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There are not enough BTUs
- anonu 5y agoRead 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.
- AnimalMuppet 5y agoIf 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 5y agoThe easiest is probably to just buy a fund with all commodities, then you don't have to figure any of that out.
- elil17 5y agoYou’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.
- anonu 5y agoEV of 0? Are you assuming you're leveraged 50 to 1?
- throwaway_4ever 5y agoThey either mean commodities long term have 0% real returns, or that the “contango” of holding commodities as an asset means long term the asset's worth becomes 0 (high expense and 0% real return)
- 55555 5y agoThey mean zero sum or negative sum.
- melling 5y agoDo 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 5y agoOvernight? Not a chance.
- runarberg 5y agoSpring 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.
- Sebb767 5y ago> Spring is here, Europe has reserves... We actually don't have a lot of reserves due to a mix of pissing of Russians (at mid/end '21) and massive speculation. > 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. Lower class people and even lower middle class people are already hurting. I can handle a surprise increase in heating costs and a jump in gas prices, but people who need to drive to work daily aren't that lucky (and, to make matters worse, the government just reduced the home office incentives in Germany). Once prices hit serious peaks (doubling and up) or actual supply issues appear, support will fade very quickly,even in the privileged classes.
- runarberg 5y agoEuropeans really don’t want war on their continent. There are options which the governments can employ. Governments can offer free public transit, they can mandate remote work, they can mandate worker pick-ups for large workplaces, etc. There are a lot of inefficiencies in Europe’s energy uses, and during an energy crisis these inefficiencies will have to be tackled no matter the cost. And Europe does have the money to pay for these. Will it be inconvenient? Yes. Will it be devastating, probably not nearly as devastating as the war in Ukraine. I stand by what I said. Europe really doesn’t want this war, and I bet most people are willing to suffer an energy crisis with the hope that it will stop earlier. And if governments fail to offer remedies during the energy crisis, it is on them and they will suffer in the polls.
- dcchambers 5y agoIt'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 5y agoLNG 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.
- dcchambers 5y agoRight, corrected!
- moonchrome 5y agoAnd 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.
- Spooky23 5y agoAlso, pipeline capacity to Boston, one of the bigger LNG ports in the east coast was blocked by environmental activists. Makes me wonder if the post-Fukushima hysteria that inspired German nuclear shutdowns and at least one major US nuclear reactor was influenced from abroad.
- eddyg 5y agohttps://berthub.eu/gazmon/ 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).
- abalashov 5y agoI 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!
- XorNot 5y agoThe 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.
- abalashov 5y agoYeah, 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.
- alephxyz 5y agoI agree that's there's no chance of a popular coup anytime soon. Russian intelligence services were able to influence the results of the US election just by buying Facebook ads, leaking hacked DNC emails to WikiLeaks and funding a few extremist voices. Now imagine what they could do by controlling every single media outlet in a country for the two decades Putin has been in power.
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- whatever1 5y agoOh 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.
- netsharc 5y agoOff-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 5y agowell, they add to the credibility of what's being said. harder to fake.
- gruez 5y agoReminds me of wtfhappenedin1971, although this is arguably less bad because it at least has some prose
- dangom 5y agoActually gives a lot of context for someone not familiar with the topic/data. I learned more from the plots than from the prose.
- galacticaactual 5y agoNeed a Commando 8.
- jleyank 5y agoHow 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 5y agoRelevant: "German Hard-Coal Production to Cease by 2018" (2007) https://www.washingtonpost.com/wp-dyn/content/article/2007/07/29/AR2007072901078.html 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 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_process 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_background 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/Territory_of_the_Saar_Basin - https://en.wikipedia.org/wiki/1935_Saar_status_referendum https://en.wikipedia.org/wiki/1935_Saar_status_referendum - https://en.wikipedia.org/wiki/Saar_Protectorate 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 https://en.wikipedia.org/wiki/Synthetic_Liquid_Fuels_Program
- dragontamer 5y agoThe 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 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 5y agobut 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.
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- abalashov 5y 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".
- stubish 5y 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 5y agoRussia could be pretty desperate now.
- t0mas88 5y agoBut 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 5y agoCouldn't all of this have been considered in advance by the Russian government?
- wodenokoto 5y agoI 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.
- tenpies 5y agoNo 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.
- abalashov 5y agoNot fast enough for the <= 1 year outlook of the OP analysis. ;-)
- jaltekruse 5y agoI'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/ https://www.boycott-russian-gas.com/
- ck2 5y agoAmazing 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?
- abalashov 5y agoThe trouble is that the scenarios in which Putin loses power because of this are marginal at best.
- gukov 5y agoThere’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.
- wahern 5y 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.
- abalashov 5y agoI 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.
- wahern 5y agoOr 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.
- labster 5y agoI 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.
- spacedcowboy 5y agoI 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.
- ggm 5y agoFor 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 5y agoI had to rack my brain to remember what a BTU actually meant.
- freeone3000 5y agoIf we're going metric, why not go all the way and end up with joules?
- foxyv 5y agoMostly 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.
- TheCoelacanth 5y agoWe just need to get people to start measuring time in kilo/mega/gigaseconds /s
- foxyv 5y agoOr just adjust the second to 0.864 old-seconds so that there are 100 seconds per minute, 100 minutes per hour and 10 hours per day. But we can't manage to agree on DST/STD time so that isn't happening!
- ggm 5y agoPetajoules would work for me.
- Youden 5y agoA joule is just a Watt-second so a kilowatt-hour is already just a convenient number of joules.
- mise_en_place 5y agoThis 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 5y agoCan someone translate the units from Usian to English?
- rgovostes 5y agoWas 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 5y agoI 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"
- EVa5I7bHFq9mnYK 5y agoOr maybe written by a R**n?
- ZeroGravitas 5y agoI'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 5y agoBetter start early and reduce the BTUs you need to heat your home. (air sealing, insulation, etc).
- hollerith 5y agoWhat 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.
- EVa5I7bHFq9mnYK 5y agoI 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.