“To be an enemy of America can be dangerous, but to be a friend is fatal” — Henry Kissinger in 1963
The bus
We knew the bus was coming. We were warned. Several times. We were shown a rough timetable 50 years ago, when a group of MIT scientists discovered, after running several versions of a world economic model including all possible (and impossible) combinations of resource use, pollution and population, that we are headed towards a steady decline in the better part of the 21st century. Unless of course, if we wholeheartedly embarked on a journey towards a steady state economy and aimed for true sustainability, starting immediately — back in 1972 already. Needless to say: we didn’t.
In 1973 the Arab oil embargo has shown the West what a devastating impact energy shortages can have on an industrial economy. In the following years, after a few tentative steps in the right direction, however, the West has decided to double down on its magic substance use by opening up Alaska and the North Sea for oil extraction. Needless to say: it was a bad idea.
As we have seen the last time, magic, in the form of symbols (a car, a house, a holiday flight) can have a huge impact on people’s consciousness. It can make large populations believe that the drawdown of finite resources (coal, oil and gas, as well as other minerals like copper) has no negative consequences and thus can go on indefinitely. In its delirium, felt over the return of economic growth and prosperity — entirely the result of drawing down new sources of oil — the West has quickly forgotten about shortages. Instead of preparing for a predictable return of the same crisis, they went out of their way sidestepping a simple fact of life:
If something cannot go on forever, it will stop
The drawdown of finite resources is one such thing. The continued use of limited resources, like oil or other minerals, will inevitably end up in shortages, then after a long period of decline: depletion. It’s very important to note, that it is precisely the onset and the subsequent acceleration of this decline which causes the most trouble, as we will see it during the coming decades, not the shutting down of the last functioning well or mine.
Economies will be fighting a constant war against the relentless fall in energy and material inputs (3–5% a year is more than enough), and as a result: declining tax and corporate revenues. In a world like this, real and economic wars fought against each other can only make matters worse: as they will inevitably hurt ‘production’ of resources and divert an ever larger portion of them for military purposes.
Of course, you cannot argue or reason with a population under a spell. So such warnings were (and will be) duly disregarded, together with climate change potentially wiping us out; labelled as ‘doomism’ — a modern word for ‘evil sorcery’… ‘Ssh, mentioning such things brings bad juju!’ The handwaving on how resource depletion is a ‘non-issue’ and how ‘technology will save us’ thus continues unabated.
The bus, or the onset of resource decline — as you might have already guessed, appears to have arrived on time though. Some, with a better eyesight could see it coming in, or already before, 2005 when conventional oil production has reached it’s bumpy plateau phase. After a quick retirement party though, labelled as the shale revolution in the US, world oil production has duly peaked in November, 2018. Then the onset of a pandemic, and a resulting drop in consumption masked the problem for while. A cloud of fog has descended on the landscape: the bus kept coming, but no one could see it.
At least until a sunny summer day in 2021: when it has started to become ever more obvious, that something is fundamentally wrong with oil supply: it simply could not get back to 2019 levels. Perhaps, not entirely coincidentally (but rather consequently), natural gas production has also experienced its own limits to growth at roughly the same time. Just like coal.
We are talking about a time, when world electricity demand still wanted to grow substantially. However, only one third of this growth could’ve been provided by ‘renewables’ (1). In other words the overwhelming majority of this expansion in electricity demand had to be satisfied by burning more natural gas and coal. More than ever. For an extended period demand for fossil fuels rose faster than supply. No wonder, that their prices have thus started to soar.
Electricity rationing duly took place in China during the summer, and gas shortages loomed over the entire Eurasian continent. Fertilizer production facilities, zinc, magnesium and aluminum smelters in Europe had to close or reduce production for months as a result. The bus has sounded its horns.
Remember, all this has happened in summer-autumn of 2021. Six months before the war in Ukraine has escalated to its current levels.
Those who cared to look in the right direction — from where the bus was coming — could saw that this cannot possibly end well. The sidewalk was full of pedestrians, and those walking closest to the curbstones, sometimes stepping on the road itself, would be hit first. Sri Lanka was the first to be smashed. Its leadership has clearly made many stupid moves, but were it not for the bus coming, they would be still in power. Now, they are gone.
The push
On February 24, 2022 Russia has attacked Ukraine. An allegedly ‘unprovoked’ move, but a buildup of a NATO trained and equipped army at Russia’s doorstep, the direction of shelling in the weeks before the invasion, and Biden’s preparatory tour in Europe suggests otherwise. If you think this is Russian propaganda, let me remind you that all this has happened precisely as advised (and very much against the risks stated) by the foreign policy report titled Extending Russia… A paper, penned by the West’s very own think tank of warmongers: RAND Corporation — back in 2019. It was ordered by a ‘completely different’ administration, yet it lay out the exact strategy the West now pursues so eagerly — and in fact has pursued for years now. A thing to ponder on.
In the meantime, and as an integral part to this well prepared strategy, a list of sanctions were already in the making — well before the first shots were fired on the battlefield. To give a foretaste of things to come, the first round of them were served already on the 22nd of February — two days before the invasion began. The risks were fully known and understood — and at the same time were seriously downplayed: based on the false belief that the biggest supplier of fossil fuels for Europe would crumble in a matter of weeks, as it was thought to be nothing more than “a gas station with guns”. An understatement proving to be increasingly fatal with every passing moment, leading to a loss of many hundred Ukrainian lives a day.
The process has naturally led to sanctioning the continent’s biggest supplier of energy — which, despite the claims of the high order of modern monetary wizards — is still, and always will be the essence of all economies. In fact energy is the economy, as it is the essence of all life on Earth. Take it away, and you’ve got a cold corpse instead of a workforce, and statues instead of machines — to paraphrase Steve Keen.
Again, if this had happened in an infinite world, capable to accommodate whatever consumption increase we imposed on it, this would not be the case. Russia could have been left out of the game, Qatar, Saudi Arabia or America could have raised production, and the issue would have been settled… At least until all coastal cities and agricultural land slowly turned into steaming salt marshes from sea level rise.
In reality though, while fossil fuel drawdown is high enough to keep climate change continuing unabated, it is now clearly not going at a pace fast enough to keep the world economy functioning properly. Rock and a hard place, anyone?
Yet sanctions happened — despite all this. In a world, where energy supply has already experienced serious troubles catching up with demand — well before the tanks started rolling over the border. On a continent, which has already used up the better part of its fossil fuels, and has passed every measurable peak in their ‘production’. In a region which, as a result, now hopelessly depends on imports from raw materials to energy and labor to keep up a semblance of a functioning economy. One, which, by the way, still gets 74%, or three quarters of its energy from fossil fuels.
The sound of the bus honking is now deafening and Europe is lying flat on the road.
Qui bono?
Whose benefit? — one might ask. We can argue based on the RAND paper and recent history, that this has been set up for Europe and it’s subservient leadership class played along nicely. The farce around opening Nord Stream II last autumn and winter was a perfect fit to the strategy of ‘Extending Russia’ — suggested by RAND — and exposed Europe as a politically weak, and to be honest, fully incompetent ally. There was a measurable increase in escalations in the years leading up to the war — which at the same time has prevented Germany (and Europe in general) enjoying the benefits of cheap fossil fuels from the East.
Meanwhile, the public was hypnotized by climate agreements, net zero pledges, wind turbines and solar panels popping up all over the place. We were made believe that we will just shut down all coal fired power plants and nuclear facilities as we seamlessly transition into a full-electric renewable utopia. (Note, that this hypnosis has worked on fossil fuel companies as well, who now refuse to make investments for Europe in turn.) Europe was lured into a trap with this green utopia, which for many technical reasons could not come about, and left it fully exposed to fossil fuel depletion — now turbocharged with sanctions.
It is unsurprising, but also deeply ironic, that wind turbine manufacturers were among the first casualties of the fossil fuel crisis hitting Europe: suffering from both high raw material (metals) and high electricity prices — both originated in the high costs of natural gas, coal and oil. European solar panel production was not hit, fortunately, as it was moved to China a long time ago: lured there by cheap electricity provided by coal, and transported to Europe on ships burning oil. The first renewables produced by renewable energy and from recycled materials are still yet to be seen.
Left without adequate amounts of energy, Europe is now primed for de-industrialization.
Could it be that this was the plan all the way through?
There seem to be several competing lobby groups in the US (including, but not limited to the ‘military-industrial complex’, fossil fuel companies or the finance and banking sector) betting on Europe’s economy crumbling and their favored businesses rising back home as a result. What’s better than more exports to Europe, combined with reduced competition producing similar goods there…? Colonizing the ex-colonizers looked like fun, and with increased prices back in the States providing all those extra profits investors so eagerly seek, this seemed to be a win-win-win. The question none of these interest groups were willing to ask though was: what’s the catch?
While — for example — American fossil fuel companies and their supporters in government might enjoy a period of windfall profits (which they use to buy back stocks, and not increasing production by the way), their long term prospects turn rather grim considering a potential worldwide financial collapse induced by the sudden fall of Europe. The soaring natural gas prices in the States might also lead to higher inflation, threatening banks with defaults from hard pressed debtors… It is no wonder then, that there are several well planted people in various departments hindering the restart of the Freeport LNG terminal — protecting US consumers from the same rise of natural gas prices Europe is experiencing right now and from the second order effects banks do not want to see.
How Europe was blackmailed to participate and made to assist in destroying its own economy is beyond my me. What were Europeans threatened with…? Sanctions…? War…? Nevertheless, its leadership caste now seem to be hell bent on keeping sanctions in place, come winter or mass protests, and even ready to up the ante with their harebrained oil price cap idea. It is absolutely no wonder then, that Russian engineers suddenly find “all sorts of technical problems” preventing them reopening Nord Stream I after an unplanned maintenance session. The die seems to be cast.
The bus will now roll over Europe this winter.
Hopefully it won’t completely crush its internal organs (the industry) leading to a multi-organ failure (financial collapse). Hopefully, Europe will be able to climb back up to the sidewalk after a few weeks of blackout endured by its heavy and chemical industries, and a few bruises here and there. Even then though, extra amounts oil and gas will not magically appear on the market — those days are now gone — and the crisis has a good chance to turn into a permanent state of energy deprivation.
Fossil fuels have now slowly and grudgingly started to leave the scene, and while throwing one’s allies under the bus might somewhat delay the onset of similar issues in the core of the Western Empire, one cannot escape its fate. Empires and civilizations rise, prosper and fall. We have just entered this later phase and its not looking nice. At all.
Until next time,
B
Notes
(1) According to BP’s annual stats review, electricity consumption went up by 1577 Terawatt-hours (or 6.2%) globally between 2020 and 2021, but power generation from all ‘renewable’ sources (including biomass and hydro) has increased by 511 Terawatt-hours only.
