I’m guessing their solution is for us to be even more dependent upon oil?
The issue here is that we based our entire economy around a substance that is incredibly price-volatile, run by a cartel, and is plentiful mostly in places that are unstable or hostile to us. I think it’s crazy that we’ve completely normalized the idea that fuel needs to have prices listed outside a gas station because it changes so frequently. Imagine if supermarkets had to list the price of a loaf of bread outside because it kept changing so often.
And it’s really our own fault (or at least the fault of politicians bought by oil companies) because the dangers of oil dependence were obvious at least back in the 70s.
Braess's/Pigou's Paradox that more car lanes cause more traffic was found in the 1920's. We massively overbuilt for the car regardless and keep getting worse traffic to this day.
> Braess's/Pigou's Paradox that more car lanes cause more traffic was found in the 1920's.
The paradox is that it _can_ cause worse traffic, not that it always does. American cities are built like shit for transport, but it's not as simple as "roads too big, therefore traffic". Sprawl is a much bigger (and more difficult to do ~anything about) issue.
Faster CPUs cause people to run larger programs. Egad! Nobody needs more than 100 MHz! Ban FLOP inflation now before Big Silicon makes us burn any more electricity.
The enmity between "the West" and "the middle east" goes back to the islamic colonisation era which created a religious incentive to "fight the infidels" and/or plunder and enslave them.
I challenge you to find one time period or some states/tribes which did not plunder and enslave each other throughout history. I'm fed up with all this "oh but they did it first" - everybody did it first and that's still no reason to continue doing it with the children of their children.
In ancient times everyone plundered each other unless they were allies, it was just how the world operated at the time I think it was probably more of a survival tactic "plunder or get plundered".
> guessing their solution is for us to be even more dependent upon oil?
They're competent enough to be able to model the demand destruction occuring globally.
In the meantime, given "Canada supplied the U.S. with more than 60 per cent of its crude oil imports last year," Canada's oil bonanza may not only make up for their tariff losses but actually put them into a net surplus [1].
Really. When answering the "Qui Bono?" question the lion's share of the profits go to ... the governments of countries where the oil is sold (ie. EU governments, US, ...). 2/3 of the price is pure taxes, (of those taxes 1/3 producer country, 2/3 oil using country) which adds nothing to the product.
Pretty sure at the moment their solution is to shout about this far and wide so when it actually happens they don't get lynched by the crowd.
This has never worked before. Why not? Because the government, who are responsible this time and previous times, are going to blame them because they "set the price" (except of course they set the last 1% or so of the price, which makes them a very nice profit, the 99% is the government, for example, there isn't a single EU country that doesn't levy a 80% tax on fuel, so the government could just halve the price. Could ... but won't.
This is disregarding that obviously one way to look both wars, in Ukraine, the problem is EU governments failing to come to a workable relationship with Russia, and Iran and Trump, well does it even need to be said? Despite the news, I will say that the Ukraine war in Europe is by far the bigger factor. Obviously both wars fundamentally are failures of politicians to do what they're supposedly good at, come to acceptable solutions for everyone. And this accounts for ~60% of the price of oil before any other tax ...
These taxes are part of the reason Russia and Iran are making war and every other oil nation complains constantly. They find this unfair, given that it's their oil that's being sold. They're still bound by market forces, meaning the price is determined by supply and demand like any other product, BUT supply is artificially and drastically made more expensive than it really is, and that money doesn't benefit who it benefits for every other product (ie. not the producer, not even the producer country's government). Per liter the costs are about:
~€0.25 exceptional current refining/product scarcity spread
~€0.05 ethanol/blending/product logistics/etc.
€0.23 Belgian distribution
€0.014 strategic stocks
€0.60 excise
€0.382 VAT
Who profits?
Saudi government (much better than almost all other producers): 0.46 euro per liter (of that, you can never be absolutely sure, but arguably about 0.3 euro per liter is due to EU and US politicians not managing to prevent wars with oil producers)
Oil companies REVENUE (of which 6% or so is profit): 0.25 (this 0.25 is ENTIRELY due to the wars as well, not because supply is limited but because oil companies are forced to start from inferior products) + 0.23 + 0.05 = 0.52
The total amount of the 2 above is constant, because global market, but the split between oil companies and governments varies, and is generally much worse to oil producer governments.
Standard EU government cut, taking Belgium example (because Brussels = Belgium): 0.60 + 0.382 + 0.014
The "real" oil price RIGHT NOW (with the war price hikes) is about 0.5 euros per liter. That includes the massive oil company profits. 0.46 (or less) goes to governments of oil producing nations, 0.99 goes to the government where the oil is sold as fuel. And this is being nice, counting the 0.05 ethanol as oil company revenue when this is only done because of government demands.
A great gesture would be to, say, limit the excise tax to 0.4 (which is still more than the government got 1st Jan 2023, before the governments' failures)
On the plus side, this is probably the "last hurrah" for the oil market. If/when these wars end, oil price will halve (gas prices will only come down to like 1.6, 1.7 per liter though, because excise tax never goes down). Despite that, this will still kill the energy tax for governments ... which they'll need to make up.
Hence an obvious but counterintuitive prediction: when the Ukraine war ends, EU and US governments will start taxing solar power.
Okay, you want my frank opinion on that? The job of EU politicians is to either:
1) "suck up to Russia" (or let's put it politely: have a working economic relationship with Russia)
2) actually END THE WAR, as in honestly say to people that we're going to war, because that's exactly what EU sanctions are going to accomplish, and understand that this is what 10% or more of the economy will be dedicated to that for let's say a decade, and of course, missiles will be coming in for that time.
I would even go so far to say that it seems to me likely in the extreme that Germany, and by that I mean Schroeder and Merkel, promised Russia they would be allowed to conquer Ukraine (look at their UN votes after the Crimea annexation for example) ... and obviously they didn't deliver, and that, combined with Ukraine actually managing to save themselves against German wishes, is what's making the Ukraine war happen.
The reaction of Germany to this? To prepare for war, of course. Note: war, as in marching German soldiers into war. NOT defending Ukraine.
Like in any war I've ever seen, all actors in the Ukraine war have despicable behavior. They're not "equal" morally in any shape or form, but none of the actors are behaving morally, even judged by their own morals. Russia is by far the worst, then Germany, and Ukraine is mostly a victim (but that hasn't stopped them from making a few very questionable decisions either)
My problem with sanctions is the following. Russia, when push comes to shove, is trading oil with the EU because it economically benefits them. Why do they go to war? Frankly, to avoid these taxes. If you look deep down, that's the reason.
Let's assume sanctions aren't more than Russia can handle (as in, strong enough to bring the Russian state down), and EU sanctions aren't, then what do sanctions actually do?
They increase Russia's reasons to go to war with the EU while still allowing Russia's army to become stronger. Increasing both the ability and the appetite of the Kremlin to attack. Hence, why I'm saying the sanctions are effectively trying to get Russia to start a war with the EU.
And you're not telling me anyone who's good enough of a negotiator to get into parliament or government doesn't understand this DAMN well.
Germany is purposefully causing a war between the EU and Russia because
1) it doesn't require a budget item to be approved. It's cheap.
2) they don't look like that's what they're doing. Especially not to young Germans (who will be doing all the dying), in fact they look like they're doing something to end war and get to peace
And the worst of it is: Ukraine might actually save Germany's ass, and do the dying for them. That was never part of the plan, but they'll take it, of course (while STILL saving on the expense of supporting Ukraine, of course)
How is Russia's army becoming stronger? They have lost so much people and equipment. Why would they attack EU when they can't defeat Ukraine after so many years? Are you suggesting they will perform a suicide attack against EU, cause as much damage as they can, and get absolutely destroyed in return?
Russia is making a profit under EU sanctions with oil sales to the EU, especially to Greece and Spain. If they're not using that to become stronger they are complete morons.
I can't even thank you enough. Just for speaking the truth about the complexity of it all.
Politicians are failing because majority can't even acknowledge the complexity. More worried about saving themselves then speaking candidly. There are a few that do, but sabotaged by the rest.
Currently russian war is eating close to 50% of their federal budget. That's WW2 levels of militarism for nearly zero gain (current battlefield status, not 2022-2025) and huge manpower and infrastructure losses.
> Germany is purposefully causing a war between the EU and Russia because
No, Germany does what it does because it has no strong or even good leaders and failed to adapt to current circumstances. There is no purpose.
Please remind me quickly, who invaded who already? Germany what? Maybe in 1939, but definitely not in 2014. And there was no Ribbentrop-Molotov pact between Merkel and Putin, let's stop inventing things for the sake of an imaginary argument. So on short: Russia invaded the Ukraine because why not, the Eastern Europe and more is now on fire thanks to that, and I must read here funny numbers and how Russia doesn't like sanctions (duh, that's the whole point of sanctions).
You want to assign blame through an absolute moral standard? My God. The problem is that this is war. Nobody is behaving morally, in an absolute standard (frankly even outside of war that's the case). And I can't believe a rational person would actually say that:
"So on short: Russia invaded the Ukraine because why not, ..."
Believe it or not, Putin is a mass murderer. But even a mass murderer needs a good reason to spend 70%+ of a country's total income on destroying everything in sight for 8 years flat.
And as for guilt. "Why not" in your argument, includes France, US, UK and Germany vetoing any kind of serious reaction to Russia invading and annexing Crimea despite having signed agreements they would ... and then modifying those agreements afterward. You call that moral? Especially given that it's obviously exactly this that set off the rearmament spiral that the EU is now joining.
OK you got 4 years of tenure to rebase economy on something else.
First step - you'll need copper so we can have enough generators, power for DCs, EVs, etc. Current world capacity 23 million tones per year and supplies are shaky due to concentration in rocks going down, but we need additional 10 million tons of capacity by 2035. How many copper mines are you opening? Are you going to subsidize the workers to a tune of $100 per hour?
> run by a cartel, and is plentiful mostly in places that are unstable or hostile to us.
If by "we" you mean the United States, it's worth noting that the US is a net exporter of fuel products and our net imports of crude oil have dropped a lot.
> Imagine if supermarkets had to list the price of a loaf of bread outside because it kept changing so often.
This actually happens when prices become volatile. Not long ago I could see the prices of eggs posted outside different stores on my drive home.
The issue here is that we based our entire economy around a substance that is incredibly price-volatile, run by a cartel, and is plentiful mostly in places that are unstable or hostile to us. I think it’s crazy that we’ve completely normalized the idea that fuel needs to have prices listed outside a gas station because it changes so frequently. Imagine if supermarkets had to list the price of a loaf of bread outside because it kept changing so often.
And it’s really our own fault (or at least the fault of politicians bought by oil companies) because the dangers of oil dependence were obvious at least back in the 70s.