Down the drain we go

And we're taking everyone with us

When France’s Emmanuel Macron announced the era of abundance is over, I honestly did not think just how abrupt the fall from abundance into scarcity would be. Yet scarcity is already here, wherever you look, confirming something many have been saying for years: cheap energy is the key to prosperity. Eliminate it and prosperity is gone.

In just the past few days there has been a flood of news reports that paint a bleak picture that I thought won’t be complete until at least November but here it is, before it’s even October.

Crippling energy bills are forcing factories across Europe to shut down. This is what the New York Times reported this week in the latest addition to a growing body of evidence Europe is nearing a brink and it is the brink to a precipice.

The report related the sad story of a French glass-making giant forced to curb operations because of high gas prices, which follows the equally sad stories of fertiliser makers in Poland, aluminium smelters in Slovakia, Germany, and France, and even not so energy-intensive industries such as food and beverages. Misery likes company and energy misery craves it.

The blows keep coming, too, and the ripples spread far and wide. Europe’s rush for oil and gas is causing a shortage of carriers. The fact that the world’s LNG fleet is limited is not news but the fact that the supply of oil tankers has shrunk considerably rightly made headlines, or at least one headline, but an important one.

The story is important not just because of what it tells us about the immediate future of oil price import bills as freight costs soar. It is important because it also reminds us that the crisis did not start on February 24.

It started years before as investment in more oil exploration began to shrink under the heat of the energy transition push. Tanker builders naturally followed by curbing their capacity growth plans. Now, we are reaping what we sowed. And food shortages just moved from likely to guaranteed.