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June 9, 2026

The abundance illusion

Jeff Currie

Senior Advisor

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In February 1977, Jimmy Carter addressed the nation from the White House library wearing a cardigan sweater. The thermostat had been turned down. The message was unambiguous: energy is finite, security is earned, and comfort has a cost. Two months later, in what became known as the Moral Equivalent of War (MEOW) speech, he named the program to build a secure domestic energy base the ‘energy transition’ — a term that had nothing to do with the environment and everything to do with what happens when a foreign power controls your fuel supply. Nixon had already launched Project Independence; Ford had signed the Strategic Petroleum Reserve (SPR) into law.1 Carter was naming the security imperative every serious government already understood in private: the most irreplaceable input to the modern economy was also the most geopolitically exposed. The press named it MEOW and Congress ignored him.<br>When Carter told Americans the energy shortage was a crisis, the admission was honest and politically fatal. His political successors drew the obvious conclusion, and thus the abundance illusion was born: never admit to scarcity. Fear may drive policy, but greed is what gets the votes. And thus the template became reassure markets with words and hundreds of millions of barrels from strategic reserves and hope that talking down prices would bridge the gap until supply returned and the problem quietly resolved itself.<br>It has worked for every US Administration since Bush Sr. The inventory buffer became the policy. Consume the insurance, call it abundance, and avoid the pain of rebalancing. The hard work Carter asked for — building the physical capacity to never need the buffer — was quietly abandoned. The energy transition gradually became an environmental project, eventually losing much of its security logic and curdling into a polarised fight over green and brown that has lasted a quarter century.<br>That template is being applied again today — and markets have accepted it. Prices have fallen nearly 20% from their 2026 peak. A Goldman Sachs survey of 839 institutional investors conducted between June 1 and 3, 2026 found a record two-thirds expecting oil prices to fall further — the most bearish reading in the ten-year history of the poll. The same bearishness is visible in energy equities sold to pre-war lows and long-dated futures pricing a swift return to normality. This confidence has created both physical and financial destocking in hopes of buying lower in a matter of weeks — the abundance illusion reproducing itself one position at a time. China’s decline in crude imports has become the consensus explanation — the world’s largest importer facing “demand destruction,” the market rebalancing rationally. It is a compelling narrative, but in my view it is also wrong.<br>China and the New Joule Order<br>One country never made the West’s mistake. Fifty years after Carter’s speech, China has executed on what he asked of the West — without ever making environmentalism the justification. While Washington and Brussels argued about green and brown, Beijing simply built both. Whatever the climate benefits, China did not build 1.2 terawatts of solar capacity primarily for them. It built that capacity because it understood the MEOW lesson better than Carter’s own successors — security first, with decarbonization as a welcome dividend.<br>The country that controls the electron controls the joule. Every gigawatt of domestic generation is a gigawatt that does not transit the Strait of Hormuz, the Red Sea, or the Malacca Strait. Every EV on a Chinese road is a barrel of Iranian crude that no longer needs safe passage through someone else’s water. And ultimately the country that controls the joule controls the AI race.<br>This is the New Joule Order (NJO): the era in which the security premium becomes the dominant force in energy markets. Electrification is the purchase of optionality — an electron can be sourced from oil, gas, coal, sun, wind or nuclear, while the combustion engine is married to a single fuel that must transit someone else's chokepoint. China has been building toward it since the 1990s. The West is still debating it — and the gap is now measured not in conference emissions pledges but in barrels per day, inventory levels, and the declining usable capacity of strategic reserves.<br>What looks like demand destruction...