Commentary on Political Economy

Sunday 11 February 2024

 

Tucker Carlson seemed clueless about our energy crisis. Putin certainly isn’t

The Sunday Times

Don’t know about you but I felt nauseous watching the “interview” between Tucker Carlson and Vladimir Putin. This wasn’t an opportunity to gain insight into the mind of a tyrant but a string of softball questions by a fawning supplicant with no idea of how and why he was being used. The people who’ll be most angry are those Russians not yet brainwashed by Putin’s propaganda machine, who must have been hoping that Carlson might ask one question — just one — about Putin’s claim to be a patriotic leader as he plunders the wealth of the nation in cahoots with oligarchs and cronies while millions live in squalor. Carlson isn’t a journalist; he’s a stooge.

But what was also conspicuous about the interview was Carlson’s stunning lack of insight into what’s happening in Ukraine and why Russia invaded. Yes, it’s partly to do with empire-building, but why, did he not wonder, is Ukraine so central to this objective? Why risk war for this patch of land? The explanation, I’d suggest, can be expressed in a single word: energy. Energy, after all, is central to all human activity; indeed to all life. A cheetah must gain more energy from the meat of a kill than is expended in the chase or it will eventually die. The same is true for societies. Rome declined as it ran out of wood via deforestation; the Maya civilisation was finished when it eroded its soil with agriculture. If you don’t have enough energy to serve the “metabolic” needs of a complex society, you vanish.

It perhaps goes without saying that today we live in a fossil fuel civilisation. After 12,000 years of using wood and plants for fuel, effectively relying on the flow of solar energy captured by photosynthesis, we suddenly realised we had a treasure trove of billions of tons of stored energy in the form of geologically compressed phytoplankton and plants under our feet. At first we weren’t too keen on coal — why dig for energy when you can cut down a tree? It was only when England faced deforestation that we dug out of necessity. As the scholars Joseph Tainter and Tadeusz Patzek put it: “It is one of history’s great ironies that industrialism, that great generator of economic well-being, arose in part from steps taken to alleviate resource depletion.”

For the past 200 years we have basked in this bonanza as we enjoyed exponential growth, together with a global population boom and the creation of a technological civilisation utterly different from any that went before. But here’s the hard truth: we are living in the twilight of this age. There is probably enough oil for one more century (gas for perhaps 50 years) but we are having to drill deeper and frack harder to reach what’s left. In other words, we are expending ever more energy to gain energy, like a cheetah running further to track down ever smaller prey. This is why global prices for hydrocarbons are steadily rising, albeit with fluctuations.

And here we glimpse the geopolitical significance of Ukraine. In the coming decades two things will prove crucial. First, we’ll need fossil fuels to keep the lights on in the short term; second, in the medium term we’ll need access to a wide variety of materials to build a renewable energy infrastructure (we can argue about the speed of the energy transition, but the transition itself is non-negotiable). This means that fossil fuel prices will continue to rise, providing a final windfall to suppliers (look at the money flowing to Saudi Arabia). But it also means that the price of some materials is set to spiral. These include lithium, cobalt, nickel, copper, manganese and “rare earths” like neodymium, used in electric vehicles and the magnets of wind turbines.

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It’s worth pondering this. Renewable energy may be clean at the point of delivery, but it is also materially intensive in production. An electric car can use six times more minerals than a combustion-engine equivalent, with up to 250,000kg of raw materials just for the battery. Now widen the lens to consider the staggering requirements to build wind turbines, solar panels and more at scale. You can perhaps now see why the International Energy Agency estimates that demand for lithium will rise by 2,700 to 4,300 per cent and that of cobalt and nickel by 2,500 per cent. These are the new gold.

Let’s circle back to Ukraine. Did you know that it has been described by Jonathan Maxwell in his superb book The Edge as a “mineral superpower”? Did you know it has the second-largest gas reserves in Europe after Norway? Or that the Donbas boasts one of the largest coal deposits in the world? And that Ukraine has stocks of 117 of the 120 most widely used metals and minerals, including manganese, sulphur, graphite, titanium and nickel? Did you know that one think tank has estimated the mineral wealth now under Russian control in Ukraine at $12.4 trillion, which is nearly four times the UK’s GDP (albeit the former is a stock, the latter a flow).

Now do you see the geopolitical importance of Ukraine? Carlson asked briefly about gas pipelines but grasped nothing of their significance. Russia has historically sold its gas to Europe (principally Germany), but it was already diversifying its base. Perhaps the key geopolitical fact of the world today is that China (a net energy importer) runs on 60 per cent coal and 6 per cent gas, a position it must reverse. Russia had long been preparing the ground for an invasion of Ukraine (it would, of course, have preferred to engineer a puppet government) by frantically building pipelines into China in case of of western sanctions.

Now look at the sequencing: on December 18, 2021, Russia continued its “pivot to the east” with a video conference between Putin and President Xi hailing Gazprom’s mega-pipeline across Mongolia; on February 15, 2022, the Duma passed a resolution effectively recognising Donetsk and Luhansk as Russian republics; on February 22 that year Germany finally called a halt to NordStream 2; two days later Russia invaded Ukraine. In other words, Russia’s lust for Ukraine’s energy assets coalesced into military action once it had secured gas inroads to China and judged (wrongly) that the West was too decadent and dependent to resist.

What is perhaps most astounding, however, is not merely Carlson’s ignorance of this context but that of so many pundits and politicians. It is as if we are “energy blind”. While Putin is evil, he at least grasps the material interests of his kleptocratic clique (all that waffle about ancient history is just a smokescreen); Xi’s Belt and Road initiative demonstrates similar insight. This lens also helps to explain the Wagner group’s actions in Africa, resource nationalism in Latin America and China’s cornering of the processing of critical minerals. The frantic geopolitical motion of today is calibrated to the demands of an overpopulated world of eight billion people seeking to reinvent its energy system.

Perhaps the key imperative is to wake up. Carlson is a pawn being played by forces he doesn’t understand (while raking in advertising revenue), but the West is making a succession of unforced errors. Hell, the US sold its last cobalt mine in the Democratic Republic of Congo to the Chinese in 2016 without seeming to grasp the significance. The West still has many advantages, but the noses of our politicians are pressed up so close to the ephemera of culture wars and 24-hour news that they seem incapable of stepping back and seeing the bigger picture. That picture has one fundamental constituent: energy.

It’s time to put it front and centre of everything we think and do.

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