warned them, and the German delegation laughed in his face. He claims he gave a gift of a white flag to Merkel to waive in surrender to the Russians after negotiations to block the Nord pipeline fell through.
But, Trump wasn't alone in thinking this way. In the 2012 election, Romney called Russia the USA's number 1 geopolitical foe, and Obama laughed it off.
Meanwhile, several high profile poisonings, siding with Assad in Syria, behind the scenes antagonising in Iran, etc. all made one thing abundantly clear: Putin is no friend of "Western liberal economic order", and the uneasy truce was not in any way guaranteed to last. If nothing else, putting all of your eggs in one basket and hoping he played nicely with your natural gas supply was the sort of foolishness that shouldn't be given positions of power.
Eastern Europe already knew about this - hence one of the first LNG terminals in the world, conversion from burning oil to biomass for heating, power links to nordics. So much resistance and criticism back then, quiet now.
That’s a wild gamble with the lives of your populace. It’s one thing to build an interdependence on a democratic country and quite another to put the fate of a continent in the hands of a single dictator.
Isn't that similar to what the US did with China? The interdependence is maybe not at the same strategic level but it is still significant, wouldn't overnight interruption of any import from China be very painful both to US consumers and industries?
The “strategic” bit is key. The US doesn’t get food or energy from China (although our economy is deeply intertwined at this point), but it does provide a lot of food to China. Even still, I wish the US did less to aid and abet China.
The supply chain situation was global and for Americans it largely amounted to an inconvenience. People weren’t freezing for lack of energy to heat their homes. America should do more to decouple itself from China, but it isn’t the same as Europe’s dependence on Russia.
Edit: I don't mean for this to sound ad hominem or overly pointed, but I've been shocked a lot lately--in the context of all these boycott discussions and so forth--by a widespread lack of basic energy density literacy.
I'm no physicist myself, but I think the world could use a fast lesson in just how much energy is stored in oil and gas, and in concepts like EROEI. Without it, it's very hard to put the relative quantities in perspective and understand why it's so difficult to eliminate, substitute or reduce fossil fuel use, or why ramping up production or retooling for different inputs is something that happens more in decade time-scales than weeks or months...
As sibling comments have intimated, the amount of power required even for a midsize city vs. what a small nuclear reactor on an aircraft carrier could provide is just stupefying. It's a microscopic contribution. Moreover, the energy in a single 42 gal barrel of refined oil (~5.8 million BTUs) is enormous. Matching that in any kind of reasonable way is not impossible, but it's an insanely difficult problem with no quick or easy solutions.
They could, but not in enough to help the continent as a whole. A nuke carrier could power a small city, but there are only 11 of them, and most of them are kinda tied up right now…
Also, powering 11 small port cities wouldn’t make a dent in the overall energy needs for an entire continent.
tl;dr about 5%, if you take very conservative values.
I decided to do the maths at a very basic level. Nimitz class carriers produce about 1100MWth between their two reactors. Gerald R. Ford classes put out about 1400. There's 10 of the former and 1 of the latter. This gives a total generation of 12400MWth accross them all, assuming you could some how take their entire thermal generation and make it offboarded electricity.
1 Barrel of Oil Equivalent is 1.7MWh, thus you need 14.12 barrels per day to generate 1MW constantly. According to the OP article, Russian exports to OECD Europe are about 3 million barrels per day, or about 212500 MW/day.
For the love of Pete can we stop with the BTU and go kwH like real scientists.. we haven't heated a 1lb mass of water with purified horse lard since candela really meant candles.
Mostly because our time units are still kind of wonky. Unless we went to a metric time system, it's way more convenient to leave our denominator time unit for power generation in hours than to multiply by 3600 hours/second to get kilojoules.
> According to industry reports, Chinese and other Asian buyers are not yet considering new Russian crude oil purchases. Like the rest of the world, China is evaluating its exposure to Russia in the aftermath of global condemnation of the Ukrainian invasion. They’re approaching the newly-sanctioned Russia with a degree of conservatism. As of today, it is not eager to deepen commercial linkages to Russian crude.
Is this actually the case? If buyers in China and India don't need the oil today, wouldn't they be waiting until the seller is more desperate and they can purchase at a bigger discount? They would only be buying now if their stocks are low or if they think their negotiating power will be weaker tomorrow.
But a month from now their storage will be full so they could be a lot more desperate. Full storage was one of the factors for the negative oil prices some time ago happening in the US.
https://berthub.eu/gazmon/ generates nice charts of Russian gas flows to Europe, based on data from ENTSOG (European Network of Transmission System Operators for Gas).
Off-topic critique: what is this, graph porn? There are a lot of unnecessary graphs in there, the first graph doesn't add anything because, wow, historic look at how much Russia produced, you've already written the current number, who cares what it looked like over the last 20 years. The pie chart of where the oil is exported may be relevant, but do we really need to go into such detail? The first relevant graph to the article is the price spike caused by the invasion/sanctions.
Terrible presentation when the reader has to think "what is the significance of this graphic?" with sooo many of them. But hey, looks impressive at first glance and if this were high school it'd fill the minimum page requirements.
Was this 3,000 word article written by GPT-3 by any chance? The jargon is impenetrable.
Supply is being forced offline.
Russia shut-ins likely.
Not quite at “no-bid” levels yet, Urals discount of $30/bbl to Brent is a marked hit relative to historical levels.
Demand is the governor and for now, demand is holding in.
The author(s) use "we think," "we expect," etc. as if they are a team of analysts, but the writing style is a step above Q Anon. As they published pseudonymously it is difficult for me to evaluate whether to take them seriously or not.
I have only very-basic understanding of energy markets, but the jargon is fine to me, and pretty standard economic/energy speak.
- Supply is being forced offline.
Oil/Gas production is being forced to stop.
- Russia shut-ins likely.
"Shut-Ins" is when the well production needs to be stopped. Sometimes (especially for fracking) this means the well can not restart.
- Not quite at “no-bid” levels yet, Urals discount of $30/bbl to Brent is a marked hit relative to historical levels.
Just standard economic bid/ask commodity market talk. Commodities are basically sold at auction. "No Bid" means nobody is offering to buy it, no matter what the price.
- Demand is the governor and for now, demand is holding in.
Governor as in "in control of the process". I don't know what "Holding In" means but I would guess from context: "not buying"
I've never seen a take on this that seemed plausible and logical. I thought I was going to be pleasantly surprised by this one as it got very technical at the start but it kind of went weird at the end.
So, for oil they think the sanctions will remain and Asia can only take so much and will do so at a discount. At some point Russia will run out of storage and have to stop producing.
This feels like bad news for Russia. Though later on they claim Russia can cut off gas because it's only 6%, but we just covered how 30% of their revenue is about to hit a wall. Can they survive another 6% cut on top of that? Plus increased retaliatory sanctions? While continuing an expensive, unpopular and unsuccessful war?
For gas, they specifically say that there's not enough gas to fill current demand AND fill the storage tanks to a EU mandated 90%.
Let's assume that's true. Does EU need the storage tanks to be 90% full or is that a nice to have? If other countries are making a concerted effort to lower their storage to ease price spikes, then it seems likely the EU could too.
So, how much damage can Russia actually do by cutting off gas, how much does that damage Russia and what's the chance of that happening? Why does this article not even try to ask or answer that question?
Is there anything that can't be solved by printing money and/or windfall taxing it back from people who profit from this situation and using it to electrify? If not why not? If so, then why aren't we doing that?
And why is this generally seen as so impossible it's not worth considering? The whole world has a 25 year plan to phase this stuff out so it seems a bit odd that cutting down a bit at short notice is seen as such a complete non-starter. "Heat pumps for peace" seems like a very logical plan for American manufacturing, so why is it not being put into practice?
Maybe it's the control that our own fossil oligarchs have on our politics which is the big weakness here, if we're not even able to talk about solutions which might inconvenience them, but save us money but we are keen to scaremonger their profits.
If we had 10 years warning and a slow drop off. Most uses of oil can't actually swtich to anything else without expensive rebuilding '
If conservation gets you anywhere why weren't you doing it before? There is a lot of room for insulation that was already cost effective at last years prices, so I doubt those who could do it will.
So we only need half of what we saved when states went into complete lockdown and travel basically ceased existing? That's not a very positive outlook.
That's very selective reading. Here's what the article says:
> The unprecedented collapse in worldwide mobility as a result of lockdowns and travel restrictions in March and April 2020 slashed oil demand by over 20 million b/d, or 20% of total demand.
So the 20% drop was temporary, during the most strict lockdown months. Extrapolating that to longer-term periods is obviously a mistake.
> We expect about 75% or 6.3 million b/d of demand to come back in 2021
So the demand would be down by 5% (25% of 20%), YOY. No predictions as to how much it could come back in 2022.
The graph a little bit further down the article predicts oil demand to keep going up at least until 2035, and 2040 for all oil products.
Green Hydrogen can be blended with natural gas up to approximately 20/80 ratios. That can certainly address some or most of the shortfall, but probably at a measurable increase in price.
Spring is here, Europe has reserves... if there is ever a good time for a continental energy crisis, it is now.
Weighing an energy crisis in Europe against a prolonged war in Ukraine I think most europeans will agree with me that the energy crisis is the preferred option.
We actually don't have a lot of reserves due to a mix of pissing of Russians (at mid/end '21) and massive speculation.
> Weighing an energy crisis in Europe against a prolonged war in Ukraine I think most europeans will agree with me that the energy crisis is the preferred option.
Lower class people and even lower middle class people are already hurting. I can handle a surprise increase in heating costs and a jump in gas prices, but people who need to drive to work daily aren't that lucky (and, to make matters worse, the government just reduced the home office incentives in Germany).
Once prices hit serious peaks (doubling and up) or actual supply issues appear, support will fade very quickly,even in the privileged classes.
Europeans really don’t want war on their continent. There are options which the governments can employ. Governments can offer free public transit, they can mandate remote work, they can mandate worker pick-ups for large workplaces, etc. There are a lot of inefficiencies in Europe’s energy uses, and during an energy crisis these inefficiencies will have to be tackled no matter the cost. And Europe does have the money to pay for these. Will it be inconvenient? Yes. Will it be devastating, probably not nearly as devastating as the war in Ukraine.
I stand by what I said. Europe really doesn’t want this war, and I bet most people are willing to suffer an energy crisis with the hope that it will stop earlier. And if governments fail to offer remedies during the energy crisis, it is on them and they will suffer in the polls.
> I bet most people are willing to suffer an energy crisis with the hope that it will stop earlier.
and yet, the war is not really contingent on people suffering this energy crisis - it's merely a possibility. Putin can still wage the war and the only true response europe can have is to wage war in return.
War in response to putin will be even harder to swallow after the people have suffered a year of energy rationing i reckon. When your house is cold and food scarce, the people in europe is more likely to be willing to accept appeasement.
Appeasement. The very word conjures up images of brave resistance. Maybe I'm older but I imagine that Europeans have strong cultural memory of just how bad a strategy appeasing dictators is.
Putting up with pain at the gas pump is different to having your children conscripted and sent to die in a far off frozen land.
There is no such thing as "war in return", only global nuclear annihilation - if war in return was a possibility, EU armies would already be engaging Russia in Ukraine.
There is "war in return". It is far from certain that Putin is willing to start nuclear war. In my view, it is unlikely that he would use nuclear weapons. And if he is willing to use them he will use them because he is loosing in Ukraine, without regard as to why is he loosing in Ukraine.
Biggest thing everyone can do on a personal level right now is get more energy efficient to reduce demand
For example we saw a significant drop in electricity consumption when we moved from CFL to LED bulbs
Not everyone can afford efficiency measures so governments will need to subsidise them - particularly in the UK where the housing stock needs huge improvements (though that depends on a Conservative government doing the right thing)
Industrial energy consumption is another challenge though
It's important to see that there's no real near-distance endgame ("off ramp") for Putin politically; he's in a position from which he cannot retreat.
That makes an economic bet quite a bold one. If Russia's polity were that sensitive to economic fluctuations, the war would have most likely never got started...
There is no off ramp for Putin, but getting rid of him is an off ramp for everyone else. The question is if there are still structures in Russia able to do that.
Which is an assumption that devastating the Russian economy will either force Putin to withdraw or result in his removal from power. Biden told US reporters that we have to wait a month to see whether sanctions were working, because there's no guarantee it will have the desired effect on Moscow.
How much coal has Germany turned off that it could bite down are hard and restart? How much oil can come from North Sea deposits and nuclear? Sometimes, being cold beats being owned.
This is a very interesting topic to me in a historical sense, because German chemists invented the first processes for turning coal into synthetic liquid/gaseous fuels, and the Nazi war effort ran on synthetic coal-derived fuels:
Even USA thought this technology was interesting enough to import the relevant Nazi scientists as part of Operation Paperclip, experimenting with it until the program was shut down in 1985: https://en.wikipedia.org/wiki/Synthetic_Liquid_Fuels_Program
No country can. It doesn't help that there is a backdrop of shortages of literally everything. From the people necessary to operate, to the metal used for pipes and casings.
It's comical just how self-destructive ESG has been.
> Like the rest of the world, China is evaluating its exposure to Russia in the aftermath of global condemnation of the Ukrainian invasion. They’re approaching the newly-sanctioned Russia with a degree of conservatism. As of today, it is not eager to deepen commercial linkages to Russian crude.
This assessment may be out-of-date considering that as of today its been revealed that China has already firmly committed to providing material and logistical support to Russia in Ukraine. Not only does it reinforce China's apparent resolve and risk appetite, it's the second time in a week the Western alliance has been caught flat-footed (the first was the MiG-29 transfer debacle), necessitating a significant compensating move to restore pressure.
Stars keep aligning in all the wrong ways. Arguably the world's major powers haven't been so squarely aligned in opposition to each other since the Korean War. It seems we now have Europe, the Anglosphere, and Japan against Russia and China.
I doubt incompetence from the Polish government was all that unexpected by the other members of NATO. Nor would I consider worldwide banking sanctions within a week “flat-footed”. I do agree we live in interesting times, and perhaps the the great Chthulhu will be joining us shortly.
From what I've read the fumble was the result of a difference of opinion and poor communication between the U.S. State Department (more aggressive) and the Pentagon (more risk averse). Poland just got caught in the middle.
EDIT: The second instance of being flat-footed I was referring to was entering intense diplomatic dialogue with China in an attempt to get them to avoid making any concrete commitments, and then discovering (based on direct and indirect feedback during talks) that China is already much further down that road than we assumed.
Poor communication on the US side wouldn’t explain Poland’s “we are sending expensive war materiel via this specific location (Rus pls don’t intercept lol XD)” announcement.
That only adds to the mess. The bigger unforced error is the apparent U.S. waffling. Firm, consistent messaging regarding refusal (so far) to send jets would have been far more powerful than what ended up happening.
> Europe, the Anglosphere, and Japan against Russia and China.
Don't forget Venezuela, Cuba, Iran, North Korea, Syria, Belarus, and a couple of 'stans. Fiona Hill is right: World War III has already started, we just haven't accepted it yet.
I would be surprised if the Chinese aid to Russia were anything but symbolic. The continuation of this war and the tensions with the West are not in the Chinese interest.
Or we could take both the intelligence reports and China's pronouncements at face value. COVID-19 has already tremendously disrupted trade, and Trump's earlier trade war helped reveal both the extent and the cost of reduced trade flows. China could easily have come to the assessment, in light of both situations, that the U.S. has much more to lose than does China, especially while China is still in the midst of COVID-19 self-isolation. They may simply have decided to call our bluff, just like they did with Trump. (This is the risk with flippantly showing all your cards.) Similarly, a world economic order with a diminished US dollar is to China's advantage, so China may see this as a potentially favorable strategic inflection point.
Either way, it all just adds more kindling. The momentum is definitely building in the wrong direction, which sadly has been the consistent pattern over the past 3 weeks.
1. Public Transit options (bus, tram, subway, rail) are all available in the USA. Yeah, it "sucks" but there's a bus route for all corners in the USA... and some cities have more advanced options.
2. Public Transport itself can use alternative fuels: Ethanol, Biodiesel, Electric, Hydrogen, Nat Gas. Transitioning a bus from crude oil/diesel into (whatever) will affect dozens, or even hundreds, of people. Especially if we work to fill up our busses for this incoming wave.
3. Some counties / states may not have the resources to transition public transport to alternative-fuels. That is okay, we don't need to reduce all of our oil consumption, just enough to "survive" until the long-term solutions exist.
4. FlexFuel (aka: 85% ethanol fuel), Hybrid, PHEV, and Electric cars exist as individual options. Pushing the standard from E10 (10% Ethanol) to E15 or E20 could very well handle the rest of the impending oil-crisis. All cars built since 2001 are designed to handle at least E15.
5. Carpooling. A car with 5 people in it is basically as efficient as a 30-person bus. If you can't use public transit, create efficiencies by pooling cars together.
Transportation is one of the biggest users of energy consumption in the USA (https://www.eia.gov/totalenergy/data/monthly/pdf/sec2_3.pdf), and IIRC, a significant amount of our transportation-energy is simply cars carrying just a single-person.
---------
Natural Gas seems more difficult, but in the USA Nat-Gas is basically domestic. This will be a bigger issue for our European friends across the Atlantic.
I'm sorry, but this seems plainly counterfactual in view of the low-density, automobile-exclusive nature of much of suburban and rural Middle America. There's literally not a bus route in most of the USA, let alone "all corners".
Fortunately, rural Middle America doesn't have huge amounts of traffic. So a bus isn't needed in those locations either.
If you have a bus route available, really consider it. I don't think this oil-crisis is avoidable. Even if Russia retreats from Ukraine tomorrow, the long-term effects of these sanctions will propagate through the market.
My daily commute is from Palo Alto to Cupertino. I'd say that does not count as "rural middle America".
Just now I opened Google maps to find me a way to work using public transit.
As a baseline, it takes me 16 minutes in my car.
Option 1) drive 11 minutes to the train station. Ride the train 3 stops, get off at mountain view and get a lyft for 8 minutes. Total travel time: 47 minutes. (note this is basically all car, so a non starter in reducing gasoline use)
Option 2) basically the same thing but replace the train with the 22 bus instead. Total travel time: 57 minutes. (again, practically all car)
Option 3..n) walk 19 minutes to catch the 21 bus, ride to mountain view, switch to the 51, ride to practically the doorstep at work. Total travel time: 100+ minutes. And I arrive an hour early.
In summary, VTA has failed me, and I'd like to say most of the people in the north part of Santa Clara county. But the reality is, many of them actually like it this way so it's harder for the rifraff from San Jose to get here. We still pay the same taxes into the system, we just don't have it up here.
> Option 3..n) walk 19 minutes to catch the 21 bus, ride to mountain view, switch to the 51, ride to practically the doorstep at work. Total travel time: 100+ minutes. And I arrive an hour early.
How far away is the drive to the Mountain View / 51 bus? Is it an option to drive to that bus, then bus to the doorstep of your work?
If gasoline reaches $6, $7, $8, $9 or $10/gallon, would it be economical for you to use this route? Is there a convenient parking lot where you can park all-day at reasonable costs (or for free)?
It's 11 minutes to Mountain View by car. There is of course no free parking because it's downtown. Then it's an additional 25 minutes on the 51 bus.
This isn't a situation where good is being passed up waiting for perfect. It's utterly terrible being passed up for bad but workable.
This plan saves me a fraction of a gallon. The cost of parking alone already eats many times the savings. And this still doesn't cover what 20 minutes of my time is worth. Admittedly, time spent as a passenger is better spent than as a driver.
Surely there's something to do downtown in your daily life that can spread out the costs though?
I don't know your neighborhood, but even just a Trader's Joe (or other grocery store) near the parking spot would integrate your work-day into a grocery-run, or other such regular activity.
If this isn't a regular enough occurance, its still a benefit to do it once or twice a week, as you need. If not all the time, then you start thinking about how you can use mass transit at least some of the time.
Home -> Mall -> Work -> Mall -> Buy Groceries -> Home. Or maybe gym activities, or whatnot.
I don't know what exists in that commercial area, but in my experience, there tend to be lots of things to do around bus stops.
This pin is to the transit center. To the south southwest is the business district. Nearly ALL of it is restaurants and bars. It's honestly impressive how 4 city blocks are basically one giant food court. But I thought the point of this was to save money, not spend way too much eating out every night.
There is a CVS a few blocks away, but let's be honest, I'm going to do my shopping at my local store in Palo Alto a mere 10 minute walk from my house. I'm not planning an excursion to DTMV to shop at the one store.
As for the rest of the time, the main thing I like to do for fun/excersize is go hiking in the hills around here. The number of trailheads that have transit to them is so vanishingly small it might as well not exist.
I'm seeing a free-parking lot (with EV-chargers to boot), "Ava's Downtown Market & Deli", a barber shop.
Those three things alone are sufficient to make one bus-trip from this location per week worthwile (free parking near a bus-stop that takes you to the doorsteps of work). At least, whenever you get your hair cut, and whenever you need to buy more higher-quality salami/cheese from the Deli for your home sandwich preparations (and whatever else that market keeps in stock).
I don't live there. I don't know everything that Mountain View has to offer. Maybe there's something else there that's worthwhile for lifestyle: a gym, workout center, arcade, bookstore/library, etc. etc. I think I see a dance center (maybe you're not a dancer), but that suggests that some kind of workout culture is in the area, so maybe there is a gym there that matches your activity style (or maybe you can learn dance as your activity to take advantage of that location)
--------
So already, the home -> free mountain view parking lot -> bus -> work -> bus -> parking lot -> home trip seems to have been proven reasonable.
There's also a CVS on that bus-route, and seems to be walking-distance from the free parking lot as well for other lifestyle shopping needs. This doesn't seem unreasonable to me at all.
There's also the occasional needs items: the post office and a few banks.
The lot by the train tracks is 5.50 a day. So ~one gallon of gas.
There is actually a bookstore and a library. I even have a library card here, though I almost always use the Palo Alto library system instead.
There's also a lock museum attached to a locksmith shop.
I'm not saying there is no reason to ever visit. I'm saying it doesn't make sense to go every day.
But I'm coming around to your suggestion to designate just one day a week as "screw around on the bus before and after work" day. I'll try it tomorrow if I can get myself out the door early enough.
I don't think it makes sense "every day" for me either, but once-a-week is where I've found myself at too. Free parking all day at my location though, so its a bit different.
I'm estimating that I'll cut out ~15% of my gasoline usage with just once-a-week bus trips, since the bus-stop is closer to my house than work. At $2 per way, I'm barely profitable, my personal vehicle is too efficient, lol.
> The lot by the train tracks is 5.50 a day. So ~one gallon of gas.
Yeah, I can see how parking costs makes such a proposition much worse.
Something to consider: a lot of your vehicle costs are per-mile. Tire usage is another 1cent or 2-cents per mile, depending on your tire's costs and durability.
Oil-changes are really cheap, but other items can get costly, suspension, depreciation, etc. etc. And a lot of these items "wear out per mile". Adding those items on top of the gasoline costs (maybe 12-cents per mile gasoline + 10-cents per mile other costs) makes the number of miles you need to travel a bit less than you might expect to break even.
---------
Also remember: this topic is largely about Russia's oil being sanctioned off. The target is a 7% reduction (equal to Russia's current share of our petroleum usage), at least here in the USA.
Once a week is good enough, as far as this topic is concerned.
Hopefully you find a reasonable plan for the once-a-week bus idea!
People won’t like it this way for very long once the gas prices are up 30%. At which point California and the Federal government will have to step in and rectify this situation. The easiest solution would be to mandate worker pickups and to massively increase the bus network and frequency. The Bay area certainly has the density to justify massive bus subsidies if it means saving fuel during an energy crisis.
Oddly enough School Busses do cover almost every address in the US, which demonstrates such a network isn’t inherently difficult to build. Rather automobiles are just really convenient in low density areas.
For two trips a day; they're effectively charter buses. And a lot of them take very long, circuitous journeys; my kid's bus comes at 6:45 AM, long before school starts!
Now make them run every 10-15 minutes so anyone can get anywhere any time, also add a bunch of transfer points and intermodal nodes...
It’s normally 4 cycles a day. 2 for high school kids and 2 for elementary school kids. That’s why some of the circuits are so long they don’t pick up kids at a large fraction of houses they pass buy. Busses close to the school then do multiple routes because they can fill up so quickly.
It should be obvious how that same basic model could get someone from any location to any location in a county twice a day. It would just be really inconvenient compared to cars.
My high-school only had 2000 students, and elementary/middle school had only a fraction of that.
Surely a lot of us work on campuses / office complexes that have more than 2000 office workers?
If we have bus systems that can effectively serve ~500 person elementary schools or ~300 person elementary schools, surely we can serve a 5000-person office complex with some kind of mass-transit option?
This creates an interesting work model: drive to work via company bus in the morning, drive home via company bus in the evening, just leave your laptop on the bus. Travel time counts as work time. Same route twice a day, so everybody works the same length.
The public transit in my city is an absolute joke. My 17 minute commute to my previous place of work was optimistically 90 minutes, but it could be double that if one of several connecting buses was late or early.
This is getting to work. Leaving work my trip was anywhere from 20~45 minutes. I doubt I’d make it home in less than 2 hours on a bus.
In my experience, the "bus" system and "train" systems work incredibly well with your car in my area at least. None of us are selling our cars in the next 3 months or 6 months (unless we really plan to buy a new car).
Instead, we should be looking for the best combination bus + car route to get to-and-from work each day. Especially when you consider carpool options, a group of people carpooling to the bus / train can grossly improve efficiencies.
Imagine fitting 5 people in an suv to last mile delivery a few times a week. The burden on your vehicle and the other peoples vehicle drops off dramatically. Your fuel costs drop dramatically. The only issue(a big one) is avoiding sitting in a car with a psycopath or two multiple times a week.
E15 to 20 is gonna be ultra rough on a lot of engines! My car would perform extremely poorly on it, and the ethanol is lower energy density and expensive to produce. The US is finding out the ethanol program isn't really a gain. Not sure of the loss and hopefully it's minor.
Ethanol has a higher octane rating. IIRC, the main issue with Ethanol is corrosion, not performance. Your _engine_ will love the stuff.
The tank / seals / gaskets on the other hand... that's the problem.
> and the ethanol is lower energy density and expensive to produce.
So? Its an alternative fuel. If gasoline becomes $10 a gallon, then we use more Ethanol. The idea is to have a plan for the incoming oil shock.
If gasoline becomes more expensive, then ethanol almost certainly will become a better idea, especially because (when mixed with Gasoline), most car engines can use it.
As alternative sure. But we won't be making a performance argument as well. And it is hard on top soil. Maybe easier if we use things other than corn.
I rebutted the performance claims, and did so based on energy density and engine difficulty. Many will be dealing with those two things, with the latter being more important.
There is no need to oversell. People will deal with the fuel because they need to. Engines won't love the stuff, unless their ECMs are setup to deal with the lower performance per unit of fuel. Then they will work, but not optimally.
Drivers will notice their car is not as peppy.
Source: I have driven on high percentage ethanol. One of my vehicles does OK. The fuel is not recommended for the other one. It may need an additive.
> I rebutted the performance claims, and did so based on energy density and engine difficulty. Many will be dealing with those two things, with the latter being more important.
Literally race cars use Ethanol because it has 100+ Octane (depending on the mixture level with gasoline). Its an incredible octane booster and improves performance of the fuel.
The main issue is that most engines aren't designed to have the significantly higher compression that ethanol blends have. But if we're talking raw performance, its actually a good fuel.
E85 in particular is rated ~100 octane to ~105 octane.
----------
Yes, ethanol may require more fuel per cycle, but almost all computers built in the last two decades have those computers that can compensate for it.
In any case, there's a large number of "FlexFuel" vehicles out there: Ford Focus, Fusion, Chevrolet Malibu, F150, etc. etc. These vehicles don't only take E15 blends, but are designed to safely run E85 blends. Right there is an 89% reduction on gasoline usage (from E10 to E85).
Mostly Ford and GM vehicles yes. But there's plenty of those vehicles around. I bet that most people who drive these cars don't even realize that they have an 89% reduction on gasoline fuel available.
The issue is that E85 costs more. Its cheaper per-gallon, but its more expensive per mile because of that energy density thing.
Yeah and the race car people don't care about a lot of things people who use and build ordinary cars do. In a normal car it's not going to perform as well.
Which goes back to we're not going to be making a performance argument. People don't drive race cars.
Regarding your comments about the flex fuel cars, yeah they will do well on the fuel. I think it's Brazil that runs mostly that type of fuel.
Personally, given that we don't use corn which is terrible on the planet and inefficient, using that kind of fuel is a really good idea and has a number of advantages so don't get me wrong.
At this point in time, a lot of drivers and vehicles will be negatively impacted.
> At this point in time, a lot of drivers and vehicles will be negatively impacted.
The impact is inevitable. But now is the time to plan for it.
USA has huge strategic reserves, but they only will last for a few months at the most, and we probably want to keep some reserves open in case things get worse.
The immediate concern is securing a fuel from a "friendly" nation right now. With ~7% of USA's oil coming from Russia and that 7% about to disappear from our markets, we need to come up with an alternative and quickly.
Ethanol is one of the most reasonable, short-term alternatives I can think of. Corn is controversial, but USDA research and Department Of Energy / Argonne National Labs research is clearly in favor of corn-ethanol (with switchgrass / advanced biofuels even better). (A lot of the controversies around corn ethanol are from smaller researchers, no big research group I can see frankly)
> Or... maybe people just use less. 7 percent? Easy.
E10 (current standard) == 90-units of gasoline / petroleum.
E15 == 85-units, or a 5.6% reduction. That's most of that 7% reduction already handled.
E20 == 80-units, or a 12% reduction in gasoline from E10. Done and done.
I'm not trying to oversell anything. It just seems like one of the easiest sources of alternative fuel we got. You're right in that more advanced ethanol exists beyond corn, but those advanced refineries only exist in small numbers.
Realistically speaking, if we are to ramp-up ethanol production in this country, its gonna be corn. The advanced-biofuels are _almost_ ready, but still something that's a year or two away from mass production. (They're done the "research" phase and we're even making millions-of-gallons of cellulosic ethanol per year... but its not the billions we need quite yet)
------
I'm not trying to "oversell corn", I'm just acknowledging that we can't really rely upon adv. biofuel (ex: Switchgrass ethanol) quite yet. I'm optimistic on that front. But if we're talking about solutions that may exist by the time these Russian sanctions hit our economy (ie: once our domestic strategic oil reserves run out), its looking like Corn is the short-term answer.
Ethanol contains less energy per gallon than gasoline, to varying degrees, depending on the volume percentage of ethanol in the blend. Denatured ethanol (98% ethanol) contains about 30% less energy than gasoline per gallon.
> Yeah, it "sucks" but there's a bus route for all corners in the USA
I live in rural America. This is simply not true.
* The bus to the next town over takes 3 hours.
* The town 15 miles north of us has no public transit options. Everything around it is inaccessible via bus as well.
* Going 2.5 hours drive north, the "best" public transit option is 30 hours by bus. I could get half-way across the country in the time it takes me to net 125 miles.
You’re forgetting about the subdivisions. The house where I grew up was about an hour walk through the woods and up many hills from the nearest bus stop, which would take you downtown but to neither of my parents jobs. By car it was just ten minutes to downtown.
Where my dad worked was across from some hotels, and the bus dependent workers there had to run across a six lane highway with no crosswalk then walk along another one with no sidewalks for a mile to reach a bus depot.
Also, bus systems are barely functional right now due to labor shortage. The college town where I am now has a very good (for the South) free bus system, but it’s a tiny town with no suburbs and they are constant cutting service, missing routes, etc due to driver shortage.
Not to mention—if people can’t, or won’t, take the bus to places other than work, retail and service jobs evaporate overnight.
Where did I make the claim that you need to sell your car and go bus-only?
You can drive your car to the bus that drives to your work. The reverse trip (work -> bus -> car -> home) works out the same way.
This model gets you with only one transfer, and your car only partially drives to work, cutting down on your gasoline usage significantly.
Its pretty much how a lot of people I know use the rail / subway stations too. Especially because parking outside the city is far cheaper (usually free) than parking inside the city, so you end up saving significantly on parking prices (even if you spend part of that on subway tickets).
---------
Bonus points: a lot of these "transit hubs" (where many bus-lines meet) are in locations with ample parking and many different bus lines. This makes it feasible to carpool to a transit hub, instead of carpooling to work (my neighbors don't go to my job, but there is a chance that my neighbors will benefit from a carpool to the same transit hub)
I strongly doubt that bus stations have enough parking lot capacity for this model. Ample parking is not scaled to the model where this location has to hold everybody's car while they're at work.
Lol. Are you from Europe? Neither the town I grew up in nor any of its neighbors have any kind of public transit whatsoever. Want to go to court and then go to the library while you wait for your friend to pick you up? (since you can't bring a cell phone) I hope you have a good pair of walking shoes.
The place I currently live (just 8 miles away from the capital of a coastal state) has very dodgy transit. I think it might stop twice every weekday or something like that and just goes strait to the hub downtown. It's completely impractical.
What I want to know is how fast other producers could ramp up production by as much petroleum as Russia was exporting to the West at the start of the invasion.
(I am restricting my question to petroleum because it is much easier to change the destination of an oil tanker than it is to change the destination of natural gas.)
I'm also interested in how quickly the German economy could replace the natural gas they have been getting from Russia with petroleum.
I read the title, and my head-space jumped to empire where BTU stands for Bureaucratic Time Unit. This was a measure of how many actions you could take in a unit amount of time before your capital’s bureaucracy was exhausted; once you have none left, you have to wait for some real time to pass before you can do anything else. This meant that declaring war on another player’s country at the traditional time of 2am their-time still only gave you a limited advantage.
This makes me wonder if the petrodollar system will end soon. It would be trivial for Russia, India, China, and Saudi Arabia to create their own version of CME and list oil futures in terms of a neutral commodity like gold, or even something like BTC.
A lot of countries are nervous about what has happened in Russia, fearing they may be next. Creating an alternative petro system will derisk sanctions, and remove the need to have dollars as the reserve currency.
Read the whole thing. Going long nattie gas as we speak. Seems like the only conclusive thing is to buy all commodities right now. We're only at the beginning.
You’re right that we’re probably only at the beginning. However, commodity trading is a bad idea for most people because it has an “expected value” of zero (unlike stocks and bonds, which have positive average returns). It’s very useful if you’re using it to hedge against increases in the price of commodity you consume.
They either mean commodities long term have 0% real returns, or that the “contango” of holding commodities as an asset means long term the asset's worth becomes 0 (high expense and 0% real return)
If you're going to do that (and beware that it's a way that amateurs can lose their shirts), then think about sequence. Steel, for example, may lag natural gas by some time period (I don't know how much). I guess that food will lag the farthest, but I don't know by how much.
I am not saying definitely that this article has been sponsored by [censored on HN], but there is high probability of it. This is how they operate.
Anyway, there is almost no price that the humanity should not be prepared to pay to stop The Evil. Choose, a little less gadgets, less air travel and a thermostate tuned to 5 degrees lower, or nuclear winter.
It's going to be really interesting to see how things shake out in the coming Fall/Winter if Europe can't immediately ramp up some
L̶N̶G̶ natural gas production or figure out where it's going to buy some. Regardless, I'd prepare for some serious price hikes for L̶N̶G̶ natural gas.
Before the war broke out in Ukraine I had no idea how much Europe depended on Russia for L̶N̶G̶ natural gas, and it's honestly pretty scary considering how much residential heating is dependent upon it. You can survive without gasoline to drive around in your car - but the vast majority of Europeans need heat in the Winter.
I'm imaging some WW2-style "Set your thermostats lower! More than 62 degrees and you're on Putin's side!" propaganda if the conflict continues into late 2022.
1) Petroleum is an input into so many other things besides transportation, and;
2) Transportation is, to varying degrees, a significant variable in most countries' GDP. It's probably most extreme in the US, in terms of the GDP being a linear function heavily rooted in vehicle-miles travelled, but to some extent that's going to apply to any developed country.
So no, you really can't go without gasoline, nor adopt blasé indifference to oil prices. They pervade just about every facet of modern life; plastics are derived from petrochemicals, fertiliser, you name it.
You're absolutely correct. I guess I meant that when push comes to shove and Europe needs to decide what to do with the Petroleum it does have, it can dedicate to energy production and industry essential to function, and limit the amount available to consumers (think gas rations in the 70s), but it's harder to limit natural gas that is used by people to keep them alive in the winter. My fear is not "will the economy in Europe survive a lack of oil?" but is actually "Will Europe have enough natural gas to keep people from freezing in the Winter?" But yes, petroleum is essential as well.
And there's 0 chance any LNG terminals get built as a response to this situation by the next winter - especially in Europe. Building a terminal near here was on the order of a decade with all the planning, and a lot of protesting form people in the region (you are building a port for liquified natural gas after all).
Even if they decide to build additional capacity the last thing you want to do is cut corners.
Also, pipeline capacity to Boston, one of the bigger LNG ports in the east coast was blocked by environmental activists.
Makes me wonder if the post-Fukushima hysteria that inspired German nuclear shutdowns and at least one major US nuclear reactor was influenced from abroad.
I was under that impression as well. But I believe in a form of Efficient Analyst Hypothesis where, if this LNG terminal capacity were in any way significant, it would have surely been mentioned in industry circles and press. ;-)
Amazing analysis. The innocents in Ukraine are suffering and dying immediately but the rest of Europe and the world is going to be suffering too as this drags on.
But since I don't know Russian politics, what happens if for several possible reasons Putin is somehow not in charge in a month, or a year?
Who is in the wings and will they continue their crime against Ukraine or will they bring everyone home?
I've been trying to build a consumer side rationing movement for these exact reasons. It won't solve all of the problems but every bit helps, the grid and natural gas system operators can only do so much prep, the increasing purchases of Russian gas products in the last couple of years obviously misjudged the likelihood of Putin doing something like this invasion. As this article points out in painstaking detail, the West as a whole has a real weak spot in our leverage against Russia and we do have the power to try to help.
> Russia’s oil sales are 30% of the country’s revenues, but the gas market is only 6% of the state’s budget. A total loss of Russian volumes into Europe would be catastrophic. As in - industrial shutdowns, blackouts, hypothermia catastrophic.
> The one-sided balance of power with respect to natural gas leads us to expect that Europe will not sanction gas, but Russia will hold its volumes as a sword of Damocles over the continent to extract maximum value from its position. Just like it did last Monday.
That's certainly illuminating, and, from the point of view of geopolitical mercantilism, alarming!