Painted Into A Corner

                                                                                           written 5 April, 2026

                                                                                     published 12 April, 2026

 

            On April Fool's Day, the president gave a speech about his war of choice in Iran.  It was mercifully short, running only 19 minutes.  He repeated many of his previous statements, with little news.  

            Iran was about to attack us with nuclear tipped missiles.  Nobody had the courage to remove Iran before him.  Our military has totally demolished Iran's military capacity.  We have already won, but need maybe another month to finish the project.  He may attack on the ground, or he may just declare victory and leave.  We don't need to open the Straits of Hormuz, because we have more oil than anyone else.  The Straits will open by themselves, and gasoline prices will quickly return to normal.  

            He clearly wants this to be over, but wishing doesn't make it so.  He has always been delusional.  In his first term he promised Covid would quickly go away by itself.  

            Even though we outspend Iran 1,000 to 1, they recently shot down 2 US jets and still attack shipping in the Straits, allowing only 5 percent of the transits relative to pre-war levels.  This poorly planned war has abruptly removed almost one fifth of the fossil fuels from the market, affecting the entire world.

            As I write, a gallon of Chevron regular in Ukiah is now $5.69, and diesel is $7.65.  Jet fuel has doubled in cost, forcing drastic reductions in flights.  United Airlines is expecting these high prices to last through 2027.  But these increases are based on expected future costs, not yet reflecting actual lack of crude oil availability.

            Since most oil takes as much as a month in transit, real shortages are only now beginning to hit the global economy, and prices could soon jump much higher.  Some countries are already cutting back their economies to survive on what fuel is available.  The longer this closure lasts, the worse it will all get.  

            The president was correct when he stated the US produces more oil than any other country, 13.6 million barrels a day.  But he lied when he said we are energy independent, because we consume 20 million barrels per day.  Much of our current production is fracked oil, which is too light to refine into diesel without adding imported heavy oil.  Furthermore, our refineries are tailored to the historic blends in place when they were built, and can't be easily shifted to refine a different mix of fuels.  As a result, we are required to import significant amounts of oil, even if little of that oil comes through the Straits of Hormuz.

            However, it is foolish to think that domestic oil will only be sold to domestic buyers.  Oil companies are capitalists, serving shareholders, not consumers, and will sell to the highest bidders, no matter where they live.

            Fossil fuels are not the only essential materials being choked off with the Straits closed.  Global supplies of phosphate, helium, and ammonia are down 30 percent, with sulfur down 45 percent and urea down 50 percent.  These are critical for production of plastics, pharmaceuticals, semiconductors, and fertilizer for food.  Domestic agriculture is being hit by excessive costs due to tariffs, rising prices on diesel, and now expensive fertilizer, yet the price of their product is fixed.  Iran holds an asymmetrical advantage. 

            There are several energy alternatives, but none can respond rapidly enough to supply the abrupt shortfall.  Conventional nuclear takes a decade.  Small modular reactors don't actually exist yet.  New oil, natural gas, and coal production also take time.  Solar is the quickest, but even that is inadequate.  Reducing consumption by reducing the size of the economy (recession), seems to be the only option.

            With arrogance and contempt for opinions other than his own, the president has painted himself into a corner, and risks crashing the global economy.  His options are very limited.  

            Expanding the war with "boots on the ground" will be expensive, bloody, of unknown duration, massively unpopular, with unexpected consequences.  Declaring victory and walking away with the Straits still closed leaves the global economy in shambles and destroys America's reputation.  Who will trust such a short-sighted leader?  He could surrender and admit his mistake, taking responsibility for what he did, which would be a first for a world superpower.  But his fragile ego won't allow him to take this path.     

            Perhaps enough Republicans will find the courage to remove him as incompetent before he destroys everything.  What are the odds?

  

 

 

 

 

 

 

 

 

Unintended Consequences

                                                                                       written 29 March, 2026

                                                                                       published 5 April, 2026

 

            I became aware of the climate crisis 30 years ago.  Science has blind spots, but I believe it is a relevant portrayal of physical reality.  The computer I use to write this and the electricity I take for granted, validate the scientific perspective.  Science says we are cooking our planet.  Our president says the climate crisis is a hoax.  In my opinion, he is a liar and/or a fool.  

            But to give him credit, he is a charming huckster, telling people what they want to hear, unrestrained by reality.  This extends well past his core MAGA minority.  One evening, stumped by Iran's continued resistance, the president threated to destroy their civilian infrastructure (a war crime), if they didn't open the Straits to shipping within 48 hours.  The price of oil jumped and the stock market dropped, because people believed he would escalate the war.  

            A few hours before the deadline expired, the president relented, extending his ultimatum for five more days, stating that Iran had begun negotiations and "reached significant agreements".  The price of oil dropped and stocks went up, because people believed him.  It is important to note that millions of dollars were made on this swing, indicating insider trading.  However, within a few minutes of the president's "agreement" announcement, Iran said there were no such talks.  

            For the moment, the US plans to hold off attacking for another 10 days.  This is probably true, not because negotiations are happening, but perhaps because the additional troops moving into the area are still in transit.  

            Speculation about what, where, and the duration of a US ground attack are all over the place.  But history and experienced voices suggest it won't be quick or bloodless, and could expand the war uncontrollably.  Meanwhile, now into the second month, shipping through the Straits is just a fraction of the former volume.

            Much like the boy who cried "wolf", people are finally beginning to distrust the president.  Once a person is recognized as a liar, they begin to lose power.  The stock market has now continued to drop, the price of oil has begun to climb again, and retail gasoline and diesel prices keep inching higher every week.  

            One relatively unmentioned consequence of this war is the impact on the AI building frenzy.  Manufacture of the advanced microchips essential for this boom involve over 1,000 different companies, in 70 different countries.  Critical materials are now blocked, and shipping cost for everything are now greater, making the delivery and economics much more uncertain.  

            Even before the war, the AI investment boom was getting shacky because investors want more immediate financial return on their massive investments.  To support the AI fantasy, data centers need to be built more rapidly than construction of energy systems can supply.  The concerns about the enormous energy AI centers require will increase now that fossil fuels are more expensive.  

            The AI economic frenzy is an elaborate house of cards, carefully balanced on assumptions of stability and predictability, which has just been hit by the reality shock of war.  When the AI financial bubble pops, the stock market will react much like when the 2007 housing bubble popped.  This could happen before the November elections.

            Another consequence of this war is the shift away from oil trades denominated in US dollars, which has been the industry standard for over 50 years, an enormous economic advantage for the US.  However, our risky debt structure, our recent erratic political actions, and the slow change in global power dynamics, make the dollar less attractive, and it is being replaced by the Chinese yuan.  This probably won't be a complete shift, but the US monopoly may have already been broken. 

            While the war has captivated the news cycle the climate crisis hasn't gone away just because the president said so.  Atmospheric CO2 content is now 431ppm, a more than 50 percent increase from preindustrial times.  This size shift moved us from the last ice age to the present interglacial period when human civilization developed.  But the current shift is happening 10 time faster.

            We had June heat in March, melting the snow, drying the land, setting the stage for a busy fire summer.  Hawaii has been flooded.  The mid-west is on fire.  The northeast is buried in snow.  Corpus Christi, Texas is running out of water, and Phoenix, Arizona is getting close.

            The climate crisis is not a hoax, but our stable genius president is.