• The Dec 7, 1941 attack on Pearl Harbor was largely about oil
  • The US Navy protects oil resources the world over
  • It doesn’t protect renewables, which is telling

Late on 6 December 1941, Admiral Nagumo’s carrier force arrived to within striking distance of Pearl Harbor, Hawaii. The Japanese had crossed the Western Pacific under strict radio silence, going so far as to rely entirely on traditional light and semaphore signals to relay orders and other messages back-and-forth between the dozens of ships comprising Kido Butai, the Japanese name given to the fleet.

The following morning, they launched over 400 aircraft, mostly armed with bombs and torpedoes. Their target was the home port of the US Pacific Fleet, at which dozens of ships of the line were at anchor.

Achieving total surprise, the Japanese sank or damaged numerous ships before returning to their carriers, losing only a handful of planes in the process. They had won, hands down, a great tactical victory. But it was only one spectacular part of a much grander, more ambitious strategy.

Months prior, the Japanese leadership had already agreed that it would eventually break off negotiations with the US over the oil embargo that had been imposed earlier in the year in response to Japan’s invasion of French Indochina. The embargo was economically crippling, as Japan had no domestic oil resources and the Dutch had already curtailed oil exports to Japan from their Indonesian fields.

The US insisted that it would not lift the embargo unless the Japanese not only withdrew from Indochina but agreed to an eventual withdrawal from occupied China too. That was a non-negotiable for the Japanese, who were heavily reliant on raw materials from China to power their economy.

Having given up on diplomacy, the Japanese strategy now was to take effective control over the entire Western Pacific by force. They tasked a group led by Admiral Yamamoto to come up with a plan. As explained above, Pearl Harbor was but one important part.

On the same day as the Pearl Harbor operation, the Japanese also attacked multiple British, Dutch and American targets in Southeast Asia. By knocking out the US Pacific Fleet preemptively, the Japanese were confident that they would buy the time necessary to establish a formidable defensive position capable of resisting any subsequent US, UK or Dutch attempts to kick them out.

With such consolidated regional power, Japan could then set about assimilating the vast oil fields and other natural resources of the South Pacific. They would thereby build an empire on par with the Europeans and Americans, whom they so admired and envied.

The Japanese leadership saw this as their Manifest Destiny. And this destiny depended on securing access to oil and other critical natural resources.

The rest of the story is well known. The US Navy drew up its own plans to take control of the Pacific. The battles of the Coral Sea and Midway followed in 1942, the latter a massive US victory.

Some naval historians consider Midway the critical turning point in the Pacific theatre. Others claim Guadalcanal. It doesn’t really matter. As the US Navy steadily tightened the noose, Japan eventually ran out of oil and just about everything else it needed to fight, other than sheer national willpower. But even that wasn’t enough following the total destruction of Hiroshima and Nagasaki by atomic bombs.

Pearl Harbor, for all its historical significance in bringing the US into World War II, was just the indirect result of a regional imperial tussle between Japan, the UK, the Netherlands and the US for control of oil and the other natural resources of Southeast Asia.

The US Navy’s relationship with oil has only grown since. Today, the US Navy has a presence in nearly every part of the world’s oceans and littorals where oil is produced, refined and transported.

As I type, this includes the Gulf of Oman — the “mouth” of the Persian Gulf, as it were — and the Eastern Mediterranean. There are plenty of other examples.

That the US Navy still devotes so much of its attention to protecting fossil fuel infrastructure, notwithstanding the widespread development of alternative energy resources in recent decades, is telling. If the various green and renewables projects that have come online had delivered as promised, perhaps the US Navy would be rather more interested in protecting offshore wind farms or other renewable energy infrastructure.

After all, actions speak louder than words. Money talks too. Much money has been thrown at wind, solar and other green and renewable projects and still is, yet much of it seems to just blow away without much effect. Some of it also reeks of so-called “greenwashing” or even outright corruption.

As if we needed any more evidence that net zero was and remains a pipe dream. My colleague Nick Hubble has recently published a book, Threat Zero, demolishing the mainstream net zero narrative in depth. I strongly recommend it.

From an investment perspective, while net zero may be a fantasy, the energy sector is very real indeed. There is arguably as if not more opportunity in this sector than any other. Artificial intelligence may be all the rage, as it is relatively new, but the powerful, air-conditioned servers on which it depends are consumers of energy. The chips that comprise them consume energy to produce.

On the surface, tech might seem like a relatively “green” or even “renewable” sector, but this is merely the veneer. What lies beneath is affordable, abundant energy, the security of which is entrusted, in part, to the US Navy’s presence, whether seen on the surface or, as with submarines, unseen deep under the waves.

Until next time,

John Butler
Investment Director, Fortune & Freedom