If you feel comfortable with everything that’s going on in the world today, you are either a complete freak or perhaps more optimistically have mastered the not-crazy goal of isolating yourself from every media stream that is not slapstick comedy. It is hard to isolate – there is no respite in movies; they penetrate your brain like ear wigs with political messaging both subtle and not. Sports have been similarly overrun, whether in the professional realm where you must either love or hate someone for taking or not taking a knee, or in the amateur realm where you are supposed to be either uplifted or flaming with rage as some transitory individual mops up the ladies swim competition because, well, you can finish that sentence in your own head, I’m at a loss (and if I did my bank account would be frozen). You can’t find respite in ‘comedy’ shows because they’ve gone full politics too. A comedy industry that shuns Dave Chappelle is of no value to anyone.
While I would love to turn this site into pure slapstick, and I might, and some might argue that it is already, I would argue that there is one thing worth keeping in mind, something even more important than Russia/Ukraine, more important than truckers, more important than beer. What you should pay attention to is:
We are running out of fuel.
Throughout history, those have been bad words, and they are happening. I’m neither kidding nor being sensationalistic. Go do some homework if you are unsure. Stories aren’t in the mainstream; the media is obsessed with trucker donation lists and/or the people that use them, or whether windmills are going up too fast or too slow, or whether someone is weeping over a latte with hurt feelings. But the stories can be found.
This isn’t about running out of oil, or natural gas, or coal as resources. Those are there for the taking, underground. The problem is, few are doing the taking. Hydrocarbon producers are being hounded to move on from hydrocarbons, to pour their cashflow into emissions reductions infrastructure, or send it to the pockets of investors. National oil companies, who actually control much of the world’s hydrocarbon resources, are pretty much tapped out, according to both OPEC production stats and/or the lack of production growth at $90/barrel.
No, this is about a shortage of fuel, due to strangulation and abuse of our existing hydrocarbon system. Here are some consequences of the global war on hydrocarbons that seems like such a fantastic idea in sociology departments and political science think tanks. Let’s see how it plays out in the real world.
Europe this winter has been so desperate to obtain natural gas that LNG prices were bid through the roof to scoop cargoes from Asia. But that wasn’t enough, and both coal and fuel oil were burned in copious quantities to get through the winter. Enduring what are described as “crippling costs”, Euro governments are without a trace of irony unleashing fossil fuel subsidies as fast as they can to shield consumers from skyrocketing utility bills, just as many developing countries do with gasoline and heating fuel prices. Those are called ‘fossil fuel subsidies’ when other countries do it; when rich western countries do it it’s called ‘Hey look over there! Is that an eagle?’
That fight for LNG had some massive consequences that we do not readily hear about because we are self-absorbed, fat and wealthy, generically speaking. In Pakistan, in one province alone, three hundred CNG (compressed natural gas) fueling stations have been closed since December because no fuel was available. In that province, 2.7 million rickshaws, taxis, and flying coaches (whatever that is) have been parked due to lack of availability of CNG. Passengers and students are paying the price, in a population that has little of anything. And it gets worse. “The condition of low pressure was that our daily children have been forced to go to school without breakfast. Domestic women were facing severe difficulties in everything from providing milk to infants to preparing food in the kitchen,” the article stated.
In Africa, Nigeria is suffering gasoline shortages because external suppliers of gasoline have stopped supplying the country (though Nigeria is a huge producer, it relies on imported fuel significantly) in developments that a government official called “completely unavoidable” and that they did not see coming. A taxi driver in Abuja, Nigerial’s capital, tells of sleeping 14 hours in line to get gasoline so as to able to work, and of daily earnings falling from $17 per day to $5, if there is gasoline at all. Correspondingly, fares have more than doubled, which is a considerable inconvenience for a country that lives somewhat dissimilarly to, say, NYC residents.
Those are but a few examples; others are out there if one is interested in real global problems.
What are the elites doing, the western powers that be? They are putting on brave faces for the camera, and behind closed doors are either hounding producers to produce more, or are presumably laying on the floor and either crying or hyperventilating. Well, that might be an exaggeration, because they might be smart enough to have scapegoats lined up. They’ve been listening to the likes of the International Energy Agency, who famously said late last year that the world must not develop any more fossil fuels, period, to meet the net-zero 2050 emissions targets. That same IEA has been in the past few days hectoring OPEC to produce more oil because global inventories are falling like a rock, and global consumption is hitting new record highs.
OPEC itself has long insisted it has tons of spare capacity, and pledged to bring back additional volumes at a rate of 400,000 barrels per day every month, starting last September. They have yet to hit that target, and the most recent month saw them bring on less than half of that.
Biden has also been scouring the world to line up natural gas supplies for Europe in case Russia Russias, to no avail – even Qatar (one of the world’s top exporters) said nope, the pantry is empty. Biden has also badgered OPEC to produce more oil, and they have shrugged and went on their way. (Biden is rushing to stitch up a nuclear deal with Iran to get their barrels back on the market, but suspicions are high that Iran has been selling a lot on the black market anyway and a new nuclear pact wouldn’t make that much difference (except to free Iran to do whatever it wants, but that’s a problem for another day. Beggars can’t be choosers.).) We do hear about those attempts, because they are threads necessary to keep western populations from revolting. We hear endlessly about Europe’s woes, because like most western institutions, it is Very Important.
So we are are made acutely aware of the feelings of the 700-odd million in the west; when was the last time you read about fuel shortages in Pakistan, or Africa, or India, or anywhere else that is not on the global elite travel circuit? They are happening, and happening now, but seriously, who cares about those people when we have our current set of western crises to worry about, like hauling truckers to prison and death matches over gender terminology?
In a twist due to global bottlenecking, our fat asses in North America are blessed with natural gas prices that are a fraction of global prices. Few notice or care, because no one understands the role natural gas plays in the world. Without massively more LNG export capability, we will remain lucky to have that.
But North America is not immune to any fuel that is easily transported intercontinentally. Again, it is fuel we are talking about Even the US is suffering from diesel stocks that are falling “critically low”. Beyond that, consumers may be comforted by no obvious fuel shortages, but we will see the consequences of global shortages indirectly. Fertilizer plants are shutting down due to lack of affordable natural gas, which will drive up food prices and possibly lead to food shortages that will even impact our hallowed supermarkets. Global metals producers are cutting output, which will indirectly cause us grief when we can’t buy whatever we want whenever we want. This is starting to happen already. That’s what happens when we offshore manufacturing of pretty much everything.
Capital has been chased away from the hydrocarbon sector by the ‘divest fossil fuels’ movement, and a lot of spineless money managers have followed that path. The petroleum industry is not immune from judgement either; poor returns have eliminated investor enthusiasm for growth stories. Either route spells less supply on the market, at the same time that US and global demand hits new records for oil and natural gas.
All the nonsense in the news is comparatively irrelevant. The world is running out of fuel. We are going to pay.