We are the generation of the soundbite. The Tweet. The meme. We consume our information in tiny little pieces. And most of the time, that’s probably just fine. I don’t need to have a deep understanding of the cattle futures market to decide if I can afford the rib-eye this week or only cube steak. The price is the price and I either have the quan or I don’t.
But every once in a while, big events happen that raise questions. Politicians and pundits jump on these events and start spewing one-liners and soundbites that reinforce their echo chambers. Pretty soon we’re in a full-scale soundbite and meme war that leaves everyone confused and angry. What’s the truth?
I was thinking about this as I read snarky Twitter comments about energy independence, buying Russian oil, and gas prices. Everyone has an answer. Because I’m a dork, I decided to do some light reading on the energy sector and politics. Whew – there is no such thing as “light reading” about this subject! It is a deep, deep rabbit hole. It is hard to describe how many moving parts and global players there are in the energy world.
There are a whole variety of types of crude oil, all coming from different places in the world, all used for different things. Much of the recent increases in our purchase of Russian crude are due to fallout from previous sanctions on other countries like Venezuela, hurricanes in the gulf, and African countries not being able to ramp up production after Covid. We import foreign crude to the East and West coast because we lack the domestic infrastructure to transport our own oil. It’s actually cheaper to purchase non-US crude, than it is to send US crude to the East and West coast from the Midwest or gulf. We often purchase Russian (and other) crude because it has a higher sulfur content than US crude, which is needed for some specific refining processes. The worldwide crude oil market is a very interdependent and complex system. Even when we declared we were “energy independent”, that is a fuzzy interpretation with many moving parts that changed from month to month. We’d offset US products produced from crude and sold, against crude imports and for some quarters and depending upon what the meaning of “is”, is, we’d declare we had greater net exports vs. imports.
This led me to the issue of the current administration shutting down oil and gas leases. Come on, man – drill baby, drill! Well, they did attempt to put a moratorium on new leases in some areas. The courts shut that down. And currently… the Biden administration has outpaced the Trump administration in issuing drilling permits on public lands. Wait, wut? For example, just last fall the Biden admin completed the largest oil and gas lease in US history – 80 million acres in the Gulf of Mexico. Sigh, I’m so confused.
What’s my point? I don’t care what the Fox, CNN, or Twitter pundit says… virtually every issue you’d like to discuss is infinitely more complex than you think it is. Nothing is black and white, yes or no. It takes years for industry and policy experts to develop a real understanding of their domain. I did a tiny bit of reading this morning beyond Twitter, and quickly realized I know absolutely zero about the energy sector. It has tentacles in transportation, logistics, commodity markets, politics, money supply, production, jobs, and on and on. I think it would take at least a semester equivalent class to have at least a beginners grasp on the entirety of the market. And I think that holds true for most things in life. Geopolitics, military strategy, history, everything…
All of which is to reinforce my standard saying… Question everything. Be a Contrarian. It’s ok to endorse the Left or Right’s approach to the world. Just don’t do it blindly. They’re both equal manipulators of the narrative. And under the surface, things are often more complex than you realize.
The truth is rarely pure and never simpleOscar Wilde