How Oil Ate the Soviet Economy
2022 ж. 5 Қар.
590 626 Рет қаралды
In 1979, the Soviet Union was the world's leading producer of oil, pumping 11.5 million barrels of oil each day.
At the end of our last video on this, the Soviet Union finished the 1960s as the second biggest oil producing nation in the world.
Even so, the country's most plentiful bounties of oil and natural gas were still yet to come, hiding beneath Siberia's frozen swamps and lakes.
In this video, we look at how the Soviet Union became an energy superpower and how that contributed to the country's eventual dissolution.
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Yes, this type of thing is sometimes referred to as the "Dutch Disease." No need to invest in a semiconductor industry, an auto industry, etc. when you can simply sell petrochemicals and buy them abroad. The effect is that modern Russia has "hollowed out" its economy to the point where it has no functioning industry much beyond military hardware and oil/gas.
And food industry and housing. Do you think if the other have a car industry and the other have the filling for the car, both need both industry's.
Hence a still backward mentality - why bother mindset
@@deniseproxima2601 could you please tell us which sort of car industry RuZZian is capable of manufacturing? According to housing, try travel through desolate RuZZian territory or watch a few documentaries displaying the cruel reality in world's largest country! 🤡🤮🖕🏻🤣🤣
I don't like that model though. One massive hydrocarbon industry does hollow out labour intensive industrial production, but not necessarily the other industries. For example: some of the best industries of Europe are in Switzerland and the Netherlands. They're mostly chemical, industrual agricultural, pharmaceutical, and tech and IT
That has been happening in the UK too. The importance of the city of London's financial markets was over emphasised and our heavy industries were left to die, with the exception of arms. No great excuse - lack of investment and forward thinking, while other EU countries made a success of engineering for exports. Then the crash of 2008, proposed EU changes to financial regulation and, consequently, Brexit have hit the sector that had been grown to be relied on. Look at the mid/long term outlook. Bleak, and no plans to redress it either. Eggs. Basket.
Having an oil field is like being able to print money without the inflation issues. At first, it’s great, the country is flush with cash and can buy whatever it wants to. But when you can make more cash from working in oil than doing other things, you become less willing to work in other areas. And if you can import things, you can buy the stuff you would otherwise produce with oil money. This does terrible things to your economy.
Dutch disease
not only that, the key to power is controlling the oil, as opposed to controlling people who are providing their value in form of engineering prowess and knowhow that creates money from dirt.
It's call resource curse, a very popular economic study field. One interesting case is the Nauru Island, where they discovered massive enriched deposits of bird poops and minted them billions. At the end, they were even worse off than before the discovery. Ultimately, it's very much a case of a lottery winner where the massive wealth shock crippled basic common senses and sound financial planning.
That was a contradiction in the "Wakanda" movie model. Having a highly desirable and abundant resource does not lead to technological or societal development, but the exact opposite. Lots of examples of this in human history.
Yes for many countries it is true, but not the usa
One of my professors was actually one of the first young engineers there in the 60s exploring Siberia for all kinds of resources. He had told us quite a few stories from that period of his life and his own parable about the law of large numbers when he lost his friend due to an accident. Interesting enough that the world first device to measure bounced off waves (which was called reverberometer) was developed in our institute in western Ukraine. That professor was not some average Joe though, he was actually one of the best soviet and ukranian engineers/scientists in his field (judging by his golden and silver medals, yes that was a thing in soviet union).
Woah- that must have been really neat to have a renowned engineer / explorer as your professor!! :]
Any exciting adventures? Lucrative? Haha
What was the parable?
@@benjiunofficial When they were young they used to neglect some basic safety hazards which seemed nonmandatory at the time, but out of nowhere something went horribly wrong and his friend died in easily avoidable accident. His moral of the story was every time when you cross the road or look after small kids you have to remember that it is not the matter of whether something bad will happen to you at all, but rather when it happen, especially if you do something unsafe regularly. The more times you'll take low risc, the more unavoidable the outcome of that small chance will be.
@@WingofTech Naah, in the Soviet Union wages were nearly the same. Dangerous academic work away from home, you'd make maybe 20% more than a guy doing a simply menial job. The real reward was in the perks and chances to steal stuff, which everybody did. For example you could be allowed to buy a car, or a holiday home without having to pour thousands of manhours into free work for the Party. Medals obviously like was mentioned. But a better posting also meant more opportunities to take stuff for yourself. A guy working in a factory probably can't steal more than replacement lightbulbs for his home, but at a higher posting you might be able to lay your hands on all kinds of stuff other people couldn't get. Like order up some child-size wintercoats 'for my latest expedition' for the kids. Save your wife 6 hours of queuing up at the clothes stores and save money.
There was so much waste due to electricity and heating being so cheap. The water radiators in your house were connected to a central heating system which were supplied by hot water from kilometres away by boilers of local industrial complexes or by heat power plants. The hot water pipes were often on the surface, and though they were insulated, they were still pretty hot to the touch. They would all start to rot from leaks, snow melting on top of them and its own heat, and stay that way without being replaced or upkept. Cats loved sitting on them in winter, you'd see dozens of them sometimes warming up... In Moscow there was an open HEATED swimming pool which worked through the winter, something impossible in a free market economy. The local Pushkin museum complained a lot because the humidity generated was so great, it started to ruin the interior and the historical artefacts. It was eventually closed down and church was built on top of it. You also could hardly control the level of heating in your radiators, even if there were some valves, they were so clunky or rusty most wouldn't be able to turn them. People just opened their windows in the middle of winter to cool down the house. The radiators in my house were raging hot, for instance. Also the heating would be delivered when some bureaucrats at the heating state corporation decided, not when the colds have arrived, and wouldn't turn it off when it was already hot outside. It was mighty annoying, the heating plan wouldn't be changed, you'd get a service (heating) when you didn't need it, and not get it when you needed it. You also payed for heating all year around! It was to "keep the prices down in winter". I think it's just a cheeky way to add another venue of taxation. When we transferred to a market oriented economy, it was immediately obvious how expensive and inferior the central method of heating was. Every new house built now comes with a boiler and the Soviet houses are being retrofitted whenever they can. Most can't, since most Soviet houses were tiny. Unless you lived in a 'party house' which was delivered only to big party members. Funny enough, if you look at them today, they are quite small and meh compared to new apartments being built in my city today. New apartments are much more luxurious and have a ton more amenities. There was so much inefficiency back then due to cheap energy being available, it's crazy to look back...
Central heating was common around the world back then, nothing to do with market or no market economy
@@tremon3688 true, and in some countries like Denmark or Germany they are still common, but the inefficiencies he talks about would not have survived in a market economy, i.e. not isolated pipes.
What you described is exactly what we have in Serbia today - we pay full price the entire year, pipes on surface level, it's way too hot in my building so I open the windows, they choose when to heat (and the conditions are so nonsensical it's sad, apparently it has to be 0 degrees @ 18h in order to heat at night so if it was by chance 2° and the night was -10°, they wouldn't open the valves) - many people turn to electric space heaters when they don't. Seems we're living the dream.
But that wasn't just a Soviet thing. Dutch farmers used to grow cheap vegetables like paprikas in winter in single-pane glass greenhouses that leak heat like crazy. (5,5 watts per m² per hour) Why? Cheap subsidised gas for millionaire farmers..... And currently we're paying through our teeth for heating and power because all our gas was wasted on millionaire farmers back then, so giving Putin and his sick war of extermination the finger, has resulted in a pretty significant price tag. A price we pay happily, but we didn't NEED to if we hadn't let the farmers waste it all earlier on.
Well termal plants that heat entire city quarters are awesome actually, the realestate prices are always higher there, they are the best solution for high density population centers, normal here in cro too, no matter socialism or capitalism, but they are not on surface and are insulated, if done right they are the best solution in cities.
Actually the USSR did have to develop own computer/semiconductor industry due to embargo on more advanced technological products. Nonetheless, the hard currency from the 1970s oil bonanza allowed to ignore growing problems with its economic system, such as woefully ineffective agriculture (for instance, the USSR imported grain from USA) or to waste more resources on arms race and economic/military aid to its third world client regimes.
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"... young, under 35..." 37 yo here, can confirm anything over 35 is old. Asianometry bringing only the hard facts as always. ❤️
Any time someone says they're 37 I automatically think of this: kzhead.info/sun/jdiShZxviICgg68/bejne.html
I’m 38 and I’m outraged by your comment!
@@Kodakcompactdisc You're a baker who's outraged about a KZhead comment... Admit it Pat, we're basically grumpy boomers.
@@TrevorsMailbox I’m outraged roughly 80-100 times a day so you might be right.
In the 1960s, the motto of the baby boomer radicals was "Don't trust anyone over 30!" Now that we are all seventy or older, that slogan has been retired....
Another great video. I learned so much, and this is coming from a fellow who started with Shell Oil in 1977 and went on to work in 15 countries around the world, before retiring in 2012. Your research is excellent. Thank you for all the work, and then sharing.
The role of oil in the collapse of the USSR is greatly exaggerated. One of the main problems of the USSR was the emission of money (as in the U.S. and the EU in the last 20 years, but adjusted for the fact that the USSR was a closed country and had no way to export inflation to other countries) to cover the budget deficit and for important projects. The Soviet party bosses believed that it was not dangerous for the economy, it could always be stopped. Oil helped partially offset the effects of the money issue by increasing foreign exchange earnings. The fall in world oil prices was an additional blow. By the end of the 1980s, the Soviet monetary system was finally unbalanced. Wages were rising, people had a lot of savings, but nothing to spend them on, empty store shelves, and a shortage of everyday goods. P.S. In a planned economy, there is no inflation formally, prices are regulated by the state, but in fact it exists and leads to a shortage of supply, i.e. empty store shelves.
Heh, we had US ambassador parrot the same nonsensical Regan-era talking point to us when he visited our high school. It's nonsensical, because: 1. People had a lot of money nothing to spend it on for as long as communist existed in Warsaw Pact (starting from 50-ties) 2. Soviets used multiple parallel monetary systems (I can name at least three: "official" money used to pay salaries, "requisition chits" used for B2B requisitions, "hard currency aka. dollars used for purchasing goods in dedicated stores). If anything, it was the soviets who could greatly outspend the US, because as you rightfully notice - in a planned economy system concepts like inflation are negated. Soviet Union died, because due to insane inherent inefficiency of dictatorship coupled with communist system and centrally planned economy, it was utterly unable compete in long run.
@@borek772 1. Not exactly. The monetary system before Khrushchev was quite balanced. This does not mean that everyone lived rich, the Russian Empire and the USSR as its successor were never rich countries. The deficit began in the 70s and reached its peak by the end of the 80s, when everyone had money, but to buy something useful you had to stand in endless lines. 2. The problem is that these parallel monetary systems quite communicated with each other. For example, the Soviet government used savings of the population (in fact, it was unsecured money) to lend to industry. In doing so, it further unwound the inflationary spiral. Otherwise, I agree, a completely planned economy has failed everywhere. Because of the problems it had by design.
How does it lead to a shortage of supplies?
@@polkanietzsche5016 The population has more money in their accounts than there are goods available in stores. In a market economy, this is balanced by rising prices. In a planned economy, prices are fixed. This causes goods to disappear from the shelves. Or the government sets deliberately inflated prices for certain categories of goods. For example, in the USSR, food was cheap and there were queues in stores. You could buy a color TV without waiting in line. But it cost 4+ average salaries.
@@yorik4897 next to rising prices the production will normally follow raising demands. This wasn't possible in Sovietunion while they couldn't access necessary raw material or distribute and manufacture in a sufficient way. GDR were forced to produce and sell better products (meaning not lousy East Block products) to wealthy West German customers to receive valuable goods and raw materials like steel, in exchange, which hardly no oppressed citizens could afford anyway. GDR and RuZZian elite took advantage of this and the rest went back to Western Europe, which didn't necessarily really care about low standard East German products.. Remember laughing of their weird outdated agricultural machinery as child.. A downwards spiral strangling the entire East Block
This put's what happened at Chernobyl into a much more understandable context. The standard western view by many commentators is that the Soviet system created an environment of secrecy, lies and incompetence that led to one hand not knowing what the other was doing and people not trained to think for themselves or to question irresponsible instructions or reactor designs. And while all of that has a basis in reality and fact the truth is that the Soviet's simply had no other choice but to A) build our their nuclear power generations as quickly and as cheaply as possible and B) put massive pressure on the people responsible for doing so to get those reactors and plants up and running fast and at low cost. In that way nuclear power was going to be how they bootstrapped themselves through the oil crisis they were facing and continue to meet the power production needs of their own country and their client states. Gorbachev was right, Chernobyl DID cause the collapse of the Soviet Union not because it exposed the corruption or the lies or the secrecy but because it caused a collapse in the plans of rapid nuclear power expansion and cost the country billions in clean up cost that they couldn't afford to pay.
Good point about Chernobyl but don't forget the 10 years the Soviets spent being bled white in Afghanistan.
@@itsmatt2105 I salute to the Afghanistan people for destroying not 1 but 2 superpowers reputation in only 40 years
@@lsd310 Why? What's the point or benefit?
@@itsmatt2105 le epic and based anti-establishment-erino. such a heckin counter culture. gotta give it to MUH ELITES
It wasn't civilian nuclear power that broke the USSR, it was trying to keep up with NATO's military spending. Nuclear weapons are extremely expensive to build and maintain, never mind submarines, surface ships, bomber fleets and tens of thousands of tanks.
This is, hands down, the best video on the post-WWII Soviet oil economics on KZhead! Just one comment, though: it's a double oversimplification to say something along the lines "it's easier to drill oil than to make computers" since, on the one hand, USSR desperately tried to build a viable computer industry of its own, as you yourself covered previously, and, on on the other hand, Russians would use profits to buy mostly manufacturing equipment from abroad (almost exclusively that - pre-WWII) - anything to help them build other sectors of economy. Post-Soviet Russia is, of course, a completely different story: it used its foreign trade profits on two major sets of items: consumer goods and, surprise, foreign tourism. Would love it if you could cover this other half of the story - the spending of foreign trade profits in the USSR/Russia - as well. And one again huge thanks for your ever more professional exposures!
You meant to say consumer goods and military^H^H^H yachts.
Mass-market (consumer goods) drives technologies, and investing into these technologies. Yes, USSR covers an industry demand of computers, tools and equipment in thousands of pcs., but life of usual soviet people was lacking of supply of those PCs, tools, equipment, cars and even clothing in millions of pcs. As far as I remember in 70-80s all good quality things (like toys, books, tools) were all foreign or licensed(copied) foreign products, expect probably the things from old 40-60s.
I knew pretty much nothing about chips, nodes or litography and I ve binge watched Asianometry's entire list. This video is also super interesting and about the topic in which I normally dont have much interest. Superb channel.
The great Russian scientist Mendeleev said using oil for energy is like using banknotes to fuel a stove. So far it seems he was right.
Fossil fuels is such a devious name in itself, fossil resources would be better. I'm not against pumping up oil for making durable goods or even (agricultural) chemicals but I super dislike burning those precious goods. And yes it prevent's a load CO2 too but that is besides the point. In the end it's a finite resource.
I'm not sure I understand. The use of oil has fueled entire economies. We don't use coal powered ships or aircraft to move cargo around. Although it is expensive to extract and transport, in many aspects it beats even the "free" energy we get from the sun. Installing a system to charge a personal car with solar panels costs more than several years worth of refined fuel, requiring a long return on investment. And that's for a personal car, we still don't have a good electric replacement for transport trucks. It seems that until modern tech smooths out the kinks, all energy comes from burning banknotes but oil burns the least and that's why we depend on it. I don't like how so many of the "greats" have weird quotes which seem idealistic and show a profound disconnect from reality.
@@ChucksSEADnDEAD A quote is not intended to be a detailed discussion, but to summarize a position. Mendeleev lived in the 1800s, when the exploitation of pretoleum just started. He saw the immense value of petroleum products as a source of chemicals, which could serve people for centuries, and he thought that burning it for heat was unwise. Because nobody paid him any heed, we burned through all the best reserves in a century, creating unsustainable cities and ruining the natural environment in the process. I don't see any disconnect with reality.
@@NielMalan why harbor all this hate? And from a place where you can look back and know that people don’t know better? And they still don’t know better. Aren’t you an example of not knowing better? To be mad at people of history for obtaining warmth.
@@assolutobisonte7040 The whole point of quoting Mendeleev is to show that people did know better. I don't know where you get "hate" from.
There’s a very interesting book I read sometime ago on this period in Soviet history called ‘Red Plenty’. A semi fictional account of the atmosphere of backsliding that started to take place after an initial push in technological progress. I’d highly recommend it, the way it’s written really humanizes the nature of soviet life.
Pushing out videos like crazy lately! 👍 Loving it.
Therefore there are some mistakes.
Romania's oil production was small. Romania depended on Soviet oil as much as the rest did, but Soviet Union wanted a say in the way development was planned, and their ideas were a bit bizarre so Romanian Communists found it more profitable to buy oil and gas at spot prices than accepting the subsidy and the interference. In exchange Romania invested a lot, but really a lot in hydro power, which covered over 30% of consumption (industrial and domestic). This attitude lead to Romania having the cheapest electricity in EU :) ... actual prices for consumers (domestic or industrial) are around EU averages but that price includes a lot of tax (about 40% excise duty plus whatever VAT is now). The excise duties were raised during the 1990s because Germany claimed Romania's cheap energy prices were an unfair advantage. edit: fixed spelling error
Well, well, not everything that happened since the collapse of The Wall was positive?
@@antispindr8613 you are right, not everything was positive, though a lot of dumb things no longer happen that used to happen before :-)
@@EmilNicolaiePerhinschi But was the USSR alone in making pretty stupid decisions?
@@antispindr8613 if you're in charge you're responsible :-) even when you're not always guilty So no, Soviet Union was not alone in making stupid decisions, everybody did them, but when complaints happened the Soviets assumed the complainers are simply stupid and don't get it, so they went ahead anyway ... also generally the Soviets respected only strength and despised their local allies and agents :-) and did not hesitate to sacrifice them to "the greater good". The Soviet/Bolshevik hostility was frightening, but their good intentions were absolutely terrifying because they relied on very high level information and believed they knew already all the relevant information: the famines of the 1930s were caused by good intentions, not by hostility.
@@EmilNicolaiePerhinschi But what was the cause of the Dust Bowl? And was not the run down of Motor Town a willful policy?
Thats what Im talking about. Your videos are uniques. Theres no channel with stuff like this. Well done, Sir!
Really awesome episode. I didn't know this history. Thank you!
Even in a command socialist economy, higher salaries have the same effect of getting people out there
A lesson the Soviets could never learn. Skilled workers were often desperate to leave since they were paid barely more than minimum wage in the US. I knew a doctor in Soviet Hungary and she was living a lifestyle comparable to an American plumber or carpenter: shitty apartment, shitty car, few luxuries and the luxuries she had were comparable to off brand American versions. She had to wait for the iron curtain to fall since she didn't want to leave here family but she knew some people who went to the west for international meetings and they fled and sought asylum since they knew they could make much more in the west and live a high quality of life.
@@arthas640 they graduate school for free . and 60% of the population of the Soviet Union graduated from college. then who should pay for it if not citizens of the Soviet Union. and the bastards even fled to western countries and made the country lack of human resources as happened in developing countries, especially India and Laos
@@arthas640 US plumbers and carpenters are very well paid
@@optimusmikey varies by state and by time period. They used to get mediocre pay and in some states they make little more than minimum wage while in western Washington where I live you can expect $30-$60/hr depending on where exactly you're working and what kind of work they're doing. When my dad and uncle started out in the 70s though they made something like 25-50% above minimum wage which would be more like $20-25/hr today.
@@optimusmikey now they are paid well, but not back then
Great coverage of a timely topic. I had previously heard of the arms race and Chernobyl as being major contributors to the Soviet Union's dissolution. But I had not previously heard of their energy sector being an issue. A companion book that likely overlaps with some of what's presented here is entitled 'Blowout', published in 2019. Russia is discussed, but is just one of many nations.
It important to understand that Karl Marx only had half the equation,. He does not discuses how to create markets this is a really problem.
@@marctemura2017 Under the communist ideology of a 'Planned Economy', a market is relegated to what the dear leader demands.
In the Soviet economy, companies were guided not by customer needs, but by the plan received from the ministry. Sooner or later this led to the fact that the enterprise began to produce for reporting purposes. Why should it bother with quality, customer service, distribution networks? The job of the plant manager was to ask for more resources from the ministry, produce the planned volumes and deliver them. This sooner or later had an impact on the quality of the product. Plus, the so-called cross-subsidization of various industries was very widespread. Farmers (there were no farmers in the Soviet Union, there were collective farms) received fuel at cost or even cheaper, electricity was cheap, transportation was subsidized... As a result, because of fixed prices, it was difficult to discern who was actually making money and who was working at a loss. The main problem of the Soviet economy at a later stage was to cover the budget deficit by issuing money. It was much like the West now, except that the Soviet economy was completely closed and the emission immediately affected the population in the form of shortages of everyday goods. There was nothing to spend the money on. Food was cheap, no one went hungry, but you had to stand in lines to buy basic products. Something more or less valuable, like a color TV, was inadequately expensive. A car was practically a luxury item. At the same time, people had quite a lot of money in their accounts. All these savings then depreciated in the 90s. Then in the 90s, the Soviet industry was "privatized" (for free or for very little money) by people who were later called oligarchs, but that's another story.
@@yorik4897 Thanks. I generally perceived this. But your summary is both concise and broad.
As I said elsewhere Chernobyl was a direct outgrowth of the crisis in the energy sector. It was a result of a rush to get cheap power through nuclear energy that led to that disaster and when the plant blew up not only did it kill any chance of nuclear replacing oil and coal it also cost the country billions they didn't have to contain and clean up the mess created, to say nothing of the loss of productivity and resources in the exclusion zone.
Superbly researched, and clearly delivered. My compliments.
Repeating Soviet propaganda is far from "superbly researched"... Soviets were sucking energy sources from satelite countries all the time and from the video we are learning that they were some kind of saviour delivering it and whole central europe was dependand on Soviet energy sources(when in reality its full of coal and that was the main energy source). There was hardly any car production in Warsaw Pact countries and you were waiting many years to be allowed to buy a car and yet fuel was rationed by communist governments for a very long time and government was providing special fuel bills that you needed to buy a fuel on a gas station... For example Soviets were paying only 10% of Polish coal real free market price and they were calling it special price and delivering by them reparations for WW2 from Germany, as USSR made a deal about reparations that Soviet Union will be delivering them from Germany to Poland... that is why Polish government now asking for real war reparations from Germany as they back then said that they do not want this Soviet style reparations->as there was no money to even pay miners for diging out the coal and not to mention buy coal on free market to have energy in Poland! In previous part about this topic there should be at least mention of Witold Zglenicki the guy that got plenty to do with Baku oil success but no, not in Soviet/Russian propaganda(as that is clearly the source of his informations).
Great video! Amongst others, the Soviet Union was apparently also plagued with the "Dutch desease". Wasn´t aware of that, but it makes total sense.
great video! very well-researched, as always.
This was one of the best from this channel.
Really interesting, thanks for the sharing!
Another fine example of your excellent research and production Sir!
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Well done. This channel always has something interesting.
Just outstanding. Thank you!
Fasciting insight. Knowing things like this make a lot of the other stuff that was happening at the time make sense
Very interesting. Thank you for your hard work
That is a perfect example of the resource curse! Thank you for your work.
Very informative. Thank you.
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You chose a flattering angle showing vienna :) thanks
Wow this should be in every highschool curriculum. Insightfull and well explained.
Your videos show me how small my brain really is. I have learned so much from you!
If you are learning, your brain isn't small.
Is there any chance you'll be uploading again to the podcast version of this? I really appreciate being able to listen to your insights at work where I can only use audio. If not, it's not big deal, I get it's a lot of work and I appreciate the effort regardless.
There are ways to rip audio from youtube videos. I use an app that's not on the app store but there are browser-based video to mp3 converters.
@@ChucksSEADnDEAD I know, the best one is the standalone program with this website name and -DL at the end. I was asking specifically because other channels like this have a lot of success uploading the audio as a podcast. Just makes them more money, and saves everyone who wants audio a few clicks and such.
Basically boom and bust economics. Their oil and gas exports were lucrative… while they lasted. But when their supplies began to run out and foreign competitors came on the scene reducing the price of oil, it all collapsed. The problem is, it costs x amount of money to get the oil out the ground… The more scarce the oil the harder it is to pump out, the more expensive it is. And if the market price of oil drops below a certain figure, you make a loss pumping out this scarce oil that’s hard to get to. I’ve known western oil rigs having to shut down production when the price of oil drops too much. The biggest question is, which oil producing country is next?
We see how Venezuela did destroy own economy
@@manjelos Exactly.
i waited enough. thank you))
"As low as -27 deg C" That wouldn't be too bad, it gets a lot colder in Siberia. Try -55 deg C.
Not every where, there are just few places where temp drop like this
@@manjelos Do you know what "as low as" means? Read it and try again
Even Denmark occasionally had - 25°C. Not that tough or exceptional temperatures..
Great video!
very good analysis and video!
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15:00 The most interesting thing about this photograph is the stark contrast between the cars in the foreground
Excellent analysis and presentation I daresay, as someone with a superficial understanding of that all. Some time around 1979, the main levers determining the course to our present situation were pushed...
Then what happened 2014 when megalomaniac Pootins aggression were shielded by greedy and arrogant Merkel?
Well done!
Turns out greed and a hunger for unsustainable growth are not a unique feature of capitalism but intrinsic to the human condition.
Communists are honest capitalists. Capitalists are dishonest communists. They are both 2 sides of the same coin.
@@tactknightgaming2066 What a ridiculous statement.
I even thing it's not unique to humans, but all living creatures. They all basically grow their population and deplete all available resources because if they don't someone else will do and ultimate goal of every species or group is to get rid of the competition.
@@tactknightgaming2066 LOL. Communists are even more dishonest using the same workers they claim to have so much solidarity with to enrich and empower themselves. It figures when Karl Marx had little in common with the working class yet spoke like he was the voice of them.
generalizing the generalized maybe in another universe there is a utopia of eternal energy worlds gone crzay
Great history lesson 👍
nice job!
As a Texan, I appreciate the use of Texas as a unit of bigness.
As an Alaskan, I have to remind my Lone Star friend that if we cut Alaska in half, Texas would become the THIRD largest state. Sorry about that! (No, not actually sorry!)
@@itsmatt2105 mate alaska a frozen tundra no shit its bigger i feel like even mentioning that compared to tx is jus retarded 😂
@@moneybilla Yeah, I hear you but Texans have a bad habit of "accidentally, on purposely" forgetting about Alaska and claiming their state is the biggest so I'm just doing my duty and reminding them.
@@itsmatt2105fellow American here. This is hilarious 😂
@@itsmatt2105 😂
I'd argue oil didn't hurt the Soviet economy, it WAS their economy. They had a backwards economic and political system and their economy was 3rd world until they cranked up oil production. Their mining industry was cheap thanks to cheap labor and cheap fuel, their manufacturing was cheap thanks to cheap minerals and energy, and their farming only got to a level where it could feed their own people thanks to all the oil derived fertilizers. Their economy tanked every time oil prices dipped and thanks to the aforementioned backwards polticial system they couldn't adapt. Everything the Soviets did was inefficient but their entire empire was just barely propped up through rock bottom wages, cheap energy, cheap materials, and fuel and mineral exports. A million years ago I read an economists quote about the USSR. He compared them to a bike with a hole in its tire but rather than fix or replace the wheel they just kept pumping their tire pump harder and harder to make up for the leak. It was unsustainable even when things were at their best, and even a slight bump in the road could spell doom
The Soviets were 2nd World. unlike the west which robbed 3rd world countries of resources and then forced to buy finished products from western countries. The Soviets were very anti-colonial, giving natural resources to other countries to increase their industry
@@carkawalakhatulistiwa Siberia fulfills almost every definition of a colony, the only difference it's that it is not separated by from the mainland by sea.
Фух, таки есть один адекватный комментарий. Спасибо
I worked in Siberia back in the mid-'90's. Had a Soviet table saw, planer combination I was supposed to work with but the blade was so dull, all I could do is slowly burn my way through the boards. I asked my national helpers to buy another blade for me and gave them the cash to do it. They came back the next day carrying a heavy box and sporting big smiles, "we fix problem for you! We not find sharp blade but we find bigger motor! It's the Russian way.
Very well researched and interesting video. Well done. What are your sources?
It is not about oil - Norway also has oil for example and USA also has a lot of oil, it's about bureaucracy in power up there
The difference is that they don't have that much oil compared to the other petrolstates and therefore it's not their main source of revenue. But yes, the Soviet Union was a prime example of a disfunctional state.
@@thebandofbastards4934 I mean the U.S had alot of oil we just used up alot of it
The USA is lucky. They found a new continent with a nature sea Barriere.
Great presentation. This is what I have been wanting to discover for many years. Thankyou.
No access to a library or something called the Internet? Try it, a really informative medium, often freely available information.
Brilliant! One of Russia's best economy researchers came to the same conclusion as you did. Well researched and well done.
1:25 -27°C is average winter temperatures in some areas. Usually it's -15 to -25. But -40 and -50 are common
Or in the modern, post soviet iteration: Germany was buying Russian oil and gas and selling their goods and services in Asia, primarily in China. Now, there’s a shift. Chinese won’t consume European goods and services, eu wouldn’t buy Russian gas and oil. Will China start buying out Russian resources to offer its goods to the world - remains to be seen. But the tide had shifted due to the Russian invasion in Ukraine
True, instead of directly buying Russian resources, the west will buy Chinese (and soon Indian and SEAsian) goods made using discounted Russian (and maybe soon Irani) oil and raw materials.
@@duckpotat9818 China already buys more or less any oil the Iranians are willing to sell them. The hardships of the eu are troublesome. Many countries are in double digits inflation not to mention growing energy bills that will require government subsidies for big industrial players. This is where the Merkel doctrine led the eu to. It doesn’t mean this can’t be remedied, however, if they’d heed the call of US president Trump for example 4 years ago, they’d be in a much more comfortable place.
@@yashav2949 eu has so much oil and natural gas, tankers are lining up off the coasts. 😂
You slept 50 years.
@4:02 there you say 261 million tons, but the slide says 261 million barrels.
Asianomertry great talk. Your one of the best
Some people have described Russia as a militant global gas station. They weren't wrong IMO.
I think it's Clinton (if I remember it right) that said about Russia as a giant oil company masquerading as a sovereign country.
Like others. And some are militant without it. To get it.
8:11 To be fair, 27.2 million square meters is only 27.2 square kilometers.
Díky!
I wondered if you'd get to this....thank you. Not used to hearing oil production in tons.... Wikipedia says there's 7.46 barrels/metric ton....hmmm....
I had the same reaction to the use of tons.
Metric tons instead of barrels is how you measure oil
@@Fjodor.Tabularasa Barrels instead of metric tons is how you measure beer and crude oil.
@@RichardKinch even backwards traditions has to change someday... Metrical measurements is a international used standard for very obvious reasons.
A prime example of Dutch Disease. Thanks for this series.
Or resource curse.
@@shauncameron8390I think dutch dissease is pretty much the same but applied towards exports.
4:05 Is the "tons" supposed to be "barrels" instead?
Primoroso.. Parabéns.
An oversimplification of the difficulty in running an effective centrally planned economy. Especially one competing, and partially interacting with, a much much much larger market based economy.
the economic side is not my field. I was born in USSR occupation and it simply never was going to survive as a system anyway, because it is not adaptive, and it simply FORCED most of its citizens to become part of the "union". unless you dont take that into account - then yes, you can obviously blame the west, as usual 😅 for me, personally, the fact that USSR collapsed when I was a kid, is the best thing that happened in my life. any economic system which is imposed by force on its citizens - not gonna survive the world. the only way is to become North Korea and make sure nobody escapes the wonderland to tell everyone how amazing it is people who think USSR should of been kept intact, blame Gorbachev for not being Stalin, essentially. how is this economic system can survive if only very few people choose it naturally on their own will? most of nations where invaded or manipulated into communism. nobody voted.
Fantastic production and an interesting episode, a pleasant norm on this fine channel. but ! "thusly" doesn't exist 'thus' is its own -ly i don't mean to be that guy, pointing out minor grammar imperfections. was corrected myself on the word & have since quit the "-ly"
I didn’t even notice I was early lol. Nice video
Is that an AI generated image of a refinery at 15:28?
yes
Please do a video on the future of semiconductor manufacturing in Europe
It is not entirely true that energy trading within communist block (more precisely within CMEA) was unfavorable to the Soviets. First of all, it was the cost of running the empire. Should energy supply from the USSR dry out, countries of the Soviet block were likely to go down in social upheavals and turn to the west. Second, the USSR was extracting from the satellite countries their valuable economical output. Since all currencies were not exchangeable and had arbitrary rates with redirect to gold or dollar, the exact advantages or disadvantages were difficult if not impossible to ascertain. The worst problem was that as soon as any communist country managed to produce something that could be sold for hard currency it would meet its obligations within communist block only grudgingly, as all these countries were always heard currency starved. Therefore, the net and paradoxical result of the within CMEA trade that everybody was losing and mutual incriminations and resentments were building up. The rest is history - as soon as Soviet grip lessened everybody ran away as quickly as possible.
Very interesting.
The latest Asianometry episode on Spotify seems to be from June 29, 2022, and not up to date.
As a former teacher your information is FANTASTIC!! Perhaps what surprises me the most was just the ARROGANCE of those in charge. No oil or gas field will last forever. That was chutzpah at it's finest
-26C Try Canada at -40C/-40F da konrad lots ice special wintercold operation.
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this is why food security is the number 1 priority, while energy and industry would follow
Actually, use of contraception should be priority no one, in most of Africa and the Middle East instead of relying on others provisions and resources!
Please do one video as 3rd in the series on post Soviet oil industry in Russia 🙏
And perhaps this one can lead up to the geopolitical context of the ongoing Ukraine war!
Well done. "You are a one-man PBS channel." :)
7:53 aw that stamp is cute, love the soviet aesthetic :D
Try live with it, very encouraging 🙈
Thanks
Like back in time Spain. Having flow of gold and other goods from the colonies made life comfortable, so why produce something when you have enough gold to buy it
Luckily EEC subventions became available later on ...
So happy for Part 2 of USSR oil industry !
Dutch disease times socialism's lack of strong economic gradient times Russians' (I say this as one) innate laziness & corruption well documented in Russian (and world's) classical literature pre-dating the USSR, and the extent of inevitability of this outcome becomes clear. I say this even though I love Russia dearly, and USSR, that's given me a wonderful childhood.
Russia's best days are ahead of her. Not unlike the Americans and many others, the Russians are perfectly capable of shaping up & doing the right thing - but only after they've tried everything else :)
@@AlexKarasev and I mean EVERYTHING else.
@@b1646717 Everything else is derivative, and by the way, not many of the leading capitalist nations would survive 70ys if isolated to the extent the USSR had been.
Russia destiny is to protect the future of human beings on this planet...even with destruction if Russian economy five times in the last century, Russian people resurrect and survive .I love Russian people for their endurance and their love and their acceptance of others...
@@sulimanibra5332 pro… pa…
AI generated refinery at 15:28?
I tuned out when you stated the estimated and actual decline figures in Soviet production. 150 million tons is 1.125 million barrels, so either it didn't decline much if at all, or you got your figures wrong and stated a decline happened. Either way, inaccurate.
Tons, barrels, cubic meters, pick one unit of measure and stick with it.
Doesn't really change the outcome... RuZZian greed and inefficiency strangled everyone. Just like insanely corrupt mafia Pootin succeeded with on his duty 🤷🏼💸💸💸
You are clearly an expert in EUV lithography. Your knowledge in Oil production is as good as mine, talking with my friend in a bar. If you could explain why we are still using EUV lithography with a pretty long wavelength (over 20nm.) rather than ions beams, where the beam can be sub manometer, would be way more interesting
I can understand a focused ion beam slowly removing material through ablation, or a broad ion beam etching material from an entire wafer, but to fabricate hundreds of trillions of transistors in a matter of weeks takes takes lithography. Now e-beam lithography can make some very tiny features. STS-Elionix makes a tool that can expose chips up to 3mm square. Not so great for a CPU, but really nice for a GaN W-band power amplifier.
You always surprise me, for good.
It is nice to look beyond the public mass-media narrative of simple, easy to tell stories about how everything bad everywhere was fundamentally flawed in some way and everything good is always a result of some underdog going above and beyond to figure out clever workarounds in the system that eventually were developed further. And I'm not just talking about the Soviet Union
Did you just deliver a self portrait? Something called the Internet serves this sort of information for free.. Try study informations in German, factual reliable and throughout information. Good luck 🤞
Thanks. Will be interesting to see an update to this in a year or so as a result of the change in the attitude of the EU in answer to the ill conceived Soviet-Ukranian War
Basically there is no change of EU policy while fact is there were no such agreements. Greedy Germany were the primary support for Pootins ongoing aggressive actions, only lately they teeth grinding accepted they couldn't manipulate and force the world into their weirdly squared perception. Same happened with Merkels insanely self destructive open border policy, forcing rational neighbours to ignore Schengen open border policy. Only now is EU finally cooperating on Energy supply
Same thing happened to the Spanish with the south american gold, and now to the gulf states, Iran ("thanks" to western sanction they have to devellop their own agricuture and manufacturing!), Algeria, Nigeria, Venezuela, ...
In severe cold, does oil still come out warm from geothermal heat, or does the surface cold still make it harder to move??
I had no idea that Switzerland was a part of Czechoslovakia during the 1970s.
That concept is called Dutch disease, a country depends too much on one sector such that when that sector declines the whole economy goes down with it. The gulf states are trying to avoid it by diversifying into space travel, sports and tourism.
I love how he says -27 celcius like it's something out of a horror movie, it's cold but not that cold
I don't think you realize how cold that really is especially when it's the majority of the year. Sure other areas get a lot colder but they aren't running one of the largest oil productions in the world year round in it. Also it's the reason the pipes can never be shut off. Once they freeze the whole thing has to be replaced.
The problem wasn’t oil. The problem was that their economic system was fundamentally broken. The oil money was the only thing keeping it going. If it wasn’t for the oil money, the USSR probably would have folded a decade earlier than it did.
And also the black market.
Hey i really apreciate your content but this would be sooo much better if you could give unites not in miles or some stupid non standard unit thanks
The way you keep jumping between units makes it harder to keep track of the relative size of these things. Metric tons, or cubic meters, or barrels--you should just stick with one.
I wonder what will happen to the Russian oil and gas industry now that they've shown themselves to be extremely unreliable partners and more than willing to use oil and gas as weapons of war. Now that European countries know they have to switch to renewables and nuclear power because most sources of oil and gas come from unreliable regimes then Russia is not going to have many big customers. The global switch to renewables, which are now cheaper than oil and gas, is going to make it very hard for Russia.
Like all other too. Like the atomic bomb. In the end the whole world lose.
The Russian oil industry will collapse quickly without outside oil infrastructure technology. Unless it's big, easy oil, the Russians can't drill or produce it with their own technology. Maybe China can fill in some of void left by the Western companies pulling out but I kind of don't think so, they don't have much oil so have never had a need to develop an oil drilling, producing equipment industry.
German Siemens pulled the plug from a huge RuZZian gasfield, Sakhalin. No one else is capable of delivering equally technical knowledge and equipment.
1:26 "Temperatures dropping as low as -27 celsius" **Laughs in Canadian**
The number is crazy high. Really -37C?
Alaskan here, went skiing up the mountain behind my house at -14 F today. No big deal.
@@itsmatt2105 Yeah that sounds like a reasonable skiing temperature to me. Actually had to take off some gear when I went skiing in Nevada once lol.
@@theredscourge Been solo climbing/ski mountaineering for decades now, sweat is an even bigger enemy than the cold. Tried a lot of the yuppie gear and materials early on, Goretex/breathable is pointless in the cold, mechanical ventilation is the best thing I've found. "Ventilation is more important than insulation" is the motto I came up with years ago. Being acclimated and not afraid to feel a little or a lot of cold first thing in the morning is important to keep from over dressing when you first pull out of camp in the morning. 10 or 12 minutes after you start working, the heat will come up and maybe that many minutes later you'll be starting to sweat. I'm fidgeting all day long with my clothing, I'll bet I rarely go more than 5-6 minutes all day long without adjusting something. Sleeves on wrists, ear band, mitten wrist skirts, pit and front zips, hood, I never leave anything get too hot or cold for very long. An ear band instead of a hat is probably the most underrated piece of gear, lots of people keep a stocking cap on and soak their head with sweat when all they wanted was keep their ears from freezing. Other tricks: you got to stay hydrated to stay warm but when you're melting snow for drinking water and you're out for 8-10 days, keeping hydrated can be difficult. I take a bunch of tiny sips of water all day long, it makes a little water act like a lot of water in your body. I don't take hot showers and use minimal, mild soap in the winter. Properly oily skin is hydrated skin is comfortable skin, especially in the cold. I use almost no salt or nitrates (in bacon) on my food starting a couple days prior to a trip, salt takes water to deal with in your body and your body has enough to deal with on the trip without being loaded up on salt, preservatives and chemicals.
@@itsmatt2105 Not gonna lie, you kinda sound like Bear Grylls lol. That was fascinating to read. The only thing I'd point out is it easily possible to become salt deficient eating a diet that specifically attempts to avoid salt intake, especially if you do a lot of physical activity. The average Western diet does not over or under consume salt, and as recent studies have shown that high salt intake is nowhere near as hazardous as it was previously believed, but that insufficient salt intake on the other hand is actually rather dangerous, especially for brain development in young people.
You know what's (not) actually one of the funniest things of the world, Venezuela basically committing the same mistakes the soviets did, it's like they were playing to a T the trope "Too Dumb to Live".
04:25 Shouldn't Norway be blue in this map? Blue is Nato countries, right? Green is neutral, and red is Warsaw Pact, also known as east block. Right? (Yugoslavia is gray, so that must be neutral/non-aligned too, but then why is Turkey not blue? I'm confused) Edit: Oh the blue countries must be EEC, the predecessor of EU. And since Spain and Portugal joined in 1986, the map is from after that year, and before the collapse of the Soviet Union.
Reminiscent of Alaska. Similar size, too. Could have simply said it's about one Alaska instead of 5 Texases. 😉