The sanctions are working ok at keeping oil prices in a price range that doesn’t impact US producers yet creates a lot of friction for Russian oil deliveries, minimizing the net profits for Russia (even though gross revenue appear to be maintained). Nat gas: Gazprom took a huge loss this quarter, I think the first in decades. When the Russians find a work around more sanctions are added to try to plug the gap, which is working to a reasonable degree. Russia has switched to a war economy so the GDP appears to grow at a good clip but they’ve drained their currency reserves, the ruble took a dive and they just raised interest rates to 18%. Russia is not doing well. Anyway the US can’t find enough workers to pass a drug test to increase production, so there’s that too.
As it turns out, Biden is too old to understand what his energy policy actually is (never mind understanding the relationship between the supply/demand for a thing and the price for that thing.
Just after a late-February meeting of House and Senate leaders about military assistance to Ukraine, Biden pulled aside Johnson for a chat about funding and what it would take to bring the matter to a House vote.
Johnson brought up a new administration energy policy that halts future permits for shipping LNG to many countries, including in Europe, while the climate, economic and national-security impact of those exports are studied. The policy fanned concern that the ban would scuttle new projects and ultimately force U.S. allies to import more from energy-rich adversaries like Russia. The policy also affects several multibillion-dollar projects in Johnson’s home state of Louisiana by denying them, for now, key export permits.
“Mr. President, you are helping Vladimir Putin,” Johnson told the president, according to one of the people briefed on the exchange. Biden said that wasn’t true, and that the new policy was only a study, according to several people familiar with Johnson’s version of what happened. Johnson was dismayed that Biden appeared to have forgotten details of his own policies, they said.
Wow - 'lets LEAN on commodity producers elsewhere to drive their own prices down'. The free west needs more coordination and encouragement from America to execute American foreign policy!!!! It might be a radical thought, but perhaps American could just mind its own business. Would the world be a safer place?
Was it a dream or did crude oil futures prices trade negative for a moment during the Trump administration? I'm guessing OPEC wasn't too happy in my dream. Low priced and abundant energy obviates the need for a massive military. The MIC hates that too. So high energy prices it is.
Sorry- this actually reads like parody. Saying DC should print even more money to boost gas production that's already.being burned for lack of takeaway? Shipping out even more light crude the market doesn't want? The US only has 6 years of oil reserves left.
Wondering who doesn't understand the energy markets here.
Probably should have mentioned that US oil companies met with OPEC around this time to collude to restrict output to keep oil prices high. See Scott Sheffield, CEO of Pioneer, who got caught and now is being barred from taking a seat on Exxons board after the buyout (more to come on this). Saying Biden could have reduced oil prices by $20/bbl by just stating that’s his intention is ridiculous. I remember when Bush went to Saudi Arabia to beg them to increase production during the gulf war (2) to reduce prices. Not happening. The large oil companies are in this for themselves (including US companies), screw the US.
One little problem with your example - at the time of Gulf War 2, the shale revolution was barely a gleam in the eye of the industry. In today's world, Biden's actions could have reduced prices if he had expressed his support for the shale industry, if he hadn't stuffed his Dept. of the Interior with green radicals, and if he hadn't appointed a Secretary of Energy who understands nothing about this country's energy exports and potential.
There was nothing the Feds could do to increase production in the short term run up to the war and it didn’t matter who was running the show. Biden did utilize the strategic petroleum reserve to keep prices in check (ironically used as a defense against our own corporations, not other countries). Besides, the oil companies had 9000 unused leases already, what’s stopping them from increasing drilling? The issue was/is a severe labor shortage, plus a shortage of steel pipe (and sand in the Permian). Many producers couldn’t drill more if the wanted to. Take note that just 25% of oil production is on Federal land, and just 10% of gas, 15% and 2% respectively on land. Increasing the crude production 10% on federal lands just increases national production by just 1.5%. Or a few majors could turn a few valves and get the same result
Oh yeah, the well-used “9000 unused leases” line, because all leases guarantee the same result upon drilling. No, that is not how it works. If you’re going to shill for the administration, you should write for one of the regime outlets.
My sample size is very small but I do work with some pretty smart people. By smart I mean in their field, not geopolitics. Bottom line from what I see United States people don’t really care about Ukraine and are willing to accept any rationale that allows them to feel okay not caring. An example is the swallowing of the line that NATO expansion provoked the invasion. Our nightly news is filled with Trump trial coverage, Israel/Gaza, and fluff. You wouldn’t even know a land war in Europe was happening here. I asked one friend who was indifferent to Russia conquering Ukraine (he was like “Isn’t it Russia really anyway?”) where he would draw the line in Europe. Poland? Germany? France? England? He had no answer other than disbelief that Russia would go that far.
I agree with your thesis but I fear we are in the cycle of “good times make weak people” and we will just have to learn the hard way. The last decades have by and large been a golden age.
The US entered both world wars late and only after the people got angry; really angry. In “democracy” that’s just what it takes to fight a significant foe (hot or cold). It took 9/11 last time we cared. I hope the American plutocracy wakes up and acts decisively and doesn’t wait to lose a few cities first. Putin is reminding us that Alaska is Russian. He isn’t kidding.
Excellent article.. I feel strongly that the US economy, struggling from bouts of stagflation, would benefit greatly from a wave of cheap energy.. As well as taking out Putin’s War Machine at the knees..
I'm skeptical that the Progressive dominated Democrat party, this particular Administration, have the ability to be so practical. They appear to have concluded that power is the reason for their existence and aggressive, dirty politics and the contravention of law are the means to this end. They see Russia, fossil fuels and our Constitutional Republic as their enemies and feel it necessary to extinguish each without regard to the impact on US citizens.
I fear what you are dealing with is ideologues not intelligent life.
Take heart though, anything built on a foundation of delusion, lies and hate is not sustainable and will meet its end eventually.
All so cynical. I read the piece in 2022 and agreed with it back then. Can our leaders be this dumb? I ask my self that question and reason that there is no way they can be. But then they trot out Jared Bernstein who has served in not one but two recent administrations - and he comes off like a total dunce. We are either witnessing the “death of expertise” or something more nefarious. Sadly it doesn’t really matter what the reason is near term - it just matters that its happening and more important who has the will to do something about it?
Boy does that article sound desperate or what? Dumping , which the US/EU objects to if it is done by China, is OK when a supply flood comes from the West? OK then, let's just say there are no rules left to play by. In that environment, I would fearful of the BRICS countries more than any damage a rickety G7 could do, particularly when the former decides to price oil (and other commodities) to the West in other than dollars, as is already the case for a large proportion of oil going to China from oil producing BRICS nations.
Now, you are going to to have to go and negotiate with Klaus Schwab and his executive board for permission to allow his army of global young leaders to revert to a full blown fossil energy extraction and production. Good luck with that! And were Klaus to miraculously allow a sabbatical from his ESG madness, until that oil is extracted, there are always multiple ways to keep the price up; one of which for example being a repeat of the precedent created by the US/UK/EU/NATO on Nordstream. Any pipeline, oil tanker and LNG vessel becomes fair game in your scenario.
With respect, I really think this is not the right approach. It is the thinking of a petulant child that has had everything its way for so long, that it is not willing to consider the needs of the colonised nations when things look inevitably like they must change. You single out Russia: it is a blinkered view. Russia is acting for and on behalf of (roughly) 40 percent of global commerce, more than 60% by population, and over half of the world's natural resources. What we are going to end up with is having massive pain inflicted on us by our own governments - not the BRICS.
We aren't signaling out Russia, we are merely pointing out the flaws in the G7's sanctions strategy. There are no rules when the West feels like it can just seize Russian assets. Our approach would be far superior to what is being done today.
The sanctions are working ok at keeping oil prices in a price range that doesn’t impact US producers yet creates a lot of friction for Russian oil deliveries, minimizing the net profits for Russia (even though gross revenue appear to be maintained). Nat gas: Gazprom took a huge loss this quarter, I think the first in decades. When the Russians find a work around more sanctions are added to try to plug the gap, which is working to a reasonable degree. Russia has switched to a war economy so the GDP appears to grow at a good clip but they’ve drained their currency reserves, the ruble took a dive and they just raised interest rates to 18%. Russia is not doing well. Anyway the US can’t find enough workers to pass a drug test to increase production, so there’s that too.
Great piece! You could add German fracking for oil and gas to the list. Crazy thought, I know:
Oil would range between 18 - 221 million tones, approximately equivalent to 131.94-1,620.93 million barrels of oil.
For gas: 380-2340 billion cubic meters.
https://drive.google.com/file/d/1kVNZobUuFO04_j5DgxqvGhs5Rc8J7gZV/view?usp=drivesdk
https://www.bgr.bund.de/DE/Themen/Energie/Downloads/Abschlussbericht_13MB_Schieferoelgaspotenzial_Deutschland_2016.pdf;jsessionid=E57F6AAAEFE1181399878411AD93196C.internet972?__blob=publicationFile&v=5
As it turns out, Biden is too old to understand what his energy policy actually is (never mind understanding the relationship between the supply/demand for a thing and the price for that thing.
https://www.wsj.com/politics/policy/joe-biden-age-election-2024-8ee15246
Just after a late-February meeting of House and Senate leaders about military assistance to Ukraine, Biden pulled aside Johnson for a chat about funding and what it would take to bring the matter to a House vote.
Johnson brought up a new administration energy policy that halts future permits for shipping LNG to many countries, including in Europe, while the climate, economic and national-security impact of those exports are studied. The policy fanned concern that the ban would scuttle new projects and ultimately force U.S. allies to import more from energy-rich adversaries like Russia. The policy also affects several multibillion-dollar projects in Johnson’s home state of Louisiana by denying them, for now, key export permits.
“Mr. President, you are helping Vladimir Putin,” Johnson told the president, according to one of the people briefed on the exchange. Biden said that wasn’t true, and that the new policy was only a study, according to several people familiar with Johnson’s version of what happened. Johnson was dismayed that Biden appeared to have forgotten details of his own policies, they said.
No new Energy Department permits for exporting LNG have been issued since the pause was announced.
What if helping American prosper wasn’t our leaders goal?
Would their actions make better sense then?
Wow - 'lets LEAN on commodity producers elsewhere to drive their own prices down'. The free west needs more coordination and encouragement from America to execute American foreign policy!!!! It might be a radical thought, but perhaps American could just mind its own business. Would the world be a safer place?
Was it a dream or did crude oil futures prices trade negative for a moment during the Trump administration? I'm guessing OPEC wasn't too happy in my dream. Low priced and abundant energy obviates the need for a massive military. The MIC hates that too. So high energy prices it is.
Sorry- this actually reads like parody. Saying DC should print even more money to boost gas production that's already.being burned for lack of takeaway? Shipping out even more light crude the market doesn't want? The US only has 6 years of oil reserves left.
Wondering who doesn't understand the energy markets here.
Probably should have mentioned that US oil companies met with OPEC around this time to collude to restrict output to keep oil prices high. See Scott Sheffield, CEO of Pioneer, who got caught and now is being barred from taking a seat on Exxons board after the buyout (more to come on this). Saying Biden could have reduced oil prices by $20/bbl by just stating that’s his intention is ridiculous. I remember when Bush went to Saudi Arabia to beg them to increase production during the gulf war (2) to reduce prices. Not happening. The large oil companies are in this for themselves (including US companies), screw the US.
One little problem with your example - at the time of Gulf War 2, the shale revolution was barely a gleam in the eye of the industry. In today's world, Biden's actions could have reduced prices if he had expressed his support for the shale industry, if he hadn't stuffed his Dept. of the Interior with green radicals, and if he hadn't appointed a Secretary of Energy who understands nothing about this country's energy exports and potential.
There was nothing the Feds could do to increase production in the short term run up to the war and it didn’t matter who was running the show. Biden did utilize the strategic petroleum reserve to keep prices in check (ironically used as a defense against our own corporations, not other countries). Besides, the oil companies had 9000 unused leases already, what’s stopping them from increasing drilling? The issue was/is a severe labor shortage, plus a shortage of steel pipe (and sand in the Permian). Many producers couldn’t drill more if the wanted to. Take note that just 25% of oil production is on Federal land, and just 10% of gas, 15% and 2% respectively on land. Increasing the crude production 10% on federal lands just increases national production by just 1.5%. Or a few majors could turn a few valves and get the same result
Oh yeah, the well-used “9000 unused leases” line, because all leases guarantee the same result upon drilling. No, that is not how it works. If you’re going to shill for the administration, you should write for one of the regime outlets.
My sample size is very small but I do work with some pretty smart people. By smart I mean in their field, not geopolitics. Bottom line from what I see United States people don’t really care about Ukraine and are willing to accept any rationale that allows them to feel okay not caring. An example is the swallowing of the line that NATO expansion provoked the invasion. Our nightly news is filled with Trump trial coverage, Israel/Gaza, and fluff. You wouldn’t even know a land war in Europe was happening here. I asked one friend who was indifferent to Russia conquering Ukraine (he was like “Isn’t it Russia really anyway?”) where he would draw the line in Europe. Poland? Germany? France? England? He had no answer other than disbelief that Russia would go that far.
I agree with your thesis but I fear we are in the cycle of “good times make weak people” and we will just have to learn the hard way. The last decades have by and large been a golden age.
The US entered both world wars late and only after the people got angry; really angry. In “democracy” that’s just what it takes to fight a significant foe (hot or cold). It took 9/11 last time we cared. I hope the American plutocracy wakes up and acts decisively and doesn’t wait to lose a few cities first. Putin is reminding us that Alaska is Russian. He isn’t kidding.
Excellent article.. I feel strongly that the US economy, struggling from bouts of stagflation, would benefit greatly from a wave of cheap energy.. As well as taking out Putin’s War Machine at the knees..
A solid recommendation Doomberg.
I'm skeptical that the Progressive dominated Democrat party, this particular Administration, have the ability to be so practical. They appear to have concluded that power is the reason for their existence and aggressive, dirty politics and the contravention of law are the means to this end. They see Russia, fossil fuels and our Constitutional Republic as their enemies and feel it necessary to extinguish each without regard to the impact on US citizens.
I fear what you are dealing with is ideologues not intelligent life.
Take heart though, anything built on a foundation of delusion, lies and hate is not sustainable and will meet its end eventually.
God protect and save us from the evil or the idiots or the evil idiots. I cannot tell which they are, but I do know have over produced them.
Interesting piece from Foreign Affairs, agreeing with you about sanctions but promoting refinery strikes: https://www.foreignaffairs.com/ukraine/why-ukraine-should-keep-striking-russian-oil-refineries
All so cynical. I read the piece in 2022 and agreed with it back then. Can our leaders be this dumb? I ask my self that question and reason that there is no way they can be. But then they trot out Jared Bernstein who has served in not one but two recent administrations - and he comes off like a total dunce. We are either witnessing the “death of expertise” or something more nefarious. Sadly it doesn’t really matter what the reason is near term - it just matters that its happening and more important who has the will to do something about it?
Five of the top ten chess players of all time are Russian…hmmm.
*Soviet. The US never had a government-sponsored, cradle-grave chess program like the Soviet chess machine.
Boy does that article sound desperate or what? Dumping , which the US/EU objects to if it is done by China, is OK when a supply flood comes from the West? OK then, let's just say there are no rules left to play by. In that environment, I would fearful of the BRICS countries more than any damage a rickety G7 could do, particularly when the former decides to price oil (and other commodities) to the West in other than dollars, as is already the case for a large proportion of oil going to China from oil producing BRICS nations.
Now, you are going to to have to go and negotiate with Klaus Schwab and his executive board for permission to allow his army of global young leaders to revert to a full blown fossil energy extraction and production. Good luck with that! And were Klaus to miraculously allow a sabbatical from his ESG madness, until that oil is extracted, there are always multiple ways to keep the price up; one of which for example being a repeat of the precedent created by the US/UK/EU/NATO on Nordstream. Any pipeline, oil tanker and LNG vessel becomes fair game in your scenario.
With respect, I really think this is not the right approach. It is the thinking of a petulant child that has had everything its way for so long, that it is not willing to consider the needs of the colonised nations when things look inevitably like they must change. You single out Russia: it is a blinkered view. Russia is acting for and on behalf of (roughly) 40 percent of global commerce, more than 60% by population, and over half of the world's natural resources. What we are going to end up with is having massive pain inflicted on us by our own governments - not the BRICS.
We aren't signaling out Russia, we are merely pointing out the flaws in the G7's sanctions strategy. There are no rules when the West feels like it can just seize Russian assets. Our approach would be far superior to what is being done today.
Thanks for taking the time to reply.
Of course! Thanks for taking the time to comment.