The petrochemical pandemic
By Dmitry Orlov
I wonder, at what point will it become obvious to a critical fraction of people that the problem being addressed by shutdowns, lockdowns, curfews and various other supposedly epidemic control measures, which are really consumption suppression measures,is not epidemiological but petrochemical, driven by the need to curtail the consumption of oil in a systematic and symmetrical manner? After all, this has become obvious to me already. Can it really be that I am alone? Please allow me to clue you in.
Backing up a bit, from the point of view of transnational capitalism, the world is there simply to provide it with resources and services from which to generate profits. Its view of the natural world demonstrates a striking mental deficit: an inability to see limits. Until it runs up against them, it simply can't see them and assumes that resources are infinite. And when it does run up against them, it invariably treats the problem as a financial problem and throws money at it, which can usually be printed into existence by a suitably cooperative central bank. Obviously, it sees the notional printing press as another inexhaustible resource, as evidenced by a long series of bouts of hyperinflation in countries around the world.
Thus, when in July of 2008 oil prices spiked to nearly $150/barrel, it was automatically assumed that the problem had nothing to do with resource depletion but was entirely due to lack of investment in the oil industry. As oil from conventional oil wells on land grew scarce, it threw money at offshore drilling, tar sands, fracking and other relatively more expensive resources, printing it into existence as needed. Surely enough, increased investment eventually resulted in increased production and a glutted oil market, but the fact that the increased investment became necessary had everything to do with resource depletion: the resources that could be produced most cheaply were the first to be produced and the first to be depleted. What's more, the effect of increased investment was temporary; like rust, depletion never sleeps, and at some point the level of spending needed to maintain production becomes impossible to sustain.
Fast-forward to August of 2019, when it suddenly turned out that US federal debt instruments, previously thought to be as good as gold, could no longer be used as collateral for overnight loans between banks without paying exorbitant interest. At around the same time it became clear that further production of US shale oil, which for a brief moment allowed the US to once again become the world’s largest oil producer, is not only a net waste of money but is also depleting too rapidly to be sustained. Falling oil production in the US and supposedly voluntary production cuts by Saudi Arabia (whose fields are huge but very old) have left Russia as the swing producer, able to control oil prices at its pleasure. Worse than that, the Russians are furiously building petrochemical and other plants because they plan to stop exporting oil and switch to making and exporting value-added products. For instance, they plan to grab a third of the world market in polyethylene plastic.
Since the level of oil consumption directly determines the level of overall economic activity, if more oil can neither be produced nor purchased, then oil consumption hasto be reduced. Once that realization sunk in some time around December 2019, the collective corporate boardroom and their putatively democratically elected minions in Western national governments have turned to suppressing public consumption through the imposition of social controls. A wonderful interim solution was found in the form of a not particularly deadly flu virus. Borders were closed and lockdowns were imposed, shutting down tourism and much of the service sector. As the economic crisis grows more severe, mutant strains of this not particularly deadly flu virus are being discovered around the world and are being used to justify further restrictions on consumption in the countries that lack financial and physical resources to continue functioning as before.
This strategy is becoming more difficult to sell to the general public as researchers around the world are discovering that the rationales for imposing social controls are not justifiable as public health measures. No evidence has been found that shutting down schools and playgrounds has affected the course of the epidemic. No evidence has been found that asymptomatic (i.e., healthy) individuals are able to spread the virus. Nor can it be proven that so-called lockdowns (a US prison term for locking inmates in their cells for their own protection) have been at all effective. The commonly used PCR test produces many false positives that make it at best misleading as a screening test for a mostly healthy population, and at worst a bit of political technology: the Ct parameter of the PCR test can be used as a knob to set the intended number of false positive results. Evidence is as yet inconclusive, but it seems likely that it will eventually be proven that mask-wearing by healthy (now called“asymptomatic”) individuals does more harm than good by incubating and helping spread bacteria. The response to the appearance of such research findings has been to impose strict controls on social media, attempting to stop the spread of such subversive ideas, and attempting to suppress demonstrations and riots by people opposed to being oppressed in this fashion, because the information does leak out.
Finally, allow me to explain why shutdowns, lockdowns, curfewsand various other supposedly epidemic control measures, which are really consumption suppression measures, are driven by the need to curtail the consumption of oil in a symmetrical manner.Approximately half of each barrel of oil is processed into gasoline, used in cars and other small engines; the remaining half is processed into distillates—diesel, jet fuel, bunker fuel for ships and heating oil. In order for the petroleum industry to continue functioning smoothly, to remain profitable and to avoid accumulating unsold inventory, the demand destruction for these two types of products has to be symmetrical; thus, preventing people from flying (saving on jet fuel) has to be balanced against preventing people from driving to work (saving on gasoline). The corporate boardroom-based mechanism by which such petroleum industry logistical issues are being translated into supposedly medically motivated public safety pronouncements remains a mystery.If somebody at some point leaks a computer model that makes it possible to turn knobs on lockdowns, business closings, curfews and border closings in order to adjust and balance the consumption of gasoline and petroleum distillates, then we'll have our smoking gun.