We aren’t simply wasting money on Ukraine. The return on investment has been overwhelmingly negative.
Conventional wisdom is that “high gas prices” are the result of the war in Iran, that they’re going to result in heavy losses for the Republicans in the midterms, and that the cost of living is going to remain high for the foreseeable future.
This consensus view, while not entirely wrong, is actually a simplistic and very optimistic version of events. The truth is actually worse than what conventional wisdom says. The truth is that we are now careening towards a potentially historic energy crisis — and solving it won’t be easy because it’s a physics problem, not simply an economic one.
There are a lot of theories about where this potential energy crisis is coming from. We just spoke to a White House official who posited one theory, which we’ll discuss in a moment.
Before we do, we need to establish that, as hysterical as it may sound, a full-blown catastrophic energy crisis could be on the horizon. In fact, that has actually become something of a mainstream opinion if you know where to look.
According to analysts at major financial institutions, including JPMorgan, we could soon realistically hit the operational floor for the global energy system. In the worst-case scenario, this could lead to the point where pipelines lose pressure, refineries have to shut down to protect their equipment, and gas stations run out of fuel to sell. No one ever talks about this, but as it turns out, fuel infrastructure requires a certain minimum amount of fuel to function. Think of it like your body — it requires a certain amount of blood running through the veins, or it will shut down completely.
When it comes to our oil infrastructure, that buffer is now in danger of failing. And it’s not entirely because of the war in Iran — which becomes clear when you realize that the vast majority of oil exports from the Middle East are sent to Asia, not the Americas.
But there is a supply shock, and we need to discuss it because the magnitude of the risk cannot be overstated. Every civilization requires energy to function. Without energy, we revert to the Stone Age. Look at what’s been happening in Europe.
Just a few years ago, Germany — the biggest economy in Europe — got rid of all its nuclear power plants. They shut them all down in favor of “renewables,” and they laughed at anyone — including Donald Trump — who said they were making a fatal mistake. Around the same time, Germany ran out of firewood — completely. The price shot up 100%, and then no one could buy it anymore.
Loggers put GPS trackers on their firewood because theft became so rampant. People began using wood chips in desperation. In neighboring Poland, instead of lining up outside the Apple Store for the latest iPhone, people began queuing for days outside of coal mines, hoping for some fuel.
This statistic sounds too insane to be true, but it’s real: Every year in Europe, more than 360,000 people die from “cold-related excess mortality,” otherwise known as cold temperatures (That includes many elderly people living in their homes, which don’t have adequate heating). That’s more than 8 times the number of Europeans who die from heat-related causes, which is pretty inconvenient if you’re a believer in “global warming.”
In the United States, by contrast, we only have around 1,000 hypothermia deaths per year — mostly drunk people who get lost in the woods during the winter. Even by the most liberal estimates, only around 40,000 Americans die annually for a reason that can be linked, in some tangential way, to cold temperatures.
Here’s another way to measure the distinction: in America, around 44,000 people die from gun violence every year, including mass shootings and suicides. That’s a whopping 12% of the total number of people who die in Europe every year from cold weather. So anytime you hear Europeans claiming that America is dangerous because of all the “gun violence,” tell them that Europe is dangerous because people freeze to death all the time.
These are numbers that are unthinkable in the United States. But if we continue on this trajectory, they won’t be unthinkable anymore. We’ve taken our energy production for granted. And that could be a fatal mistake, in a very literal sense.
Before I go into detail about how exactly we might see a failure of global energy infrastructure, I want to start with this communication we just received from a former White House official. I don’t normally share communications with Washington insiders, for the simple reason that I don’t know any Washington insiders. Nor do I have any interest in knowing any Washington insiders. Most people in conservative media go to great lengths to cultivate relationships in Washington. My approach is essentially the opposite. But this former White House official got in touch with one of my producers over the weekend, while talking about high gas prices. And I thought this statement was interesting, so I’ll pass along what the official said.
“It’s Zelensky. It’s literal Western civilization suicide. Europe and the United States are funding their own energy crisis.”
At first, when I heard that, it sounded like typical White House messaging to me. Obviously, they want to distract attention from the war in Iran and blame Ukraine for high gas prices. But let’s take the claim seriously for a second. This is footage of President Trump speaking at a golf tournament one week ago:
One day after these comments, Trump posted the following message on Truth Social:
“Ukraine has agreed not to hit Russian Energy targets. Russia has agreed to do, likewise!”
We have no reason to think Trump was lying about this. It would certainly be a strange thing to make up. Indeed, if true, it would be a major breakthrough. Ukraine has been bombing Russia’s fuel infrastructure — their fuel depots, storage tanks, pumps, and so on — for a very long time now. They’ve reportedly taken out roughly 1/3 of Russia’s refining capacity, which has led Russia to ban the foreign sale of its diesel — which is no small thing, since Russia is (or was) the second-largest diesel exporter in the world. This is why diesel is now more expensive than it’s ever been in recorded history, at more than $6 a gallon. Yes, diesel is more expensive than ever before.
How does this affect you? Well, two ways. First of all, pretty much everything you buy was transported on a semi-truck, a cargo ship, or a freight train at some point — all of which run on diesel. When diesel supply goes down, prices go up, and costs are passed along to you when you buy things at the grocery store, Amazon, or anywhere else.
Secondly, refineries outside of Russia are now “yield switching” to diesel to maximize their profits, meaning they’re refining less regular gasoline as a result (which drives up the price of regular gasoline). Remember, diesel and regular gas come from the same barrel, but many refineries are capable of switching their output to some degree.
According to Goldman Sachs, the price difference between diesel and gasoline in the United States is now over $60 per barrel, when it was just $3 a barrel one year ago. So there’s much, much more money to be made by refining diesel right now. And because refineries are already operating at full capacity, any effort to refine more diesel means that less gasoline will be refined.
That’s why global exports of gasoline have dropped 24% in the past year. Everyone’s switching to diesel if they can swing it. From March to August of this year, diesel yields in the United States are well above their historical averages, while gasoline yields have been cut. Meanwhile, demand for gasoline hasn’t gone down. In fact, it’s gone up, especially in Russia, since many of their oil refineries have been blown up.
So if Ukraine agreed to stop bombing Russian refineries, and allowed the world’s number-two diesel exporter to get back to refining diesel, that would be great news for the American consumer — unequivocally. That’s what Trump said was happening last Monday. But that night, Zelensky spoke to reporters and contradicted the president. He stated, “There is now a strong U.S. proposal for a mutual halt to strikes on critical infrastructure.” Zelensky added that “Ukraine is ready to support de-escalation,” but only if Russia would agree, in turn, to stop bombing Ukraine’s infrastructure.
Fast forward six more days, and Zelensky has clearly given up on the whole plan. He posted footage of burning Russian refineries, demonstrating quite clearly that Ukraine has actually doubled down on its strategy of destroying Russia’s fuel infrastructure. On social media, Zelensky then bragged about what he had done.
Our long-range responses had a very significant impact in the Moscow region last night. One of Russia’s key oil industry facilities and the aggressor’s logistics facility were hit. These are billions of dollars that sustain the war machine. … I thank our warriors for their accuracy: the Security Service of Ukraine together with the Unmanned Systems Forces, the Special Operations Forces, the Defense Intelligence of Ukraine, and the Foreign Intelligence Service. …I thank everyone who is strengthening Ukraine’s long-range capabilities. I am grateful to everyone who complements our long-range responses with responses through sanctions. Glory to Ukraine!
Remember when we were supposedly arming Ukraine with “defensive weapons,” and gave them explicit instructions not to escalate the war by bombing Russian infrastructure? Shortly before the Biden administration left power, they rescinded those restrictions. Apparently, under the Trump administration, Zelensky is happy to say one thing and do another. No one is stopping him. Now he is openly celebrating a military campaign that, in addition to raising the possibility of World War III in a very direct way, is also making day-to-day life much more miserable for millions of Americans. So why would he do that? Why in a million years would he dream of doing such a thing?
Let’s go through the numbers to provide some historical context. By some estimates, this year we’ve seen the largest surge in gas prices (in percentage terms) from January to the summer peak of any midterm election year in the past century. It’s not even close. Gas has now reached $4.48 a gallon on average, which is roughly $1.20 more than last year. The typical sedan is now around $20 more expensive to fill up compared with 2025. If you drive an SUV or a truck, you’re easily paying $30 or $40 more than you used to. You’re paying around 52% more for gas at the moment, compared to January.
The previous record in a midterm election year was dramatically lower — just a 27% increase in the price of gas all the way back in 2002. So we’ve doubled the previous record when it comes to the increase in the price of gas. This is uncharted territory in the modern history of this country. Don’t take my word for it — CNN brought out the nerd with the totally unnecessary smart board to tell you the same thing.
Matt Walsh, Daily Wire
