Peter is a New York Times bestselling author whose first three books — The Accidental Superpower, The Absent Superpower and Disunited Nations — have been recommended by Mitt Romney, Fareed Zakaria and Ian Bremmer. Peter is also a highly sought after public speaker. With a keen eye toward what will drive tomorrow’s headlines, his irreverent approach transforms topics that are normally dense and heavy into accessible, relevant takeaways for audiences of all types.
Efficiency precision speed Effectiveness accuracy all these and more are things we think of as characteristically German here’s another one dying Europe faces the reintroduction of a Germany desperate to preserve its postwar gains in an environment where mere survival is beyond its ability from an economic point of view Germany’s geography is too
Good between the rine Elba odor danu and a half dozen minor Rivers Germany boasts about 2,000 Mi of natural Waterway the rine and Elba access the North Sea the odor empties to the Baltic and the danu winds to the black and from there the Mediterranean Germany’s River Footprints
Grant it the best economic access of any territory in Europe but what makes sense economically does not always make sense in other ways squatting squarely amid the Elba rine and upper danu are Germany’s Central Uplands a rug rugged densely forested Mountain knot that resists infrastructure even in the 21st
Century Germans tend to live in an inverted V roughly following the rine and Elba arcing around the central Uplands German lands are traditionally both Europe’s richest lands and their most separated the lands at Germany’s edges are its core territories historically other more Consolidated European powers have had a breezy time of taking what
They want from the Germans the early dealt with this the only way they could by organizing into something better a stronger educational system a better Workforce more reliable financing more productive Manufacturing Systems yet the geographic separation of the central Uplands made it impossible for the pre-industrial Germans to do
This at the national level Civic governments became responsible for issues of finance and infrastructure and education and foreign policy normally reserved for National authorities Germany’s independent city states tend ended to develop organizational capabilities at the local level far superior to those at the national level of their much larger neighbors excellent
Civil government is part and parcel of what it means to be German for most of German history there was no Germany identities and competencies were a strictly local and Regional Affair nearly all German cities have a lengthy stretch in their past in which they were the core of a small German Kingdom only
The most successful of these German statelets Prussia a heavily militarized state that originated in the northeastern German lands ever got big enough to achieve any economies of scale the arrival of the Industrial Technologies in German lands in the 1840s and 1850s found fertile ground in dozens of advanced cities that could all
Apply all the Technologies all at once among the first things this constellation of German Urban regions did was run Industrial Road and rail links to one another German industrialization made German UNIF ification not only possible but inevitable some German communities used to functioning as independent Powers resisted so did all the Germans
Neighbors who rather enjoyed having shattered easily exploitable people next door but with New Roads and rails enabling direct interg Commerce and cultural consolidation they were denying reality between 1864 and 1871 the various German statelets found themselves on multiple sides of three major Wars by the end of 187 1 it was
All over a unified Germany was finally born the fusing of Germany’s industrialization and unification processes shaped Europe’s next several decades contemporary Germany’s biggest problem is demographic when Germany industrialized the entire country did so at once which means it also urbanized all at once which means the German birth rate started falling throughout German
Lands all at once and it never stopped birth rates might tick up on occasion during economic booms but with most Germans living in cramped conditions there’s a big difference between deciding to try for a second kid and a third one about the only thing that encourages people to have more kids is
For people to have more space that’s why Germany did have a baby boomlet during a period they understandably don’t enjoy discussing the Laban realm era of the late 1930s when Germany was busy annexing its neighbors and getting physically bigger Germany’s World War II de feat wasn’t simply economically culturally and militarily jarring it
Physically reduced the size of post-war Germany by roughly a quarter the post-war governments of Germany’s neighbors forcibly ejected the Germans living in the formerly German lands post-war German authorities almost universally settled these expell who accounted for about 18% of the population of the combined West Germany and East Germany in Urban Apartments
With little space for living much less procreating contemporary German social stability is predicated upon a generous Ironclad Cradle to grave system of government services Germany has been able to afford it because of a triple quirk in its demographic structure both East and West Germany enjoyed a brief Baby Boom between 1955 and
1965 that generation has been working and paying taxes for decades and in the 2010s is at the height of its earning and taxpaying years Germany’s Boomers didn’t have many children circumscribing expenses for service like primary education and child care the state instead directs the savings into value added items like higher education and
Infrastructure some 8 million Germans died in the world wars gutting populations that would have been retirees in the 1970s 1980s 1990s and 2000s High tax receipts plus few dependents equals excellent government finances but this golden age of high tax receipts and low government payouts is ending with the exception of the labens
Realm German reproductive rates have been edging down for 16 decades and are now far past terminal the nearly childless German baby boomer generation enters Mass retirement in the 2020s cursing contemporary Germany with a collapse in productive capacity a collapse in tax receipts a collapse in consumption and an explosion of State
Outlays for pensions and Healthcare as soon as 2030 the Young Generation entering the workforce will be less than half the size of the boomer generation retiring in any normal country this would spell economic and social failure such ruin assumes that economic Trends in Germany are positive the Quest
For efficiency and quality so Central to German identity comes at a cost all those local and Regional German governments try to capture private savings to fund Community goals leaving little in the way of financial resources for the development of a consumption Centric culture beir high production with low consumption and the only option
Is to export the difference late 1800s Imperial Germany was able to absorb its output because then like 1990s China Germany was industrializing but by 1900 over half the population had moved off the farm making it the world’s first majority urbanized country an achievement yes but there was nowhere
Else for its production to go except abroad the mix of overproduction and subsequent Imperial trade barriers ensured a Litany of recessions price crashes and general economic dislocation European Interstate competition already political became deeply economic as well it was only a matter of time until it became strategic the first of those
Strategic competitions World War I ended with German defeat and kicked off The Great Depression which struck nowhere worse than where it started in Germany Americana tells Tales of depression IR a city Folk returning to the Farms to work the land during the depression’s deepest years not so in Germany where the
Majority of Germans had been living in cities for decades the only thing the Germans could do to keep cost down was to not have children Germany’s post Cold War unification was a phenomenal National Achievement but that doesn’t mean there were no side effects the new national government decreed that the value of the
Former West and East German currencies would be broadly equalized despite the east’s far less Advanced Industrial plans the valuation decision aimed to preserve the personal savings of the former East Germans a political necessity in savings driven Germany but it has gutted the competitiveness of the East German economy ever since not only
Did this haunt the Germans with Echoes of the sort of dislocation and unemployment they experienced during the Great Depression but family formation and from it birth rates in the former East crashed and never recovered there is never a good time to have a terminal demography but cont temporary European
Economic Trends argue for now being among the worst a rapidly shrinking working age population paying a higher tax rate to support an Ever larger retiree population means Germany’s already weak ability to absorb its own production weakens further it is more important than ever for the Germans to have a place to send their
Wares Germany’s biggest exports by value are automotive with 80% of the cars Germans manufacture at home being sold outside of Germany the European Union is no longer that place while few countries have as poor a demographic structure as Germany most of those in the running are also within the
European Union the rest of Europe has aged Beyond being able to serve Germany as an export sync Europe isn’t economically capable of filling that role even if its demographics were healthy at least some portion of the continent has been in recession at any given time between 2007 and 2020 because
The Germans provided the largest chunk of the financial assistance required to bail out the eu’s failing members but Berlin conditioned that support on budget cuts Europe’s weaker countries are Europe’s weaker countries because they lack Germany’s Sublime economic geography the state spending of these weaker States is part of what helped
Those weaker States closed the Gap with the Germans German imposed austerity gutted growth potential and from it Europe’s capacity to absorb German products northern Europe with all its flats and seas is a rough and tumble region with everyone in everyone else’s face all the time Germans right in the
Middle of it all have little choice but to treat military issues the same way they treat everything else by being better Germany’s very strength invites panicked challenge the rise and fall and rise and fall of Germany is European history the only way the Europeans have ever discovered to prevent this never
Ending cycle of Wars is to change the game to bring in an external security garant tour who forces everyone to be on the same side in Europe the institution that operationalizes the American Le order is the North Atlantic Treaty Organization the NATO alliance shoehorned All European militaries Germany included into a single command
And logistical structure under American strategic and operational Authority NATO’s twin goals were to force an internal Western European peace while also securing Western Europe against Soviet aggression as Hastings is May NATO’s first Secretary General so famously put it the alliance’s race on debt was to keep the Americans in the
Russians out and the Germans down with the cold War’s end Germany entered the best of all possible World NATO expanded into the former Soviet Empire surrounding Germany with allies Germany’s military ceased being relevant largely because it ceased existing repeated past the bone budget gouging functionally eliminating ated all German
Air Naval and armored deployment capacity for all intents and purposes Germany no longer has a military from 1990 until 2020 this has been fine after all German didn’t face major security threats and so the spotlight shifted from NATO to the parallel European institution formed by the Europeans themselves the European
Union unlike NATO which benefits from a very large and InCharge leader and a crystalclear founding goal the e U tends to muddle through is it an economic Union a financial Union a political union a counterweight to the United States a free trade zone as of early
2020 the EU has 27 members the British left the EU in 2019 and if you ask the eu’s collective leadership any of these questions you will get at least a half dozen different answers and that’s before getting down to the nitty-gritty details of Bank bailout or debt levels
Or negotiating Authority or or political Norms or voting parameters even relatively mild disputes require the heads of state hashing out the details during multiple allight Summits the really big issues such as how to address a sovereign debt crisis or undocumented migration occupy all leadership bandwidth for a decade or more there’s
Also the not so minor issue of who’s in charge formerly the EU presidency rotates among all the members for six-month terms under the order this slowly softly oddly ambling path to integration was fine the Americans did all the heavy lifting on the security front via NATO on the global front via
Their Navy on the energy front via their position in the Persian Gulf on the raw materials front via their Primacy in the Western Hemisphere and their alliance with Australia and on the trade front via the World Trade Organization as well as keeping all of Europe lined up on the
Same side Europe could afford to have knockdown drag out multi-day arguments with itself over Chi’s policy that’s not a joke for the Germans all this dysfunction is part of contemporary Europe’s Beauty NATO bar security competition among the European powers no matter how messy or awkward or myopic
The EU might become keeping the field of competition purely economic enables Germany to be physically intact and industrially dynamic for Berlin that’s what matters that’s all that matters with wealth Rising stability assured and the Germans quiescence many Europeans have come to believe in a heady dream that after centuries of
Living in the world’s most blood soaked lands they had finally achieved a sort of historical escape velocity it’s a beautiful dream I want to believe it too but with the American abdication of responsibility that dream dies Europe is a region of military pygmies who face pressing military challenges a region suffering
Demographic implosion unable to absorb immigrants a region peppered with xenophobes who cannot control their borders a region rumbling with environmentalists who cannot generate green power a region facing a banking crisis that lacks the means of even defining the problem much less rectifying it a region that has largely outsourced its relationships with its
Nearest neighbors of significance turkey and Russia to the departing Americans a region whose most coherent economic financial and military power the United Kingdom has left Europe now faces simultaneous interlocking crises currency Finance banking monetary policy Supply chains inequality migration oil natural gas electricity demographics consumption exports Imports Libya Syria turkey
Russia any response requires that all European States agree on how to prioritize and address each problem which means for the Germans the worst of all worlds is about to arrive Germany is not a sunny or windy country despite spending nearly 2 trillion Euro on Alternate energy infrastructure and setting up omnipresent regulatory
Structures to favor the Green Tech sector which have doubled power prices from 2,000 levels which were already more than double average US prices Germany receives less than 10% of its electricity needs from green power Germany is more dependent upon fuel Imports now than before it started its green
Surge half of Germany’s exports and all its energy Imports rely on access to countries beyond the EU the United States is Germany’s largest End Market while China ranks third nearly all of Germany’s manufacturing Supply chains rely upon access to countries within the EU Germany’s and Europe’s demographic collapse deepens both the consumption
And the production problems with the Americans departure security competition is back on the table as in China German economic growth has been nothing shy of fantastic as in China German economic growth has been Possible only due to the changed local security environment and risk-free trade links to The Wider world that the order
Provided like China Germany will suffer hugely from the order’s end Germany is now returning to the same rise and fall cycle that has so defined its history the Germans are left with starkly limited choices the North Sea has oil and natural gas but other countries in the Sea’s Basin most
Notably the United Kingdom already absorb most of what is available via pre-existing infrastructure the Sea’s resources are unavailable to Germany the Middle East has plenty to go around but that region is on the wrong side of the European continent and turkey in a world of unsafe shipping lanes Germany might as
Well be on another planet labor options are similarly limited within Europe the Scandinavians British and French all operate at similar cost structures so there are few options for operational synergies many European countries keep most of their manufacturing Supply chains inhouse for reasons Geographic the United Kingdom Sweden or mertile France
Spain sometimes it is simply an issue of style Italy operates differently instead of the German approach of assembly lines and mass production the Italians treat industry more like art one at a time handmade outputs when the Italians handcraft a car it’s a fer when they Mass produce it’s a Fiat the
Largest consumption bases locally are the French and British even at the height of the order the French liked to keep their Market to themselves the United Kingdom was more open but in the aftermath of the brexit drama count on access to the British Market Flatout ending the Dutch will continue to do
Business with Germany but the Netherlands is more a flowthrough economy than a large Final Destination 17 million Dutch Can absorb only so much but looking East the Germans see opportunity the former Soviet Satellites of Poland the Czech Republic Slovakia and Hungary are not only near but Geographic barriers between them and the
Germans are minimal if Long Haul energy Imports are not an option Russia is brimming with relatively short Hall delivery options much of which flows via pipes that are already in place labor costs in the central European states are 1/3 or even less of those in Germany integrating Manufacturing Systems with them not only
Makes economic sense but also provides economies of scale the Germans could never achieve on their own Poland and its central European cohorts may be only about one half as wealthy as Germany but there are nearly as many people in those countries as there are Germans in Germany they
Provide both manufacturing labor and a consumption base just beyond the central European zone are 44 million ukrainians and 140ish million Russians who have proven unable to meet their own manufacturer needs in any era what’s left that is worth having fits Germany’s needs and yet remains Within Reach isn’t to the west but to
The east putting the Germans and the Russians on a collision course German success puts an integrated German manufacturing system in territory directly adjacent to lands the Russian sea as their critical security zone no more buffer zone in a post-order world everyone starts to get agitated again with German manufacturing becoming a bit
Less Volkswagen and a bit more Panzer and since the Germans will be rearming from a nearly disarmed start the pace of Defense Improvement will prove terrifying to anyone who has ever Crossed Swords bayonets or artillery with the Germans in the past on the flip side Russian success puts Russian
Occupational forces within a 4-Hour Drive of Berlin on a light traffic day so where does that take us one Last Dance Germany’s core issues of materials and Export access are not new neither are Russia’s concerns with Frontiers and internal rebellions nor is it the first time the two countries have found
Themselves in a mutually antagonistic overlap historically when such things happen the leaders of both countries tend to take deep breaths and have a thorough conversation about the lands between them they then proceed to draw lines around topic sandon maps with the intention of avoiding a bloodbath the
Problem is always the same divvying up influence over the territories between them is the easy part once any agreement is executed however the buffer zone between them vanishes swallowed up by the two Powers direct borders mean direct competitions every time the Germans and Russians reach this point
They eventually end up shooting at each other the only question is how long does the honeymoon last a generation a decade less the last time the Packa held for only 22 months this time around four issues argue for at most a brief period of coexistence first military Technologies
Are evolving again the last Russo German war started with artillery and planes now there are cruise missiles and jets as a rule increases in speed and reach and lethality compressed time frames second change is not simply coming to Germany and Russia’s neighborhoods but to Germany and Russia themselves surviving the coming Global
Breakdown will spawn on political social and economic Revolutions in both countries the last time these two peoples experienced such rapidly shifting fortunes the results included Nazism and leninism the point is less that we’ll see a return to Fascism in Germany and fascism with a different name in Russia but instead that the
Pressures that generated the last harshly negative government overhaul in both countries are very similar to those of today for example consider what drove the fascist rise During the vimar period of of 1930s Germany massive dislocation of Labor due to new industrial techniques that limited the need for Manpower massive economic dislocations
Due to disrupted export markets massive economic inequality massive population and migration imbalances and political leaders who weren’t so much toned deaf as trapped by circumstances beyond their control the viar system ultimately found itself overthrown by populists who were far from shy about lurching Germany in a dangerous New Direction
Any of that sound familiar if the Americans are not managing Europe and seeing to the continent’s economic and security needs then Germany must act like a normal country again whatever form the fifth Reich takes it cannot possibly be as pacifist and deferential as the fourth for Russia the possibility of a
Sharp systematic turnover looms even larger fewer than 200 people remain in Russia’s intelligence officials dominated political Elite Russia is now firmly in the zone where a single plane CR crash or assassination campaign or bad flu season could trigger a government breakdown or coup the third argument for a quick
Slide into confrontation has to do with the limited time remaining for the countries themselves both countries suffer from demographic weakness so Extreme as to be a country killing issue all by itself the time Horizon is so short that most Germans and Russians alive today will
Live to see the end that end might come sooner than even the countries of abysmal demographic profile suggest because not all revolutions succeed when a political economic or cultural system experiences violent overhaul there is typically a multi-year period of reset while the old system is being wiped away but the new system
Hasn’t fully replaced it the last time that happened in Germany it involved the World War II defeat the last time for Russia the post Cold War breakdown in each case simply finding the floor took at least half a decade a failed political social and economic transformation now would likely gobble
Up so much of what little time Germany or Russia have remaining that they never recover and that’s before one considers the bilateral competition what might a successful Russia do to take advantage of a failed Germany or vice versa a German failure to secure an economic orbit or a Russian failure to secure
Better borders really does mean the end this time around the All or Nothing nature of this competition intensifies pressures raises stakes and again compresses time frames both countries are quite literally raging against the dying of the light which brings us to the fourth and final reason this is a struggle unlikely
To end in a calm Cod dominion over Central and Eastern Europe Germany and Russia are not the only fish in the pond at the top of the list of states of concern must be the United States it is isn’t that the Americans are likely to see anything that overly bothers them in
The intensifying German Russian collaboration Kon confrontation directly but instead that actions by either Berlin or Moscow May inadvertently rub Washington the wrong way and prompt American action a world in which American interests in Europe are not grounded in NATO and the order is one in which American involvement is far more likely
To be corporate because Germany’s primary motivation is to secure an economic sphere of influence the Americans and Germans could well find themselves tangling over this or that market or resource flow a failure in Berlin to manage such entanglements effectively could sever what few connections to The Wider World Germany
Would have otherwise managed to maintain the Americans can easily operate Beyond Europe while Germany cannot at all a falling out between Washington and Moscow would likely have a more visceral outcome the United States defense and int intelligence Community has Decades of experience in countering all things Russian that experience and the
Information and weapons systems that go with it can easily be shared with countries or ethnic groups that could do Russia irreparable harm British intervention is less of an if and more of a how for the better part of the past three centuries the United Kingdom and the British Empire before it
Was involved in over a dozen Wars and near War competitions with both the Germans and Russians sometimes at the same time in part it was because London is an inveterate sea power while Germany and Russia are land powers in part it was because at the height of the Empire the British were
Sort of fighting with everyone but in the years to come British motivation will follow two themes first it’s simply good strategy British policy since the beginning has been to prevent the formation of a European Navy that can threaten Great Britain the easiest way to achieve that goal is to take
Preventive measures so no single power can rule all of Continental Europe a fully United Europe would be a peer not with Britain but with the United States and the Navy it could float would be able to sweep the British from the Seas taking preemptive action to prevent the
Rise of a European hedgman is as Central to British identity as a Jin and tonic and sturdy rain gear the two countries that have come closest to dominating Europe since 1850 are Germany and Russia for London the possibility of Germany and Russia disappearing from Europe forever is too tantalizing a possibility
To do anything but ENC courage second there will definitely be a Revenge play when it comes to Russia the same Russian cyber tools that have so inflamed American politics have been used the same way in the United Kingdom on both sides of the Scottish independence issue the brexit issue and
The rise and fall of both the conservatives and the labor rites the Brits would love for that sort of to stop for good against Germany British motivations are more instinctive there is a powerful strand of thinking among the English that the Germans should have been more understanding of the British divorce
From the European Union while at the same time of this writing the brexit drama remains a work in progress it is already messy and the British economy is facing a multi-year depression yet Britain is an experienced sea power that can apply diplomatic economic financial and Military pressure nearly anywhere it
Wants without fear of reprisal and it has centuries of experience applying that pressure to Europe payback’s a next comes a family of Nations the Scandinavians the Region’s mix of geographies is eclectic in the extreme Norway is in effect a city state with a ridiculously long ocean Frontage Finland
Lost its best territory to the Soviets in World War II and at times has resembled an army Camp Denmark is an island nation with an almost British world viw the balts were Soviet occupied Sweden has fought Wars with pretty much everyone in the region on multiple occasions with the Americans gone no one
Will stand up for them save one another courtesy of the exploits of Danish and Swedish Vikings all are quite literally family none will exactly be enthused about German activism But ultimately it is Russia that keeps Scandinavian leaders up at night the only way the Russians can truly be secure is if the
Baltic Trio once again becomes subordinate to Moscow that alone will prove sufficient to make the Scandinavians Clos ranks and maybe even lead them to cheer the Germans on through clenched teeth finally there is one power in particular that will perceive any iteration of a German Russian Love Fest
As nothing short of horrifying Poland Poland has wared with the Germans and Russians more than any other European nation and on two occasions was divvied up and div devoured by its two larger Neighbors in a straightup fight the poles don’t stand a chance their population is half that of Germany and
Their level of economic development is not all that much better than Russia’s they lack the demographic economic or technical prowess to go toe-to-toe with either Germany or Russia much less Germany and Russia but three points come to mind first unlike the World War II carve up this time around the polls are
Industrialized they’d still lose but they’d certainly put up a bigger fight than the 3 weeks it took the Soviets and Germans to Snuff them out in 1939 second they’d get loads of help anything that keeps the Germans and Russians focused on another land power is one that takes the pressure off the
More Maritime British and Scandinavians in the end the maritime Powers with their more Diversified economies easier supply lines better demographics and Superior strategic insulation really just need to play for time Poland can buy some for them but only if it doesn’t get steamrolled expect to see extensive Naval Air Force
Logistics material intelligence and completely disav valuable Special Forces assistance third nuclear weapons could very well enter the mix in the order countries have typically sought nuclear weapons to deter countries they feared might prove unbeatable in a conventional War Israel against the Arab Powers Pakistan against India North Korea and
Iran against the United States but remove the Americans from the mix and the of countries that might find a nuclear deterrent useful changes and expands Japan and Taiwan against China South Korea against North Korea and Japan Saudi Arabia against Iran Finland Sweden Germany and especially Poland against Russia there isn’t anything
Secret about how to make an atomic weapon the Technologies involved have existed since the 1940s back then the Americans did it start to finish in about 4 years at a budget of less than $25 billion in today’s dollars with some 90% of that budget going toward the production of
Fisal material material available today as waste product from every existing nuclear power plant nukes especially if the intent is to lob it at your nextdoor neighbor rather than sling it around the planet are not hard and if the Germans and Russians come sniffing around Central Europe after the Americans go
Home no one needs nukes more than the poles a nuclear infused stalemate among Germany Poland and Russia would hamstring Germany’s economic plans as well as Russia’s security expansion while also ensuring Poland’s survival all without a shot being fired that might make it the best of all worlds for
Everyone save Germany and Russia which means that any serious polish effort to develop a deterrent would likely be met by exactly the sort of assault the poles would be hoping to Forstall can Germany and Russia survive their challenges in this sort of degraded economic and security environment even if they can sumon
Somehow avoid coming to blows the honest answer is probably not neither country has enough staying power to make it through this competition and there are too many countries capable and close that have a vested interest in their Mutual failure what is certain is whether it takes the form of
Collaboration or confrontation on any given day in their death throws Berlin and Moscow will only have eyes for each other and those unfortunate enough to be caught in the line of their gaze every Peter Zion coming to you from Colorado the big news over the weekend is that a
Hong Kong court has ruled that China’s largest property Development Group evergrand is bankrupt and needs to be broken up uh this is something that the Chinese government has spent a lot of effort on the last two years not happening uh because well let me give you a little backstory so there’s two
Big things that dominate the Chinese economy the first is something I call hyper financialization the idea that the government both de facto conf skates the savings of the citizen population so it can only go into projects funded by Chinese State Banks as well as massively expanding the money supply to a tune of
Like almost triple what we have here in the United States uh in order uh to make sure that there is plenty of cash sloshing around in the system so that Banks can loan anything in any amount at low terms to anyone at any time because if they can do that they can expand
Expand expand and higher higher higher and people who have jobs don’t go on Long walks in large groups together it’s a public stability political control approach to finance it’s not about profit it’s about throughput because throughput requires a lot of bodies anyway that’s the goal uh in that sort
Of situation you get two things number one you get companies like everr who gorge on all this bottomless supply of debt to build build build build build even if there’s no demand second you get a population who knows that their private savings is almost worthless because the Chinese government is
Forcing them to keep it in the State Banks and they want to put it into a hard asset that preferably the state can’t control and if they can’t get their money out of the country then the next best thing is a hard asset in the country which typically is property so
You get people pooling their private Savings in order to buy condos and each condo is typically owned by a different Consortium of private individuals uh making untangling it also uh you have somewhere probably in the vicinity of 1.5 billion units in the country that have never been lived in never will be
Lived in so you’re talking about 100% overbuild conservatively some estimate States as high as three billion which is just so far beyond stupid anyway ever Grand going down means that their debts aren’t going to be serviced anymore and the physical assets they have are going to be parceled up and foreign investors
Are going to be coming in seeing what bits that they can get none of these things are things that the Chinese Communist Party would normally allow to happen so there’s a couple ways that this can go none of them are good option number one is we follow a western style
Bankruptcy and restitution program where this system is broken up and a lot of their assets are sold at pennies maybe dimes on a dollar uh and it just goes away if that happens we will have a very clear idea of just how much the over Supply in the market is and you can
Count on private citizens being up in arms probably I mean the best estimate I’ve seen out of China is at 70% of total private savings is wrapped up in real estate and most of these assets are worth no more than 10 cents on the
Dollar so if you have a fire sale of the single largest player which controls one sixth of the market holy things are going to get real very very very quickly option number two is that the Chinese step in and abgate the Hong Kong ruling now legally this cannot happen but the
Chinese Communist party is not really big on legal details when it comes to Hong Kong in particular and I have no doubt that that they could stick their noses in that if that happens then ever Grand goes on some sort of State drip and everything with the system just kind
Of limps on with the understanding now that Hong Kong has no legal authority over its own Holdings which will start an exodus of what few International firms are still there regardless how this goes don’t expect anything in the market to get better this is not like say the tarp program that the United
States put into place back in 2008 at the bottom of the sub PL crisis which kind of froze the market and put florid or things and allowed for reforms and economic growth to eventually heal the damage of the subprime crisis no no no no this is this is a one-off decision
That is not just holding back one rock from rolling down the hill evergrand may be the biggest player in this market but it is by far not the only one who’s been doing stupid things like this building condos that have no demand or running it like a Ponzi scheme every development
Company in the country basically operates this way way and the second and third largest players in the industry are state-owned so you can count on the Chinese government not using this as an opportunity to break with the old model and put into place something sustainable
And even if all of a sudden this place were run by a bunch of Austrian economists it’s too late housing demand legitimate housing demand housing demand for houses that people actually live in is dominated by people aged 20 to 45 people who were starting out well 45 years ago the Chinese government
Instituted the one child policy you combine that with the most rapid urbanization program in human history and there are no longer enough people under age 45 to do anything that is consumption-led including home buying so there is no path out of this that follows any pattern that we have
Established in a market environment which leads us to political and social outcomes where the market economics are just atrocious and getting worse by the day with a government that is becoming ever more nervous about the state of the economy and the Loyalty of its population I don’t want to say anything
Overly dramatic is like this is where it all starts to fall apart because we’ve had a lot of things like that go down in the last 18 months uh but this cuts to the core of what enables the average citizen to actually support the government and there’s no way we move
Forward from this without a lot of sight damage good morning from a frigid Colorado it’s a baly 0 degrees this morning and uh today I’m going to tell you A Tale of Three companies and the state of the semiconductor industry from a technological and production point of
View now if you go back to the world before 2017 the technology of the day was something called Deep ultraviolet uh which was basically basically a way of producing microchips and Intel the American technological giant was the world leader by pretty much any measure uh and they had gotten
A little cocky and they had gotten a little bit lazy so they would design chips two three four models out but would only produce the next one up because they were so far ahead of everybody else they didn’t feel the need uh to jump steps so they would use duv
And they would make a chip that was marginally better than the one before and then at the end of the year no one was head caught up so they do it again and again and again and they did this for like 15 years I mean they’re they’re
Very good at what they do but they could have pushed the technological envelope a lot more if had they chosen to uh in part that was because of the nature of duv Technology uh the problem with it is you have to kind of make micro adjustments and physically adjust the
Equipment for each type of Chip and you have to do that manually and physically and so with every design you had to do it all over and with every machine in a fabrication facility you would have have to do it independently so node new chips from different machines are going to be
Quite exactly alike and it generated a relatively higher loss rate from the final semiconductors than what we have today and uh so generated a little bit more waste but again they were the industry leader no one was close well they were always had their eye on the
Future however and so they invested in new technologies that would take them Beyond duv one of which is euv Extreme ultraviolet and the company that developed that technology is asml out of the Netherlands and back in 2016 asml thought the stuff was ready to go so they’re providing demonstrations for
Intel showing them how this technology is better you can not only get more nodes on a chip and get to smaller and smaller nanometers but it’s all digital so you kind of type in what you want to the machine over the course of a few
Days to a few weeks and then the machine doesn’t actually have to be physically manipulated in the way that duv did now what that would mean is you’d have a higher uh success rate and more efficiency but back in 2016 until was like I don’t think this technolog is
Quite right and we’re the industry leader we’re going to give it a few more years well asml not very happy with that marketed the technology to everybody else and a company decided to take the plunge that company is tsmc out of Taiwan and when we get to 2017 tsmc
Suddenly hits the ball out of the park and proves that euv is ready for Mass application and over the next couple of years very rapidly overtakes Intel because they have a shorter turnaround time for their chips and they can make chips with smaller nanometer uh sections uh it isn’t until 2022 or
20123 that Intel finally makes its first extreme ultraviolet chip so tsmc in Taiwan has been the industry leader now for several years now we’ve had a kind of a reverse in the role s now uh asml the Dutch have another another new technology called high numerical aperture whose physics I’m not even to
Pretend to understand and they have marketed again and this time Intel is the one that’s behind and they’re kind of desperate and kind of hungry and tsmc is the one that’s resting on their Laurels so the first delivery of those new machines the high na chips went to
Intel in the second week of January of this year and in expects two things number one they plan to overtake tsmc using the euv technology in 2024 uh hoping to get down to 2 nanometers right now the industry lead is at about 3 nanometers and that’s a tsmc product and
Then next year they hope to leak frog even further provided that these new high na machines work which you know we’ll find out pretty soon anyway that’s where we are right now in terms of the overall geopolitics it’s pretty straightforward right now 90% of all ien
Chips are made by one company tsmc in one city in Taiwan it’s a high concentration but if intel working with asml can pull this off all of a sudden we will have facilities in the United States that are working on the higher end stuff with some of the first
Facilities that are going to be going online uh outside of Phoenix and Columbus Ohio so stay tuned because the geography of these chips is about to evolve pretty significantly if High works and if not we’re still stuck with Taiwan it could be worse hey everybody Peter Z coming to you from
Colorado where we’re about to get another 6 Ines of snow we uh a lot of you have written in about um the Biden administration’s decision to put an operational pause pending further review on liquefied natural gas exports uh there are a lot of people talking a
Lot of things on all sides um on the energy industry side they’re saying that this is a a breach of proper protocol and it’s going to really inhibit future Investments across the sector and on the environmentalist side they’re talking about how this is the end of that sector
Al together and they’re dancing and singing Kumbaya um everybody’s wrong uh uh let me kind of lay out what this stuff is so natural gas is normally transported by pipe because it’s difficult to move it’s difficult to store it’s difficult to produce um and so you’ll have a pipe Network like in
North America that is separate from the pipe Network in Europe which is separate from the pipe Network in China you got those are the three big ones you got some smaller ones around the world uh they don’t connect and they can’t connect uh and so if you want to link
These together what you need to do is have a facility on a coast that will chill the stuff down to something like negative 300° or so uh and then it’s a liquid and then you put it into a specially designed tanker that can handle these cryogenic fluids and then
You transport it across the ocean to another facility where it unloads and is regasified and then put into the new system now uh we’ve been doing this for a few decades but it’s only in the last 15 years it’s really started to become big uh and the primary reason for that
Is the Environmental movement uh because natural gas if it’s properly burned in an appropriate facility a combined cycle natural gas plant uh generates about half of the CO2 emissions of say a coal plant uh also you can spin up a natural gas facility in just a few minutes as
Opposed to a coal facility which can take hours to even days uh and so if you want to pair it with say wind and solar it’s the perfect complement fuel because when the Sun goes down or when the wind stops you can just turn this thing on uh and so if you
Want to get the full capacity from your wind and your solars you really have to have a conventional system that’s dispatchable like natural gas now the United States currently has enough capacity name plate capacity to chill and ship about 13 billion cubic feet of this stuff per day which makes it the
Largest exporter in the world already and under construction are facilities that would allow another 12 BCF per day which you know if you remove the United States’s existing capacity from that that’s again the world’s largest and then there’s already been stuff permitted for another 16 billion cubic
Feet per day so you know you add those three together and well I mean where we are right now that’s enough to supply all of Japan if we bring all of these online that’s almost enough to supply all of Europe uh and the Biden tree
Doesn’t touch any of that it is a pause of the review process for new facilities uh now if the United States were to bring these all online so 13 today 12 in the few years and and down the road maybe another 16 you know you’re talking it’s what 40 yeah it’s more than
40 BCF and that would be roughly 1 14 to 1/3 of total us consumption of natural gas if we did get the number that high we’d have a lot more price linkage between the US market and everywhere else remember natural gas is pretty much sequestered and LG has traditionally
Just kind of played at the margins but if we had this kind of volume then Americans would start to be exposed to Global natural gas prices uh if that were to happen instead of this $2 to5 range that we’ve kind of become used to and it’s probably going
To be our Norm for the next few decades we’d probably see prices regularly going above 15 or 20 as we have international price shocks because of things like I don’t know the Ukraine war or I don’t know something blowing up in the Middle East when you only have about 10%
Exposure or in our cases a little bit 10% yeah we got about 10 10% exposure uh the price swings are very muted and so back in 2021 uh when the Ukraine war was hot and heavy and we thought we were going to lose all the Russian gas at the
Same time uh the Europeans were dealing with natural gas prices that were well over 70 for a few months and it was pretty ugly for their indust industrial stuff anyway uh let’s talk about what people are talking about with this uh on the industry side the idea that we’re
Going to build out past 40 is kind of a stretch anyway so the oil companies are just wiing because someone’s telling them that they can’t do anything right now uh second the Biden Administration has not oversold this they’re saying it’s a temporary pause of the review process to consider climate change well
If you want to consider climate change Natural Gas is the perfect fuel to ship out in bulk because it’s the only thing that really pairs with solar or wind uh you’re not going to do this with coal that would be silly and batteries sound great Until you realize the industrial
Process that’s required to build them at scale is never going to make them more than a niche use in specific areas I’m not saying there’s no use for them there but natural gas is so much easier it’s so much cheaper and by most measures it’s actually a lot cleaner too uh so
You’re only going to put batteries in places like uh Phoenix maybe where the solar intensity can be really really high and they just need to save some just need to save some uh four nights uh and then on the environmental side uh the celebrations you know number
One this is not forever it’s a temporary pause of the review process which the bid Administration can reverse with a stroke of his a pen or any additional leader could for reasons environmental economic or strategic remember that a lot of the stuff that’s getting shipped out right now is going to Europe in
Order to allow the European an option other than sucking down Russian gas so you know this is kind of important from that front too uh so everyone’s kind of making a really big deal out of it but I think the thing that is most hilarious is that the Biden Administration has
Found a way again to satisfy the environmental activists without actually changing the system uh this is very similar to what he did when he came into the presidency and he put a moratorium on fracking on federal lands that everyone was all wailing and nashing their teeth on one side and screaming
Bloody Delight on the other side well people forget that 99% of all Shale operations are on private land and that is regulated by the state so it was less than 1% of Wells that were affected at all but it made the environmentalists happy and it pissed off the energy industry but it
Didn’t really change anything at all and Biden is never going to be the preferred candidate of the energy industry and he was able to play Sate some of his more hardcore poor supporters he’s now done that again so it’s a fairly Savvy political move that actually moves the
Needle not at all which you know is one of the smarter things you can say about politics these days hey everyone Peter Z here coming to you from a very foggy Colorado it is the 16th of February and the news today is that Russian prison authorities have
Announced the death of Lexi nany who was a political prisoner who had the audacity to criticize uh Vladimir Putin and run for office long ago years ago uh and has been in prison ever since um he was transferred about a year ago to a high security prison in the middle of
Nowhere in Siberia it was an old uh Soviet Gulag uh this is basically where the Russian government sends people when they want them to die because it’s cold it’s brutal there’s no heat and uh medical service is deliberately denied uh so the idea that he dead is not
Exactly a shock uh the Russian government very well could have actually executed him and no one would know um now back in 2021 the Biden Administration said the death of naney would trigger a collapse in international relations that would really punish the Russians but since then the Russians have launched a war
And killed a couple hundred thousand people in Ukraine so pretty much all of the stops that could be pulled out have been pulled out and about the only way to punish the Russians now would be to send a lot more weapons to Ukraine or to
Do an outright uh block of all of their energy exports neither of which on the moment for a mix of political and economic reasons are on Deck so I don’t want to say anything weird like you know the Russians are going to get away with this because there’s a lot going on uh
But don’t expect any sort of tactical response from the Americans in general um or the West uh now before anyone gets to crying about this couple things to keep in mind number one Russia’s not a democracy it hasn’t really been a democracy in over 20 years so uh even if
N was allowed to continue to be part of the political conversation in Russia it’s not like he has any chance of changing policy he was more of a personal annoyance to Putin and nothing more um there are other people within the ruling party who have decided to run
For presidency against Putin on a very nationalist ticket but just be opposed to the war and they’re not being allowed to participate either so it really doesn’t matter it’s something that pro-democracy activists in the west get really excited about because he’s a name that more people know but he was was
Never going to have any influence uh second careful what you wish for uh nany may have been a nicer guy than Putin because you know lobar but he was just as Nationalist and his biggest criticism of the Ukraine war wasn’t that it was happening but it just wasn’t being
Prosecuted very well uh people forget that the the strong predeliction among Russians is to continue the war they just don’t want to be part of it personally uh the idea that Russia needs to expand its borders in order to survive is not one that is particularly debated in Russia it’s a
Generally been their security policy for 400 years that as long as your external borders are flat and open you’re not safe so you have to go through Ukraine to get to Romania and Poland and the rest now of course that’s bad for Romanian Poland and the rest but the
Russians are not misreading the map and unfortunately that gets wrapped up in the political discussion so that folks like nany appear more important than they really are so I mean I feel bad for the guy and his family but we were probably always going to get
Here everyone Peter Z here coming to you from doubtful sound and in this next in our series of regional geopolitics in a post- American World I want to talk about Northern Europe specifically the Scandinavian region uh now this is an area that has been fractured by history you got Islands you’ve got peninsulas
You’ve got deao city states uh but while they have been powerful in the past they’ve kind of been sleeping for the last 300 years and during the Cold War and the post Cold War era it’s been fractured into a number of different governments but I think the best way to
Think about this is not so much a collection of countries but a family of Vikings who are getting to know each other again uh the original Vikings were the Danes and the sweds who basically went off raided and pillaged and founded little trading Depots everywhere that they went and some of those Depot
Eventually Rose to become significant countries in themselves uh think of Ria and lvia or Osa in Norway or ruic and Iceland but um by the time we get to the modern era uh they had been broken into different spheres of influence uh in the post Cold War environment however
Especially now with the Ukraine war happening we’re seeing a changing and of Fortunes as these countries are rediscovering each other and we’re already in an environment where a lot of are consider themselves so familial that they already have a lot of joint embassies around the world but if
There’s one thing they’re all concerned about it’s Russia uh Denmark is the last country approaching the Baltic Sea so that if the Russians ever make a bid to get in the open ocean they go by them uh the Norwegians control the northern Coastline so they know the North Point
Is something they’re responsible for Estonia laia Lithuania used to be Russian colonies under the Soviet period and Sweden is a midsize power that was ultimately smashed by Russian power three centuries ago and only recently has kind of emerged whereas Finland was both a Swedish territory and a and a
Russian territory based on which time frame you’re looking at and only really became independent in a traditional sense in the last decade or so as it’s broken away from its finlandization programs which were basically a way that the Soviets used to crush Finn’s strategic autonomy what we’re seeing now is this
Whole cluster of countries coming back together all on the same side of the same geopolitical orientation no longer fractured by other powers with Sweden absolutely being the center weight of all of it it’s probably best to think of most of these countries not so much as countries but as cities that just happen
To own another swath of territory so in the case of say Ria or Copenhagen or uh Oslo over half in fact almost three4 of the population is in that one city uh and the rest of the territory just kind of hangs on Sweden is the exception I
Mean yes Stockholm is by far the largest but it actually has a population populated Zone in the South that is agricultural there are a number of cities going up and down the Baltic Sea Coast and so it is arguably as powerful if not more powerful than all of the
Others put together and now that Sweden is emerging from its traditional neutrality and starting to write its own security policies uh it is going to be a major force to be reckoned with couple things about this re we keep in mind number one it is very very Naval uh
Because of the Baltic Sea because of the Gulf of Bania this is a zone that if they’re going to survive they have to do so in the context of having a powerful navy to keep the tempal rivals at Bay and that means number two it’s actually fairly easy for them to partner with
Other powers from out of region assuming for the moment that those other powers are also Naval because if they were to partner with say the French or the Germans who are primarily land Powers these countries would see themselves overwhelmed they’re not just they’re just not big enough Sweden doesn’t even
Have 10 million people versus say France is roughly 60 uh the whole region put together can’t add up to a France much less a Germany but if you bring in the United Kingdom you’ve got a very different sort of power Dynamic the United Kingdom like the swedes like the
Danes like the estonians really doesn’t want to see a single large Mega Power emerge in the Eurasian or the European space because that would be a threat to their Naval Independence and so the Brits have always gotten along spectacularly with all of the Scandinavians and now that the swedes
And the fins are ditching neutrality the partnership between London and these places is very strong to a lesser degree the United States is in the same place now the United States overall is looking to slim down its security commitments moving forward but it doesn’t take a lot of cooperation between the Americans and
Say the fins and the swedes and the Norwegians in order to achieve some outside outcomes because all of the Scandinavians just want to rain Independence which means they’re always going to be to a degree hostile to anything that happens in Moscow and to a lesser degree Continental Europe that
Means for a very small price the United States can really achieve some outsize outcomes working through some very capable Partners so we should start to think of the relationship between the Americans and the baltics and the Norwegian and the Scandinavians however you want to define the cluster as very
Similar to the American relationship with Australia a powerful creative Ally that punches above its weight that’s going to do its own thing for its own reason but which dovet tales with American power moving forward all right that’s it for me catch you guys next time hey everybody Peters Zan here
Coming to you from hon peak in central Colorado and today we’re going to talk about Romania uh romia is one of those middle powers that kind of has been dealt a bad hand it’s got a good chunk of land in the lower danu and it’s bracketed by the carp in mountains but
It’s not quite big enough to kind of stand up to the neighbors so it’s got these two access three access points really uh you’ve got the uh Vienna Gap to the Northwest that allows access to the northern European plane you got the best Arabian Gap to the Northeast which
Allows access to what I call the Eurasian hords and then down south you’ve got the bualan mountains that pinch off access to the Sea of mamara region now the northern European plane the hord lands and M Mara are all capable of supporting absolutely massive powers that have dominated history as
Long as it’s been recorded and Romania is kind of stuck in the middle it has access to all three of them but could never generate the sort of military force that is necessarily to punch out Beyond those gaps and do anything meaningful in fact because it’s
Approximate to all of these gaps it is usually one of the first countries that gets conquered or Amalgamated when one of those three Mega regions decides that it wants to expand beyond their natural borders and in that sort of environment Romania Fates a double bite number one whether it’s coming from the northern
European plane or mamara or the Eurasian hland it’s got to decide whether it’s going to fight or whether it’s going to a seede and if it chooses to a seed and it is not in charge of its own destiny anymore and it usually ends up being a cog in somebody
Else’s Empire uh the second problem is that Romania while being the most populous of the countries in this squeeze Zone in between is certainly not the only one and there are others that might be a little bit defense more defensible and have a little bit richer geography and Romania is in constant
Competition with all of them so even if it can make its peace with its larger neighbors it then has to make peace with its smaller neighbors uh some like Bulgaria usually gets along with pretty well others like Serbia are tety but probably the biggest problem of all of
Them is Hungary two problems here number one Hungary has a little bit more defensive of a geography than Romania so it has a little bit longer history in terms of being an independent power uh especially since it is up against that northern European plane Gap uh best
Arabia is a 50- mile Gap and it’s really hard for a country the size of Romania to plug that but the Vienna Gap is only a couple miles wide and most of that is the danub river it fairly easy for even a small country like Hungary to hold the
Line uh that means that Hungary and Romania are the two countries that tend to find themselves uh fighting more often than even the major powers that are in the Lands Beyond and if you want to go just back to the Cold War there were these delightful stories that came
Out at the end about how yes we were in a cold war of the West versus the Soviet Empire but within the Soviet Empire the Hungarian and the Romanian intelligence Services were duking it out behind the scenes while they were technically on the same side now looking forward the
Romanians have some decisions to make they know that the European system is of limited duration they know that it’s in demographic Decline and they know that there’s going to be a fight for the region once again just like there has in every age of their history that has been
Recorded to this point until very recently they were convinced that when the Russians came again they’d have to cut a deal that they wouldn’t have a choice but the Russians are doing so poorly in Ukraine the uh Romanians are starting to entertain the possibility that there might not even be a major
Power on the other side of the best rapan Gap again and that means that the other Regional power that they would probably have to cut a deal with turkey becomes a lot more digestible turkeyy is an up andc coming power the relations with the Romanians going back uh
Centuries have been pretty good they’ve been excellent since the Cold War maybe a little cool but certainly professional and if the Romanians are entering a world where the Russians are no longer a strategic Factor but turkey is the then that’s a partnership that’s not vassal Dum and that is could potentially spell
The greatest chapter in Romanian history to date there are plenty of caveats in that statement Romania has among the world’s worst demographies uh they have are one of the top 10 countries in the world for using abortion as a birth control method and they’re among the worst demographic structures in Europe
Uh they’re going to have to find a new economic model uh they’re going to have to figure out what happens post EU maybe even post NATO these are all big questions but the fact that they’ve got a rising partner in Turkey right next door but not directly adjacent bulgar is
In the way that’s that’s a pretty good setup all right that’s it take care hey everybody winter is here I’m coming to you from Eastern Washington and today we’re going to talk about winter in Texas now if you guys remember back a couple of years I think it was
2021 one uh Texas got hit by a cold storm and basically everything collapsed uh all of their energy generation especially natural gas just ceased functioning um and 200 people died over the course of a couple of weeks because of the lost electricity uh that has not repeated with this cold front even
Though by many measures in most parts of the State uh temperatures got a little bit lower so five things are different now compared to what happened back in 2021 uh first of all while it did get as cold or even a little cold ER the cold
Snap wasn’t quite as long it didn’t last like the 2 and 1 half weeks like it did last time so the system wasn’t put under as much long-term stress uh but the bigger issues have to do with organizational and structural changes that the Texans have implemented uh the
Big driving factor for things on the legal side and the regulatory side um was governor Abbott who had spent a lot of time before 2021 making fun of California for their rolling Brown and blackouts uh because they just have a horrible GD and a horrible Energy System
And then of course in Texas you had 200 people die so he was uh personally motivated to make some changes uh and he pushed them through the legislature which forced the regulatory structures in Texas to adjust and the biggest part of those changes affected the natural gas industry so Texas before 2021 didn’t
Have its natural gas system winterized at all and there’s a lot of water vapor that comes up as a byproduct of natural gas production and a lot of time it’s in the Gathering pipes so what would happen when we got to subre fre in temperatures is that water vapor would condense into
Liquid and eventually condense into ice uh and then clog the pipes so the entire system um across especially Northern Texas and the Dallas area froze up and so there was no fuel to burn to do everything else for political reasons uh Abbott blamed the wind industry because
You know the wind did stop going but it was mostly natural gas that carries the backbone of power generation in Texas and that is what failed most spectacularly so in order to get things going they actually had to wave almost all of their safety uh regimens and regulations and people were going out
With a settling torches to manually melt the pipes and of course natural gas is flammable and explosive so we were kind of lucky that that didn’t get completely out of hand anyway this time around the changes in regulations forced producers across Texas to actually Implement some of the best winterising technologies
That we had back in the 1960s and the Texas grid now is on par with where Arkansas Oklahoma and New Mexico were about 1975 so you know this is some really basic stuff when it comes to things like insulation anyway it was more than enough to make a difference
Okay so that was the first big structural change um the other big structural changes uh had nothing to do with regulation it’s just how things have evolved so the new turbines uh wind turbines at the Texans and put up are more than 200 ft taller than the ones
That were up 3 years ago and that means they reach higher they tap stronger air currents that are more reliable so even though the wind did drop we had didn’t see nearly the drop off in power generation capacity because the physical structure is now different second Texas
Has put up a whole lot of solar and when these winter storms come through Texas usually what you get is a lot of wind a lot of freezing rain maybe some snow and then once they blow through it’s cold uh but it’s clear and so when you have temperatures in the 20s solar
Doesn’t really care what the temperature is unless it’s like crazy low or crazy high so solar was generating near record energy for the time of year so you had two different streams of energy coming into the electrical system that they didn’t really have last time and their Basel load system with natural gas
Worked a lot better than it did uh this sort of change is the sort of thing we’re going to see in some way across not just uh Texas but the entire country in the eventual world uh we’re seen more and more wind and more more and more
Solar and it doesn’t always go right the first time and we discover that meshing these systems together is more problematic than kind of the Breezy things that the greens say but when you have multiple systems that do feed into the same network you do get a lot of
Redundancy uh when one works and the other doesn’t the trick is to make sure you have enough spare capacity that you can dispatch at any given time now in the past solar and wind aren’t very good at that because you can’t dispatch them if the sun’s not out if the wind’s not
Blowing they kind of useless and you have to rely on older fossil fuel things like natural gas but what we’re seeing in Texas specifically is that we’re already seeing turbines that are 800 M tall right in the next year or two we’re going to be pushing the kilometer tall
Barrier and again stronger currents more reliable use for base load so I don’t mean to suggest that all of these problems when it comes to storms and interruptions are going to go away but as the technology evolves we’re getting better able to adapt and having a little
Bit more insulation on the back side as well that’s it for me