Thread by @shaunmmaguire

I was listening to the All In Pod this morning and @DavidSacks briefly mentioned the impacts to the German economy due to their dependence on natural gas from Russia

I've been obsessed with the chemicals industry since I was a kid and the story here is crazier than you'd think

Before starting, I want to say that I'm a techno optimist and I believe that Germany's decision to shut down their nuclear facilities was one of the stupidest political decisions in history

Most of their economy is based on turning energy into chemicals

Woke economic seppuku

The chemicals industry is absolutely massive, doing about $5T year in revenue

More than oil and gas!

Energy+chemicals are the yin&yang that form the bedrock of the global economy

The modern chemical industry effectively started in Germany

BASF alone did $92B in rev last year

This list blows my mind every time

It's the 50 biggest chemical companies by revenue

#10, Petrochina did $38.3B in 2022

#20, Shin-Etsu, $21.4B

#30, Sumitomo, $16.9B

#40, Westlake, $11B

#50, PTT Global, $9.7B

50 companies doing ~$10B+/yr rev!! 🤯

cen.acs.org/business/finan…

Industrial scale catalysis usually requires high temperature, high pressure, or both

This requires insane amounts of energy

BASF alone uses about as much energy as Costa Rica or Estonia

This is not a criticism -- BASF is an unbelievable company that everyone else depends on

BASF's corporate campus is effectively an entire city, in Ludwigshafen, Germany

The campus is more than 10 square kilometers and operates its own bus network to get employees around

This complex is primarily powered by natural gas, consuming way more natural gas than Denmark and about as much as Switzerland

report.basf.com/2022/en/manage…

BASF basically invented using natural gas to power industry. This is where things get crazy

In 1969, BASF took over a company called Wintershall which was Germany's largest oil&gas producer

Wintershall partnered with Gazprom in '90 and played a key role in both Nordstream 1 & 2

BASF pioneered a production method called "Verbund" where basically everything they do is integrated

Natural gas flow in, gets mixed with precursor materials and outputs flow from system to system to system like Willy Wonka's factory creating everything imaginable along the way

BASF warned 18 months ago that if its gas supply got cut in half, they'd need to shut down all production at Ludwigshafen

Excerpt from the economist

economist.com/business/2022/…

Germany has so far been able to avoid the worst as their gas reserves were full at the start of the War

But I couldn't help myself from sharing this quirk of history

The Nordstream pipelines literally wouldn't exist without BASF

The global economy is absurdly interconnected