In the 1970s and 1980s the media was constantly whining about how we are going to run out of oil and gas. They made movies about worried CIA agents fighting to secure the last of the supplies for U.S. industry. They created the Dinosaur-doo-doo Theory, telling us that the accumulated waste of the dinosaurs created all of the oil supplies and we are at the end of the rope. And one clear day I came across an event: a major oil discovery on the Northern edge of Alaska was plugged up with concrete; they just walked away from it. There was verification for this one. In the last decades oil producing nations were excluded from selling their black gold, one by one to push up prices. Gas prices in the U.S. are predictable. Before every presidential election they move down for a year or so. After election the process is reversed. Oil was turned into a major criminal enterprise by America.
As Russia has proved time and again, oil is Abiotic and not a by-product of dinosaur shit or brussel sprouts decaying 😂. This planet will become uninhabitable and sterilized by an expanding sun - about 500 million years from now - long before we run out of 'Texas Tea'.
The 2008 Global Financial Crisis was fundamentally an energy crisis with CPI elevated for 4 years peaking in July 2008 at 5.6%. Fracking came out of the elevated energy prices of the 2000s and first made America effectively energy independent around 2014 and then energy dominant in 2022. The fact you care about gasoline prices means you are stuck in 2007…it’s 2025 and natural gas is now the most important fossil fuel.
Interesting reading, many thanks. I just wonder why you didn’t mention any interdependence between the LNG project and the price negotiations related to the Power of Siberia pipeline project. Is there any? In my view possibly could be.
Another point I‘m wondering: why should it be in Russia‘s interest to stabilise the European economies/ industries, given that weaker economies could slow down any „Rearm Europe“ effort.
As for giving economic relief to the weaker economies, I think that Russia's calculation is that it has military superiority over them and that the EU's "ReArm Europe Plan" won't achieve most of what it aims for.
Therefore, the larger goal seems to be formalizing their energy ties that informally still exist despite the sanctions, profiting accordingly, compromising to a degree with the US on the issue of energy exports to Europe, and working towards a larger deal with the US.
The fossil fuel industry for Russia is an absolute top priority. If they are left alone to do their business, they will likely develop into the largest producer of the planet and there are a few places where people worry about exactly just this. Russia has a secret desire to become the largest supplier of the Eurasian continent and that will work only with functional economies there. In other words, under normal circumstances when things turn back to normal after the war, we can expect a mutually beneficial symbiotic relationship there that will keep all sides happy and finish this retarded “We hate Russia!” attitude for good. Russia is part of the Western World, Peter the Great already made this decision and we should be extremely happy about that. The anti-Russian hysteria that was driving American foreign policies and geopolitics since 1991 was a product of a fifth column that has to be dismissed.
Yes. China is building huge natural gas storage infrastructure to go with their huge hydro dams that act as natural gas storage. So China believes they can manipulate the LNG market to buy in March when prices are low and stay out of the market in August when prices spike. So they don’t want to get stuck with long term contracts to buy piped gas as they would prefer to buy at spot prices. Unfortunately Republicans are throwing China lifeline by building huge amounts of LNG export infrastructure that will create a global spot market to benefit China and harm American consumers.
China's short-sightedness in long-term planning can be seen in this event. However, for a proper balance and equidistance diplomacy, Russia does not need to exclude China if China wants to get back in (especially since they pulled out under the disguise of sanction pressure). Don't give China or any other pro-Western powers controlling interests is enough. Like Russia > 51% and everybody else together < 49%. By the way, I think allowing the USA or any other Western countries to even buy this LNG would require that they stop all sanctions and return all frozen Russian assets.
The world is awash in natural gas…the only issue is delivery at a reasonable price to Europe and Asia. Btw, the World Cup is the premier global event and the last 4 (including women’s and 2026) have been held by the biggest natural gas exporters…because it’s the most important fossil fuel. With advances in renewables energy is no longer an issue for the next 20 years at least. So Putin believed his leverage (piped gas to Europe) would get weaker every year from 2022 on out.
The world has a lot more gas than oil for sure. The remaining gas we know in "proven reserve" can probably last 100 years if the consumption rate of gas does not change much from long-term average. There may be even more gas waiting to be found. BUT, as you said, at what cost? Air is abundant and free, but when one is suffocated, that free air is simply not available. What if the cost to retrieve oil and gas requires more than money but a lot of energy use (it is this way already) and we don't have enough energy to retrieve the known energy reserve? Oil reservoirs can be flushed clean using air or water. Gas reservoirs depend on earth crust pressure to flow and cannot be flushed. Huge amount of methane gas is trapped in ice. We can dissolve the ice by sunlight, slowly, but it will not be easy to capture the freed methane.
Now is the time to develop renewables while natural gas is cheap and abundant…we can’t afford another 2005-2008 when an energy crisis implodes the economy.
Strictly speaking, the new infrastructure development should have started at least 10 years ago, as NG is not good for engineering machinery away from the grid and infrastructure for using NG is not quite enough. While the concept of renewables is good, we need some large-scale breakthroughs at the fundamental level for renewables to be significant enough. We need to build up nuclear power generation to buy more time for that breakthrough to happen. The most efficient mechanism for grabbing solar energy is vegetation but the result is difficult or costly to use (burning wood or charcoal). Nuclear fusion MAY have a future, but I think we are not there yet, and it is too early to ask when.
An especially thought-provoking analysis Andrew, many thanks! I can’t help but be reminded of an old proverb - especially popular with oligarchs, plutocrats and 19th c. robber-barons - “A rising tide lifts all boats”. Nowadays a rather poignant ‘two-edged sword” given the apparently inevitable thawing of much polar ice compelling many coastal dwellers to move to higher ground. So it goes, sadly. Not so sad, however, for nations/ territories with Arctic petroleum reserves and now-navigable coastlines and’new’ (and rather lucrative) trade routes to develop. A popular slang expression in the USA these days is “it’s all about the Benjamins, baby!” ($$$) Nowhere is this more true than in the business of fossil fuel exploration and extraction. Russia seems poised (imho) to become the predominant player in the ‘oil patch’ (more slang, sorry ;^) globally. Given China’s civilizational history as merchants and traders, and now their unrivaled shipbuilding capacity (and of course manufacturing) it seems absurdly unlikely that the flailing Unipolar Hegemon could ever drive a wedge between such a natural partnership. We certainly live in ‘interesting times’. Now if we could only reduce atmospheric CO2 at the same time - without resorting to a ‘nuclear winter’…….. “You can say I’m a dreamer - but I’m not the only one.”
China has a surplus of LNG imports and doesnt necessarily need output from the arctic though as you point out it may be loathe to let others muscle in on investments its abandoned. It's placed retaliatory tarrifs on US LNG imports yesterday. The details of which I'm not clear on. Spot or contract. But for now it's well supplied.
(Bloomberg) -- China hasn’t imported liquefied natural gas from the US for 40 days, the longest gap in almost two years, as traders are forced to divert shipme...
In the 1970s and 1980s the media was constantly whining about how we are going to run out of oil and gas. They made movies about worried CIA agents fighting to secure the last of the supplies for U.S. industry. They created the Dinosaur-doo-doo Theory, telling us that the accumulated waste of the dinosaurs created all of the oil supplies and we are at the end of the rope. And one clear day I came across an event: a major oil discovery on the Northern edge of Alaska was plugged up with concrete; they just walked away from it. There was verification for this one. In the last decades oil producing nations were excluded from selling their black gold, one by one to push up prices. Gas prices in the U.S. are predictable. Before every presidential election they move down for a year or so. After election the process is reversed. Oil was turned into a major criminal enterprise by America.
As Russia has proved time and again, oil is Abiotic and not a by-product of dinosaur shit or brussel sprouts decaying 😂. This planet will become uninhabitable and sterilized by an expanding sun - about 500 million years from now - long before we run out of 'Texas Tea'.
I doubt we make it that far anyway.
The 2008 Global Financial Crisis was fundamentally an energy crisis with CPI elevated for 4 years peaking in July 2008 at 5.6%. Fracking came out of the elevated energy prices of the 2000s and first made America effectively energy independent around 2014 and then energy dominant in 2022. The fact you care about gasoline prices means you are stuck in 2007…it’s 2025 and natural gas is now the most important fossil fuel.
Interesting reading, many thanks. I just wonder why you didn’t mention any interdependence between the LNG project and the price negotiations related to the Power of Siberia pipeline project. Is there any? In my view possibly could be.
Another point I‘m wondering: why should it be in Russia‘s interest to stabilise the European economies/ industries, given that weaker economies could slow down any „Rearm Europe“ effort.
I touched upon the Power of Siberia 2 pricing dispute in this analysis last year:
https://korybko.substack.com/p/analyzing-the-reported-chinese-russian
It's also hyperlinked to, if I remember correctly, in some of the analyses I linked to in this one too.
As for giving economic relief to the weaker economies, I think that Russia's calculation is that it has military superiority over them and that the EU's "ReArm Europe Plan" won't achieve most of what it aims for.
Therefore, the larger goal seems to be formalizing their energy ties that informally still exist despite the sanctions, profiting accordingly, compromising to a degree with the US on the issue of energy exports to Europe, and working towards a larger deal with the US.
The fossil fuel industry for Russia is an absolute top priority. If they are left alone to do their business, they will likely develop into the largest producer of the planet and there are a few places where people worry about exactly just this. Russia has a secret desire to become the largest supplier of the Eurasian continent and that will work only with functional economies there. In other words, under normal circumstances when things turn back to normal after the war, we can expect a mutually beneficial symbiotic relationship there that will keep all sides happy and finish this retarded “We hate Russia!” attitude for good. Russia is part of the Western World, Peter the Great already made this decision and we should be extremely happy about that. The anti-Russian hysteria that was driving American foreign policies and geopolitics since 1991 was a product of a fifth column that has to be dismissed.
Yes. China is building huge natural gas storage infrastructure to go with their huge hydro dams that act as natural gas storage. So China believes they can manipulate the LNG market to buy in March when prices are low and stay out of the market in August when prices spike. So they don’t want to get stuck with long term contracts to buy piped gas as they would prefer to buy at spot prices. Unfortunately Republicans are throwing China lifeline by building huge amounts of LNG export infrastructure that will create a global spot market to benefit China and harm American consumers.
China's short-sightedness in long-term planning can be seen in this event. However, for a proper balance and equidistance diplomacy, Russia does not need to exclude China if China wants to get back in (especially since they pulled out under the disguise of sanction pressure). Don't give China or any other pro-Western powers controlling interests is enough. Like Russia > 51% and everybody else together < 49%. By the way, I think allowing the USA or any other Western countries to even buy this LNG would require that they stop all sanctions and return all frozen Russian assets.
The world is awash in natural gas…the only issue is delivery at a reasonable price to Europe and Asia. Btw, the World Cup is the premier global event and the last 4 (including women’s and 2026) have been held by the biggest natural gas exporters…because it’s the most important fossil fuel. With advances in renewables energy is no longer an issue for the next 20 years at least. So Putin believed his leverage (piped gas to Europe) would get weaker every year from 2022 on out.
The world has a lot more gas than oil for sure. The remaining gas we know in "proven reserve" can probably last 100 years if the consumption rate of gas does not change much from long-term average. There may be even more gas waiting to be found. BUT, as you said, at what cost? Air is abundant and free, but when one is suffocated, that free air is simply not available. What if the cost to retrieve oil and gas requires more than money but a lot of energy use (it is this way already) and we don't have enough energy to retrieve the known energy reserve? Oil reservoirs can be flushed clean using air or water. Gas reservoirs depend on earth crust pressure to flow and cannot be flushed. Huge amount of methane gas is trapped in ice. We can dissolve the ice by sunlight, slowly, but it will not be easy to capture the freed methane.
Now is the time to develop renewables while natural gas is cheap and abundant…we can’t afford another 2005-2008 when an energy crisis implodes the economy.
Strictly speaking, the new infrastructure development should have started at least 10 years ago, as NG is not good for engineering machinery away from the grid and infrastructure for using NG is not quite enough. While the concept of renewables is good, we need some large-scale breakthroughs at the fundamental level for renewables to be significant enough. We need to build up nuclear power generation to buy more time for that breakthrough to happen. The most efficient mechanism for grabbing solar energy is vegetation but the result is difficult or costly to use (burning wood or charcoal). Nuclear fusion MAY have a future, but I think we are not there yet, and it is too early to ask when.
An especially thought-provoking analysis Andrew, many thanks! I can’t help but be reminded of an old proverb - especially popular with oligarchs, plutocrats and 19th c. robber-barons - “A rising tide lifts all boats”. Nowadays a rather poignant ‘two-edged sword” given the apparently inevitable thawing of much polar ice compelling many coastal dwellers to move to higher ground. So it goes, sadly. Not so sad, however, for nations/ territories with Arctic petroleum reserves and now-navigable coastlines and’new’ (and rather lucrative) trade routes to develop. A popular slang expression in the USA these days is “it’s all about the Benjamins, baby!” ($$$) Nowhere is this more true than in the business of fossil fuel exploration and extraction. Russia seems poised (imho) to become the predominant player in the ‘oil patch’ (more slang, sorry ;^) globally. Given China’s civilizational history as merchants and traders, and now their unrivaled shipbuilding capacity (and of course manufacturing) it seems absurdly unlikely that the flailing Unipolar Hegemon could ever drive a wedge between such a natural partnership. We certainly live in ‘interesting times’. Now if we could only reduce atmospheric CO2 at the same time - without resorting to a ‘nuclear winter’…….. “You can say I’m a dreamer - but I’m not the only one.”
China has a surplus of LNG imports and doesnt necessarily need output from the arctic though as you point out it may be loathe to let others muscle in on investments its abandoned. It's placed retaliatory tarrifs on US LNG imports yesterday. The details of which I'm not clear on. Spot or contract. But for now it's well supplied.
https://finance.yahoo.com/news/china-halts-us-lng-imports-000029173.html
(Bloomberg) -- China hasn’t imported liquefied natural gas from the US for 40 days, the longest gap in almost two years, as traders are forced to divert shipme...
Russia will not agree to a cease fire. They don't care about the sanctions.