Chapter 369
Translator: crow
Chapter Title: Triple Low Boom
If the first blade to suppress America was the information revolution,
then the second blade was low oil prices.
"Low oil prices to take down America? I don't get what that means, but it won't be as easy as it sounds, right?"
That wasn't wrong.
In a situation where oil-producing countries, finally getting a taste of the sweet life, had no intention of letting prices drop willingly, how could oil prices be forced down?
The chance of those oil producers agreeing to lower prices was next to zero.
"Th-there's a way."
Even without changing actual oil production volumes, there were cases where prices fell.
"We've used a trick like this before."
It was a method that played on "human psychology."
I decided to kick off the groundwork first.
Our Vice Minister of Economy visited Saudi Arabia and brought up the topic.
"You're using oil for thermal power generation in Saudi Arabia, aren't you?"
"And?"
"If you think about it, isn't burning oil for that honestly a waste?"
"Got any viable alternative?"
"Oh, we do."
We proposed developing gas fields in Saudi Arabia and switching thermal power to "gas."
"That way, you reduce air pollution and export more oil—killing two birds with one stone."
"We'll consider it."
To Middle Eastern countries, we pitched developing gas fields while offering to build low-cost gas-fired power plants.
"Do we really have to?"
Middle Eastern countries didn't exactly see oil as precious, so they weren't thrilled.
"That's like chum that won't attract any fish."
This was merely laying the groundwork for what was to come.
Next up: the main act.
It was time to unveil a new technology that would rattle current oil prices.
"You've got a technology like that?"
That technology was coal liquefaction.
"Coal liquefaction? Isn't that the tech the Nazis desperately milked during World War II?"
"You're right."
During World War II, Germany had met 90% of its fuel needs through coal liquefaction.
"I hear it has awful economics. Doesn't it cost $30 to produce one barrel of oil? And that's not even counting facility costs."
"That's the Nazi-era version. You have to factor in that today's coal liquefaction is an improved 'edition' that South Africa picked up and refined."
"Even so, isn't it still economically unviable? What's the point of digging up that ancient relic?"
"Well, it can serve as a tool to drive oil prices down."
To that end, I placed an order for a synthetic oil plant with Sasol, South Africa's world-leading synthetic fuels company.
With South Africa in turmoil from the regime change between black and white rule, Sasol eagerly accepted.
I promoted it as a means to achieve "oil self-sufficiency."
"Through coal liquefaction processes, we'll boost the Republic of Korea's oil self-sufficiency. First, we'll secure 100 million barrels of oil per year via coal liquefaction."
Of course, I had no real plan to produce 100 million barrels from coal.
This was a bluff meant to fool the world.
Why?
The economics just didn't work.
Sasol's synthetic oil had a breakeven price around $25 per barrel.
Factor in plant investment costs, and it couldn't compete with conventional crude.
So why even mention such a flawed product?
"Shipping costs are low."
Coal was a resource virtually every country could mine.
Synthesize it right where you dig it domestically, and transportation costs plummet.
That made synthetic oil plants a serious weapon that could threaten oil producers.
Still, the effects weren't immediate.
Even after we commissioned the plant from Sasol, oil prices stayed steady for a while.
'I saw that coming.'
The markets figured that even if Korea jumped into coal liquefaction, it would take time.
Time to play the next card.
The next card was shale.
"Massive Shale Deposits Discovered in the United States!"
I ran frequent stories about shale oil finds in Texas and China.
Oil producers initially brushed it off.
"What's the big deal? Shale's nothing special. Does it even make economic sense?"
But then they remembered something they'd overlooked.
"Hydraulic fracturing!"
I'd previously released hydraulic fracturing tech to the world for free.
The Seven Sisters had been refining it on their own.
Apply that tech to shale now?
Would it still lack viability?
Regrettably, the oil producers couldn't claim it did.
"Shale's viable even at $30 oil, once you account for transport. And it hits right at peak prices?"
"Shit, goddamn it. Why massive shale in the US and China of all places?"
The instant they clocked the scale of developable shale, prices began to drop.
"Hold on tight. It's plummeting."
Fear feeds on itself, accelerating the fall.
Korea's previously ignored coal liquefaction plant now fueled the downward spiral.
"What happens if Korea gets serious about coal liquefaction?"
"Pyongyang's the type that could whip up something scarier than shale."
"One answer: crash the price to kneecap shale and coal liquefaction."
OPEC opted to slash prices and block these new rivals(?).
"Aw, fuck. We were gearing up to mine some shale ourselves."
Companies prepping shale operations pulled back at the sight of falling prices.
The issue was how differently each producer felt the chill of the drop.
"Our production costs are $1 a barrel—we're fine down to $15."
Saudi Arabia could say that.
But nations like Venezuela or Iran, saddled with high refining or extraction costs, saw it differently.
"That's your view. If prices have to drop, we'll ramp production to claw back revenue."
"Hey! Ramp up and you tank prices further—don't you get it?"
The producers' alliance cracked fast.
"Forget it—we secure our share. Daily production up 1 million barrels!"
"What?"
"Can't let you outdo us. Ours up 1 million too!"
"Y-you traitors. You ramp up, I lose as the only cutter. Fuck it, we're ramping too."
Selfish betrayals snowballed, sending prices into freefall.
Talk about a prisoner's dilemma.
This was the prisoner's dilemma.
Now producers, desperate for every last drop to export, revisited offers they'd previously scoffed at.
"Might as well develop those thermal gas fields too."
Production surges and gas developments piled on.
Oil didn't need long to crater to $10.
"Supply balloons like that—no way prices stay high."
Producers' tears of blood became the global economy's boon.
"Now we can breathe."
The world economy took flight on cheap oil.
I rubbed my hands, having prepped for this.
"Time to crank exports."
Korea's long-stalled export engine roared back to life.
With every indicator climbing, inflation plunged.
"The economy turns around this fast?"
Low oil. Low prices. Low dollar.
The Triple Low Boom dawned.
The regime's approval ratings soared as a result.
"Time to ditch useless contracts."
I canceled the synthetic oil plant order first.
"Pardon? Not building?"
"Prices tanked—no point. Penalty paid, so no long faces."
Running the plant to break even would've needed prolonged high prices anyway.
Possible?
Honestly, slim odds.
Why?
‘My hydraulic fracturing giveaway.’
It capped oil's ceiling.
Even catastrophes wouldn't change that.
Prices peak? Shale ramps up, flooding supply.
Prices crash again.
Savoring cheap oil's gains, I maxed out exports.
America tasted the perks too.
But theirs rang smaller.
Simple reason.
Self-sufficiency was their baseline.
"So America doesn't export at all?"
Hardly.
Relative to its economic heft, exports were modest—but absolute scale was massive.
US exports hit $200 billion yearly.
World number two.
No match for Korea, though.
"And Korea?"
"$280 billion."
Korea shipped $280 billion in goods worldwide annually.
Even that was tempered by global slump.
"World one's barely ahead of two?"
It happens.
Korea was an economic juggernaut laying waste to global industries.
That killer edge made the US gap unsurprising.
With Korean goods so dominant, America's $200 billion still flowed thanks to high-income Europe across the pond and de facto empire over the Americas.
'No real envy there.'
America's playground was the First World. Ours: the globe.
I planned to solidify national foundations while our export juggernaut crushed America's.
But the world had other ideas.
"Minister, democratization protests have erupted in Nanjing."
Crisis in Nanjing—one of EA's three pillars.
This might be the Republic of Korea's darkest hour yet.
I called for an emergency security council.