In film and television, the “boxed crook” trope is where a condemned person is sought as a last-ditch effort to pull off some impossible mission or overcome a formidable opponent. In return, the convict is typically offered amnesty or other consideration by the operatives in charge. Millennials will probably think of the recent Suicide Squad movies. For Generation X, The Rock starring Sean Connery was a great example. And for the boomers, it was The Dirty Dozen. Our current situation in the U.S. energy sector may not be quite as thrilling as those movies but the same plot elements exist. In today’s RBN blog, we discuss the predicament faced by industry and political leaders and begin to sort out the various proposals to put a lid on prices and restore energy security.
Then-presidential candidate Joe Biden pronounced judgement on the oil and gas industry on September 6, 2019, when he said, “I guarantee you, we’re going to end fossil fuel.” After Inauguration Day in January 2021, the Biden administration, in the name of decarbonization, continued to press its advantage against an industry that, with COVID and its resulting demand destruction and low commodity prices, was on the ropes. Policies that would limit supplies were implemented, thereby propelling a transition to alternative forms of energy. And by focusing on supply, rather than demand, a basic understanding of economics told us what was going to eventually happen to prices. Capital fled the sector with big-picture analysts calling the oil patch “un-investable.” The U.S. wasn’t alone in this effort, of course. Around the world, and particularly in Europe, governments enacted plans to reduce fossil fuel development and invest heavily in renewable energy. Major capital funds and investment firms followed suit.
The Future of Fuels bi-annual report by RBN's Refined Fuels Analytics provides an in-depth analysis of the U.S. and global refinery industries, focusing on crude oil and fuel market dynamics, supply and demand, alternative fuels, refinery capacities, and price forecasts to help stakeholders navigate the evolving energy landscape.
The plan to divert capital away from fossil fuel development worked. Long-term growth plans along the hydrocarbon value chain were scrapped but, despite increased investment, renewables haven’t been able to satiate increased demand. By late summer last year, cracks in the plan had already begun to emerge as Europe faced increasing uncertainty about its ability to meet winter gas demand and gas prices there spiked (To the Moon and Back) — the higher prices might be chalked up to an emerging energy transition premium. Russia’s war against Ukraine and the additive war premium was then the catalyst that sent prices spiraling out of control. Vladimir Putin is using energy as a weapon — cutting supplies, forcing commercial terms (e.g., pay in rubles), and otherwise weakening the European Union’s response to Russia’s attack. It is bad enough now, but it will get a lot worse when winter comes around and Europeans are freezing, and their industries are shutting down. Both factors — the energy transition premium as well as the war premium — have had a profound cumulative effect on prices and any response needs to take both forces into account.
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About the song
“Man in the Box” was written by Jerry Cantrell and Layne Staley and appears as the second song on Alice in Chains’ debut album, Facelift. Released as a single in January 1991, the song went to #8 on the Billboard Mainstream Rock singles chart. The idea of using a talk box on the guitar in the song came to producer Dave Jerden as he was driving to the studio and Bon Jovi’s “Livin’ on a Prayer” came on the radio. Personnel on the record were: Layne Staley (lead vocals), Jerry Cantrell (guitar, backing vocals), Mike Starr (bass, backing vocals), and Sean Kinney (drums, percussion).
Facelift was recorded between December 1989 and April 1990 at London Bridge Studio in Seattle and Capitol Studios in Hollywood, with Dave Jerden producing. Released in August 1990, the album went to #42 on the Billboard 200 Albums chart. It has been certified 2x Platinum by the Recording Industry Association of America. Two singles were released from the LP.
Alice in Chains is an American rock band formed in Seattle in 1987. The band rose to success as part of the grunge movement, along with Seattle bands such as Nirvana, Pearl Jam, and Soundgarden. Alice in Chains has released six studio albums, three live albums, five compilation albums, three EPs and 32 singles and has sold more than 30 million records worldwide. Six members have passed through the band’s ranks since its formation. Original lead vocalist Layne Staley died in April 2002 at the age of 34 and original bassist Mike Starr died in March 2011 at the age of 44. The band continues to tour, with a new tour beginning in August with Bush as the opener. There are tentative plans to record a new album after the tour ends in October.
