Diesel and the Black Cascade

some even worse news...

Welcome to the working week. Here's what we're looking at today: Russian seizes Ukrainian agriculture, the global diesel crisis, offshore wind coming to Irish port, Belgium delays its nuclear exit, CAISO approves $3 billion for transmission.


  • Australia bans exports of aluminum ores, alumina to Russia. (SPG)

  • Steelmakers face soaring scrap prices as US aluminum supply remains tight. (SPG)

  • Russian troops seize agricultural assets in Ukraine, could risk global food security. (SPG)

  • Fierce fighting engulfs Mariupol as Russia demands Ukraine surrender city. (FT)

  • Foreign investors dump Chinese stocks at record pace. (FT)


  • Aramco in discussions with Sinopec on downstream ventures: CEO. (SPG)

  • Oil supply shortage fears add to price volatility. (FT)

  • Gas prices upend small business. (WSJ)

  • "The market is untradeable"--oil traders grapple with extreme volatility. (OP)

  • The world is facing a critical diesel shortage. (OP)


  • New solar tiles from Denmark. (PVM)

  • Irish port to build floating offshore wind hub. (OWB)

  • Renewables will generate 44% of US electricity in 2050. (OP)

  • GE exec expects rebound for renewables. (POWER)

  • Italy builds first offshore wind farm in an effort to move away from Russian gas dependency. (ENG)


  • Pressure on US nuclear power could mount if sanctions imposed on Russian uranium. (POWER)

  • Belgium delays nuclear energy exit 10 years due to Ukraine war. (Y!N)

  • Eight of 15 nuclear reactors remain in operation after three weeks of war. (POWER)

  • Canadian government invests in third SMR technology. (WNN)

  • Nigeria moving ahead on nuclear power plant plan. (WNN)


  • Supergrid forming in the Mediterranean. (PVM)

  • CAISO approves nearly $3 billion of transmission projects to prepare for California's clean energy goals. (UD)

  • As Duke and Dominion ramp up their net zero goals, the supply chain comes into view. (UD)

  • Govt improving electricity supply with additional 2,500 MW to national grid--Power Minister. (TGN)

  • Iran to start power grid link-up with Qatar. (PTI)

Diesel and the Black Cascade

Last November, I wrote a brief piece called "What is the Black Cascade?" The Black Cascade is the term I came up with to describe the incipient energy crisis colliding with logistics and food crises. The latest crest in the cascade wave has arrived: we've got a global diesel shortage on our hands. 

Demand ebbed during the pandemic because freight transport, diesel's biggest consumer, took a hit along with everyone else. Then demand bounced back after lockdown. But production hasn't caught up. Now here's this from Irina Slav:

"Reuters' John Kemp reported this week that diesel fuel stocks in Europe are at their lowest since 2008, and 8 percent—or 35 million barrels—lower than the five-year average for this time of the year.

In the United States, the situation is graver still. There, diesel fuel inventories are 21 percent lower than the pre-pandemic five-year seasonal average, which translates into 30 million barrels.

In Singapore, a global energy trade hub, diesel fuel inventories are 4 million barrels below the seasonal five-year average from before the pandemic. 

What is perhaps worse, however, is that over the past 12 months, the combined diesel fuel inventories in the U.S., Europe, and Singapore, have shed a combined 110 million barrels that have yet to be replaced, Kemp noted." 

And, of course, Russia is a huge diesel supplier, so sanctions are tightening the squeeze. And while this will be a big problem for freight shipping (I'm including both rail and trucking, which is the vast majority of shipping done in America), here are some other sectors that will be hit:

  • Agriculture. Diesel engines power about 2/3 of all farm equipment.

  • Construction. About 3/4 of construction equipment uses diesel.

  • Public Transit. A substantial portion of our public busing runs on diesel.

  • Mining. America's mining industry uses about $7 billion in diesel equipment.

It's hard to see what consumer goods escape price spikes from diesel rationing. And it's not far-fetched to think a recession is coming. Last year, I wrote that I didn't want to sound like a Cassandra. I didn't want to be right because there's no joy in being right about things like this. And I was right about that part of it, too.

Crom's Blessing

Finishing stands at Severstal Dearborn Steel Mill in Dearborn, Michigan.