Are you familiar with the work of Peter Zeihan?

He runs a geo-political consultancy after leaving Stratfor ten years ago. You can see him wiping the floor with Joseph Nye on Youtube.

I've found him very illuminating looking at things from a Demographics and Geography first, food & Oil production second perspective. Here's a sample from 20 minutes ago;

The End of Russian Oil

By Peter Zeihan on March 18, 2022

This newsletter is an adapted excerpt from Peter's upcoming book, The End of the World is Just the Beginning.

Think the Europeans will need to get by without Russian crude? You are 100% correct. But you are not thinking anywhere near big enough.

Most of Russia’s oil fields are both old and extraordinarily remote from Russia’s customers. Fields in the North Caucasus are either tapped out or were never refurbished in the aftermath of the Chechen Wars, those of Russia’s Tatarstan and Bashkortostan provinces are well past their peak, and even western Siberian fields have been showing diminishing returns since the 2000s. With few exceptions, Russia’s oil discoveries of the last decade or three are deeper, smaller, more technically challenging, and even farther from population centers than the older fields they would be expected to replace. Russian output isn’t in danger of collapsing, but maintaining output will require more infrastructure, far higher up-front costs, and ongoing technical love and care to prevent steady output declines from becoming something far worse.

While the Russians are no slouches when it comes to oil field knowledge, they were out of circulation from roughly 1940 through 2000. Oil technology came a long way in those sixty years. Foreign firms—most notably supermajors BP and Shell, and services firms Halliburton and Schlumberger—have collectively done work that is probably responsible for half of Russia’s contemporary output.

The Western supermajors have left. All of them. Just as the Ukraine War began, Exxon and BP and Shell have walked away from projects they’ve sunk tens of billions of dollars into, knowing full well they won’t get a cent of compensation. Halliburton and Schlumberger’s operations today are a shadow of what they were before Russia’s previous invasion of Ukraine in 2014. Between future sanctions or the inability of the Russians to pay them with hard currency, those operations now risk winding down to zero. The result is as inevitable as it is damning: at least a 50% reduction in the ability of Russia to produce crude. (No. Chinese oilmen cannot hope to keep things flowing. The Chinese are worse in this space than the Russians.) The outstanding question is how soon?

Sooner than you think. It’s an issue of infrastructure and climate.

First, infrastructure. All of Russia’s oil flows first travel by pipe—in some cases for literally thousands of miles—before they reach either a customer or a discharge port. Pipes can’t . . . dodge. Anything that impedes a single inch of a pipe shuts the whole thing down. In the post-Cold War globalized Order when we all got along, this was something we could sing-song-skip right by. But with the Russians dropping cluster bombs on civilian targets - as they started doing on Feb 28 - not so much. Whether the Russians destroy the pipes with their indiscriminate use of ordinance (like they damaged a radiation containment vessel at Chernobyl!!!) or Ukrainian partisans target anything that brings the Russians income, much of this system is doomed.

Second, climate. Siberia, despite getting cold enough to literally freeze your nose off in October, doesn’t get cold enough. Most Russian oil production is in the permafrost, and for most of the summer the permafrost is inaccessible because its top layer melts into a messy, horizon-spanning swamp. What the Russians do is wait for the land to freeze, and then build dike-roads and drill for crude in the long dark of the Siberian winter. Should something happen to consumption of Russian crude oil or any of the millions of feet of pipe that take that crude from wellhead to port or consumer, flows would back up through the literally thousands of miles of pipes right up to the drill site. There is no place to store the stuff. Russia would just need to shut everything down. Turning it back on would require manually checking everything, all the way from well to border.

The last time this happened was the Soviet collapse in 1989. It took millions of manhours of help from the likes of BP and Halliburton – and thirty-two years – for Russia to get back to its Cold War production levels. And now, with war on in Ukraine, insurance companies are cancelling policies for tankers carrying anything Russian on Seas Black and Baltic while the French seize Russian vessels, and the Russian Central Bank under the strictest financial sanctions ever, it is all falling apart. Again.

Even in the sunshine and unicorn scenario that Putin duct tapes himself to a lawn chair and throws himself into a pool, and a random band of kindly kindergarten teachers take over the Russian government, we should not expect the energy supply situation in Russia to begin to stabilize before 2028, and for us to return to what we think of as the status quo before 2045.

In the meantime, the debate of the moment is expanded energy sanctions. Once everyone concludes that Russian crude is going away regardless, there’s something to be said about pre-emptively sanctioning Russian energy before reality forces the same end result. Moral high road and all that. Bottom line: Uuuuugh! The disappearance of some four to five million Russian barrels of daily crude production will all by itself kick energy prices up to at least $170 a barrel. A global energy-induced depression is in the wind.

But probably not an American one. In the bad ol’ days before World War II there wasn’t a “global” oil price. Each major country or empire controlled its own production and maintained its own - sequestered - market. Courtesy of the American shale revolution and preexisting legislation, the U.S. president has the authority to end American oil exports on a whim and return us to that world. An American export ban would flood U.S. refiners with relatively cheap shale oil. Those refiners will certainly bitch - their facilities have a taste for crude grades different from what comes out of Texas and North Dakota - but having a functional price ceiling within the United States of roughly $70 a barrel will achieve precisely what Joe Biden is after: cheaper gasoline prices.

The rest of the world? They’ll have to grapple with losing Russian and American crude at the same time. If the “global” price stays below $200, I’d be shocked.

The first rule of geopolitics is place matters. To populations. To transport. To finance. To agriculture. To energy. To everything. The second rule is things can always get worse. The world is about to (re)learn both lessons, good and hard.

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Mar 19, 2022Liked by Dominic Cummings

I thought this was your most interesting piece yet, thank you (I suspect you won’t get as many clicks as your Westminster posts sadly!). It’s not a new opinion but the assumption of rational actors - still so powerful in econ, IR etc - feels to me such a blockage to progress in the study of human affairs in many fields. Hard to see how we get beyond it though - there was an interesting article recently on why agent based modelling hadn’t taken off in econ that was useful on this. On nuclear you might have seen this on US war games viz a Russian nuclear strike https://slate.com/news-and-politics/2020/02/low-yield-warhead-nuclear-weapons-navy-trident-submarines.html?utm_medium=social&utm_campaign=traffic&utm_source=article&utm_content=twitter_share I think given the high stakes for Putin and the determined resistance of the Ukrainians the probability of RU using a limited nuclear strike in UKR is unlikely but underpriced if we’re still in this attritional phase for many more weeks. Haven’t seen any prediction markets on it but would be tempted to put probability ~25%?

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On Taiwan,

What I think we have learnt from Ukraine is that yes, it is right to assume that US does not care about this far away regional dispute between a potential military rival (Russia) and their satellite (Ukraine).

US will not go to war with Russia over Ukraine because USA does not sufficiently care about Ukraine. HOWEVER, the US has seized on the opportunity to push Russia (who American’s do care about outcompeting) onto a well placed land mine.

China must observe the Ukrainian war and think…

… USA will not fight for Taiwan, that is clear, but USA will sure as hell make taking control of Taiwan unbearably expensive for China. US will flood Taiwan with the rock to China’s scissors. America will gift Taiwan all the weapons it needs to go down in a burning fireball taking China with it.

Putin is behaving rationally within the context of the Russian national identity. US does not care about Ukraine, but it does care about ruining Russia and knocking them back from a repeat of the USSR. Xi is behaving rationally within the context of Chinese identity when he makes plans for Taiwan.

Russia is sure to take Ukraine, nobody seriously doubts that. But the US is doing everything possible to steer the conflict towards a Pyrrhic victory for Putin.

US is certain to do exactly the same with Taiwan. These territorial satellites have been crafted into carefully designed poisoned pills. They are military and political claymores. Everyone can see what must happen, what various national identities demand in exchange for consent to rule over them.

China will take it’s poison too. When China invades Taiwan the Taiwanese will be implored to fight to the death as we arm them to the teeth. Such conflicts take an entire generation to pay for.

China taking Taiwan might give USA an extra 25 years of hegemony. When you consider all of this it pushes Taiwan far down the agenda for China. China would need to be a safe distance ahead of USA both economically and militarily to take Taiwan and not concede hegemony status to USA.

These are the kinds of lessons being learnt last week, this week, next week. The goals and objectives of world powers are shifting. A new equilibrium is taking shape.

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Rambling thoughts from memory (there might me inaccuracies) , Blair announced a reduction in our warheads to 190 odd… then in 2020, out of the blue, it was announced in Parliament that the UK was increasing its warheads to 260 odd…?

Some time during the pandemic new launch tubes for the new Trident Life Extension were delivered, ostensibly for the new Dreadnought submarines planned to come into service after 2030.

But in my opinion, secretly, our existing nuclear deterrent has already been partially upgraded to the Trident Life Extension, and already equipped with new warheads.

In around 2006, a US admiral revealed plans for new types of warheads. And from what I’ve been told, the UK *was* at that time, streets ahead of the US in warhead yield and design.

For some reason, there has been an awful rush to get some sort of nuclear deterrence upgrade in place in the last 2-3 years… coinciding with a sudden and unexplained increase in our number of warheads… it all seemed a bit weird, hasty, and unsettling to me. (However, some or all of these observations and occurrences might be inaccurate, or have been deliberate misinformation.)

HMG just doesn’t seem very interested in what’s going on at home… I don’t know why… it seems it’s eyes are elsewhere, and have been since 2019… I don’t much like it. It’s unsettling, I hope there are no more great game foreign policy plans waiting in the wings to leap out and surprise us.

Anyway, Boris’s recent rebuff by the UAE over their planned P&O shutdown, and then UAE’s later announcement of support for Russia in Moscow, has filled me with hope that this Ukraine plan, may be coming to an end. That cooler heads might prevail, that London is being directed to encourage it’s Ukrainian allies, to genuinely de-escalate, and seek some type of settlement.

Ramble over…

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Great article Dom. Tim Geithner said after the collapse of LTCM that the issues had been a 'failure of imagination'. I see this failure of imagination rife in most educated westerners. They've never been properly mugged by reality. There is a complacency in secularism that assumes the self-evidence of it's conclusions (as though every other system of thought doesn't think the same thing!) which leaves it wide open to shocks like those detailed above.

The final part on AI and rationality also highlights the importance of subjects like philosophy when dealing with politics. Anyone who has properly looked into ontology understands that rationality and 'logic' are loose at both ends. Hume coined this the 'is/ought' distinction but it is a concept that thinkers throughout history have run into. Variants include the duen-quine hypothesis, the munchausen trilemma and in some ways Godels famous proofs. If you understand this, its much easier to understand people who don't appear to make sense.

Thankfully for us the world does not just exist in syllogistic reasoning, even if midwit elites still believe otherwise.

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Oh, and speaking of machine learning and potential catastrophes, this paper seems squarely within your interests:

"AI suggested 40,000 new possible chemical weapons in just six hours"


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One message that comes out from reading body’s acolytes and guys from skunkworks like Ben rich is that we should buy slightly less luxury kit but a lot more of it. Is this something you looked at while in Downing Street? Obviously in a war lots of equipment is lost so spending 150 mil on a jet is absurd. Surely just buying kit off the shelf eg the leopard tank instead of trying to rebuild the challenger or buying a bunch of f-16 would be a lot cheaper andwould solve a lot of problems?

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I've always liked the idea of irrationality and appearing and sometimes even behaving irrationally. I recall an enjoyable moment when arguing with a lawyer on a contract where I was to be employed as part of a major transaction and they were trying to insert on a clause that said I could be dismissed if I lost my mental capacity. Their perception was that no rational person could refuse such a clause. I refused stating that a condition of the deal was that I reserved my right to go stark raving bonkers. If they didn't accept that then there was no deal. They backed down. On the blog - I totally agree. The best defence is great defence.

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Brilliantly and depressingly illuminating ☹️

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*sidles up to Dom's blog, pokes it a couple of times*

You alive, boss?

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Sorry to go off piste here: WTF was The Trolley thinking when he likened the Ukraine war to Brexit? Does he wake up every morning and think “How can I be an even bigger, pulsating, septic, bellend today?” We need European / Western alliance unity more than ever.

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Dc, since last week following your blog post. I can confirm the following:

- Putin evaporated Covid-19 within 48 hours

- Putin has created allies out of India and Pakistan(both obviously nuclear powers and has never happened since partition)

- Putin has created the opportunity to default on all debt(especially Europe)

- Putin has began the decline of USD as reserve currency via oil trade/ SWIFT system being replaced

- Putin has confirmed the “West” will confiscate ANYONES ASSETS irrespective as they have now set the standards

-Switzerland is no longer neutral, even Hitier could not achieve this feat; where do we think the capital will go for safety?

- Putin deserves a Nobel peace prize for achieving the alignment of so many disparate states that had no chance of alignment for the next 100 years minimum, creating global competition which has not been the case since WW2, created total distrust throughout society via “misinformation”/ “information”, he has penetrated the entire west from a top down and bottom up position, distrust is prevalent

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Thank you for the response. Yes I do remember the Trump speech at the UN which was scoffed at! Perhaps not so amusing now, especially considering it came from Trumps mouth. I agree it can be rather challenging to quantify especially since the UKR incursion (Russia selling to India which in turn marks up on the sell side).

Further to this conversation it has come to light that Nordstreams 1 & 2 are ALLEGEDLY both offline.

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Thank you for the response. Yes I do remember the Trump speech at the UN which was scoffed at! Perhaps not so amusing now, especially considering it came from Trumps mouth. I agree it can be rather challenging to quantify especially since the UKR incursion (Russia selling to India which in turn marks up on the sell side).

Further to this conversation it has come to light that Nordstreams 1 & 2 are ALLEGEDLY both offline.

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Dc, outstanding dialectic!

Especially input and output differentials within China and Russia, which promulgate into response. Psychology and behavioural understanding is sorely missing in politics and economics. In the subcontinent sometimes saying yes actually means no/ maybe and vice versa (context dependant)!

What do you think from your analysis what Russia has wanted post USSR from a roof down political position and a bottom up political position?

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On the subject of Anami and the Japanese surrender during WW2, I wonder what you think of the claim that the Soviet invasion of Manchuria was the decisive event in ending the war.

The pitch is that when the bomb dropped, it was merely one more destroyed city on a list of over 65; it did not change the Army's position that better terms could be achieved by inflicting huge casualties on the Americans in a land battle on the island.

By contrast, the entrance of the Soviets into the war did several things:

A) It cut off their supplies from the mainland, reducing Japan to virtually zero resources.

B) Resisting both the Soviets and the Americans in an invasion would have been impossible.

C) It eliminated the Soviets as an arbiter of a peace agreement between Japan and the US.

D) It raised the prospect of a Soviet occupation of Japan, which was scarier than an American occupation.

In short, the Japanese war plans and hope for good terms rested on the assumption of Soviet neutrality, and when that went away they understood they were out of options.

This has been hard to disentangle because news of the second bomb arrived just hours after news of the Soviets invading Manchuria, but we can tell that the high command did not react strongly to the first bombing, and did react strongly to the Soviets entering the war.

The argument is advanced in the book Racing the Enemy: Truman, Stalin, and the Surrender of Japan, by Tsuyoshi Hasegawa.

Here is a precis from an AskHistorians thread: https://www.reddit.com/r/AskHistorians/comments/1y5g5j/comment/cfhn459/?utm_source=share&utm_medium=web2x&context=3

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