There are not enough BTUs

https://viscosityredux.substack.com/p/there-are-not-enough-btus

by lxm • 4 years ago

152 235 4 years ago

viscosityredux.substack.com

anonu2• 4 years ago

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.

elil17• 4 years ago

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.

anonu2• 4 years ago

EV of 0? Are you assuming you're leveraged 50 to 1?

AnimalMuppet• 4 years ago

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.

cinntaile• 4 years ago

The easiest is probably to just buy a fund with all commodities, then you don't have to figure any of that out.

melling3• 4 years ago

Do we need to replace all the fossil fuels from Russia?

Conservation, electrification, etc. LNG from the US

100 million barrels of oil globally can’t be reduced to 95 million?

Coal generated electricity from Poland? Horrible but necessary

twofornone• 4 years ago

Overnight? Not a chance.

runarberg4• 4 years ago

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.

bluGill• 4 years ago

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.

melling3• 4 years ago

Oil usage during Covid dropped significantly. This article says 20%

https://www.spglobal.com/en/research-insights/featured/movin...

And we only need to cut 5-10% globally

darksaints2• 4 years ago

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.

fulafel3• 4 years ago

Switching away from oil is less expensive than the climate disaster of not switching away. Plus it generates a lot of new economic activity.

(There's already a broad policy consensus about this, see the Paris Agreement)

dcchambers3• 4 years ago

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.

martinald• 4 years ago

LNG is not the same as natural gas. Europe doesn't get its natural gas from Russia in LNG form, it's just normal gas pipeline.

LNG is used to ship natural gas on boats, basically.

dcchambers3• 4 years ago

Right, corrected!

moonchrome• 4 years ago

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.

abalashov24• 4 years ago

Well...

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.

And petrostates like Russia know it.

dcchambers3• 4 years ago

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.

eddyg• 4 years ago

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).

abalashov24• 4 years ago

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!

XorNot2• 4 years ago

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.

abalashov24• 4 years ago

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.

tonmoy• 4 years ago

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.

pcwalton• 4 years ago

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.

toast0• 4 years ago

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.

simulate-me3• 4 years ago

One of the reasons that Trump wanted to break up NATO was specifically related to Germany's reliance on Russian gas: https://www.reuters.com/article/us-nato-summit-pipeline/trum...

ripper1138• 4 years ago

Xi is far from unassailable. Wouldn’t be a surprise at all if someone else in the party wins support for the next term.

_0ffh• 4 years ago

Xi's position is too unassailable right now

I don't think he's quite there yet. If the 20th party congress later this year goes according to plan for him, he will be though.

radu_floricica• 4 years ago

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.

nmehner2• 4 years ago

Do you really think so?

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."?

throw0101a• 4 years ago

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.

* https://foreignpolicy.com/2020/12/03/blinken-secretary-state...

* https://archive.ph/I6Ytj

* https://en.wikipedia.org/wiki/Urengoy–Pomary–Uzhhorod_pipeli...

KarlKemp2• 4 years ago

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.

abalashov24• 4 years ago

I wish I shared your optimism. But this 10% "energy imports" figure makes it seem like "energy" of all kinds is fungible...

riku_iki2• 4 years ago

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.

PaulDavisThe1st2• 4 years ago

But it’s not impossible to replace.

TFA says (and argues quite persuasively) that it is impossible to replace, at least with other gas.

908B64B1972• 4 years ago

I have to wonder if US nuclear aircraft carriers could help supplying power to Europe.

stjohnswarts• 4 years ago

Wouldn't even put a dent in it. Or are you joking?

djrogers2• 4 years ago

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.

labster4• 4 years ago

They’d help in the same way a raindrop helps to fill a pond. Maybe if the US sends a few hundred nuclear aircraft carriers to Europe it would help.

abalashov24• 4 years ago

Yeah... the numbers on that... not so much.

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.

NamTaf• 4 years ago

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.

throwaway8943455• 4 years ago

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.

dzhiurgis2• 4 years ago

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.

abalashov24• 4 years ago

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.

NickNameNick• 4 years ago

They thought they could make Russia dependent on their money, and thus encourage russia to integrate with the EU.

netsharc• 4 years ago

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.

mrlinx• 4 years ago

well, they add to the credibility of what's being said. harder to fake.

gruez• 4 years ago

Reminds me of wtfhappenedin1971, although this is arguably less bad because it at least has some prose

dangom• 4 years ago

Actually gives a lot of context for someone not familiar with the topic/data. I learned more from the plots than from the prose.

galacticaactual• 4 years ago

Need a Commando 8.

whatever1• 4 years ago

Oh well when we were warning about this we were the fearmongers.

Good luck ramping up by 5x now solar, wind and nuclear in 6 months.

goatlover2• 4 years ago

Germany would rather import fossil fuels from almost anywhere than ramp their nuclear power back up.

p_l4• 4 years ago

Still wouldn't help them because of how heating is structured in the country.

Now, massive upgrades to thermoisolation of homes could be pushed, if there was political will.

jleyank• 4 years ago

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.

Lammy• 4 years ago

Relevant: "German Hard-Coal Production to Cease by 2018" (2007) https://www.washingtonpost.com/wp-dyn/content/article/2007/0...

I like the monument they built over the final active Saarland coal mine: https://en.wikipedia.org/wiki/Saar_Polygon

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:

- https://en.wikipedia.org/wiki/Fischer%E2%80%93Tropsch_proces...

- "Coal liquefaction was an important part of Adolf Hitler's four-year plan of 1936, and became an integral part of German industry during World War II." https://en.wikipedia.org/wiki/Coal_liquefaction#Historical_b...

France considered it a big enough deal that they occupied the coal-rich western area of Germany after both world wars:

- https://en.wikipedia.org/wiki/Territory_of_the_Saar_Basin

- https://en.wikipedia.org/wiki/1935_Saar_status_referendum

- https://en.wikipedia.org/wiki/Saar_Protectorate

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

dragontamer15• 4 years ago

The travel-related things can be solved.

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.

protomyth• 4 years ago

but there's a bus route for all corners in the USA...

This is just plain false. The USA is way too big and has a lot of rural area that are not served by public transit of any sort.

abalashov24• 4 years ago

there's a bus route for all corners in the USA

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".

dragontamer15• 4 years ago

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.

Retric2• 4 years ago

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.

idontwantthis• 4 years ago

I thought he meant long distance buses. https://www.greyhound.com/-/media/greyhound/images/discover/...

Can get to basically every metro area by bus in America. From there you'd need to get someone to drive you to your final destination.

gameswithgo• 4 years ago

flex fuel is a net energy loser

SkyPuncher• 4 years ago

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.

moltke• 4 years ago

there's a bus route for all corners in the USA.

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.

kayodelycaon• 4 years ago

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.

dragontamer15• 4 years ago

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.

tjr225• 4 years ago

Did you miss the carpooling part of the post?

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.

ddingus8• 4 years ago

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.

dragontamer15• 4 years ago

My car would perform extremely poorly on it

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.

morpheuskafka• 4 years ago

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.

dragontamer15• 4 years ago

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)

stubish• 4 years ago

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.

MattGaiser• 4 years ago

Russia could be pretty desperate now.

t0mas88• 4 years ago

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.

moralestapia• 4 years ago

Couldn't all of this have been considered in advance by the Russian government?

wodenokoto• 4 years ago

I know it’s utopian to think it’s and actual solution, but how fast can Norway ramp up production?

They’ve been sitting on their reserves and now seems like a great time to put them to use.

abalashov24• 4 years ago

Not fast enough for the <= 1 year outlook of the OP analysis. ;-)

tenpies2• 4 years ago

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.

ck2• 4 years ago

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?

abalashov24• 4 years ago

The trouble is that the scenarios in which Putin loses power because of this are marginal at best.

gukov• 4 years ago

There’s no one in the wings, at least as far as we can see.

The reason? The russia’s oldest tradition where power is taken, not given.

If, and it’s a huge if, there’s a change then I gotta think it’s going to be for the better, at least initially.

jaltekruse• 4 years ago

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.

https://www.boycott-russian-gas.com/

wahern4• 4 years ago

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.

labster4• 4 years ago

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.

wahern4• 4 years ago

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.

rasz• 4 years ago

You call correctly reading US internal politics incompetence from the Polish government?

abalashov24• 4 years ago

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.

wahern4• 4 years ago

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.

ep103• 4 years ago

Can I get a link on China's announcement today? I'm not seeing anything in google

darksaints2• 4 years ago

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.

spacedcowboy• 4 years ago

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.

ggm2• 4 years ago

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.

mmastrac• 4 years ago

I had to rack my brain to remember what a BTU actually meant.

freeone3000• 4 years ago

If we're going metric, why not go all the way and end up with joules?

ggm2• 4 years ago

Petajoules would work for me.

Youden• 4 years ago

A joule is just a Watt-second so a kilowatt-hour is already just a convenient number of joules.

foxyv2• 4 years ago

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.

mise_en_place• 4 years ago

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.

SSLy• 4 years ago

Can someone translate the units from Usian to English?

rgovostes• 4 years ago

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.

novaleaf• 4 years ago

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"

EVa5I7bHFq9mnYK2• 4 years ago

Or maybe written by a R**n?

ZeroGravitas• 4 years ago

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.

turtlebits• 4 years ago

Better start early and reduce the BTUs you need to heat your home. (air sealing, insulation, etc).

hollerith2• 4 years ago

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.

EVa5I7bHFq9mnYK2• 4 years ago

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.

There are not enough BTUs

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