The New World Energy Order: A Battle Of Attrition
Battles of attrition are defined as those in which opposing forces do not confront each other in direct combat with the full strength of their teams but instead aim to wear each other down over a period of time. Classical “free trade” is largely voluntary and mutually beneficial to consenting parties. But unilaterally-imposed economic policy sanctions that coerce certain desired patterns of international trade and economic exchange may be cast as attempts to win a battle of attrition.
The latest headlines in the attrition front from Germany, the epicentre of the continent’s unsettled energy geopolitics after the launch of Western sanctions on Russia, seem incredible at first sight. It was only about a month ago when what seemed a dumbfounding report by Deutsche Bank predicted that "wood will be used for heating purposes where possible." The Business Insider headlined its column “Germans could switch to wood this winter to heat their homes as Russia withholds natural gas, Deutsche Bank says”.
Last week, Bloomberg’s Javier Blas tweeted with his “chart of the day” showing GoogleGOOG +0.2% searches for firewood ("Brennholz") surging in the past two months as Germans increasingly realize that firewood (yes, firewood!) might stand between them and a freezing winter with electricity rationing “as the country braces for natural gas shortages”. Germany’s citizens — living in the world’s pre-eminent engineering nation with its flagship BMWs and Audis in manufacturing, its world leading petrochemical sector typified by behemoth BASF and much else besides — face the prospects of surviving winter as their forebears did over 2 centuries ago, huddling around a firewood hearth. Never mind that many of them, including their leaders actually belief Greta-like that continued use of fossil fuels will lead to planetary damnation (in 12 years or at mid or end of the century along a spectrum of alarm).
Russia vs “the West”
A few days after the launch of Russia’s “special military operations” in eastern Ukraine on 24th February, the U.S., U.K. and the European Union along with their closest allies (Australia, Canada, Japan, South Korea, and a few other countries) imposed the most wide-ranging economic blitzkrieg on a sovereign nation since the Second World War. The sanctions launched on Russia were meant to devastate the Russian economy and force President Vladimir Putin to sue for peace on Ukraine’s terms or even engender regime change.