Adversarial Dumping from the Gulf

I got a lot going on

Hindsight is perfect vision and at this point it is quite clear that all those clean marine fuel projects to drive shipping and agriculture using green ammonia would have been a good thing to have around right now. Projects like the Murchison green ammonia plant in Australia - apparently nobody wants to pay up for security globally until they need it - like a person wanting to buy insurance on a house that has already burnt down.

Most of these projects have fallen over because it is hard to compete with fossil gas and especially fossil gas supplied projects in the Gulf. We now face another Middle Eastern infinity war and economic collapse because of economic dependence on this part of the world.

This is great foreign policy for the Qataris: take enough market share to be indispensable and hope that keeps you safe. It worked for a time. This is now an absolute catastrophe for its customers, and it is worth completely rethinking blithe assumptions that markets can solve these problems of dangerous physical market concentration and under regulation because we now have two devastating failures in European reliance on Russian gas and now Asian reliance on the Middle East.

Major fossil exporters should be seen as global economic pimps who want to keep customers dependent both for economic rents and their own power. For some it is a mad grab to become too big to fail like Qatar, for the US it is an economic weapon they can wield against Europe and others and which no small amount of diplomatic coercion revolves around. Qatar is subtler than the current US administration but not that subtle. Countries which run an energy deficit should see this for what it is and respond appropriately - decarbonizing and taking a good hard look at risks in global energy supply.

If we are going to have to live through 1970s inflation, we should at least take some inspiration from 1970s grindhouse / blaxploitation and in particular the character of Pam Grier in the film Coffy. While I do not advocate violence the discourse around calling out fossil supply risks, coercion, endless reputation laundering through the art world and so on could be a lot more robust given the stakes. We could at least take something from the scripts of these films.

It was easy for him because he really didn’t believe it was comin’, but it ain’t gonna be easy for you, because you better believe it’s comin’!

The solution of course is modelling the problem, having buffer stocks and resilience reserves, and pushing for domestic capacity or at a bare minimum diversified capacity so that there are no critical nodes in the network.

In other news….

• David Leitch did a superb job outlining how to cut Australia’s dangerous diesel dependency and reduce emissions.

• Ultimatums from Trump, but Iran acting like Rorschach in The Watchmen.