Thursday, 31 December 2015

ENERGY: HAPPY DAYS ARE GONE FOREVER?

Dick Pountain/Political Quarterly/Carbon Democracy 07/06/2012

Carbon Democracy: Political Power in the Age of Oil, by Timothy Mitchell. Verso. 278 pp. £16.99.

The Quest: Energy, Security and the Remaking of the Modern World, by Daniel Yergin. Allen Lane. 804 pp. £30.


Popular imagination intuitively grasps the importance of fossil hydrocarbon fuels in a way that—according to the author of Carbon Democracy—reflects quite accurately their effects on our lives. For example, our image of coal is slow, dirty, loud and dangerous: the grunting steam engine, the row of grinning, black-faced miners, muck and brass bands. By contrast, our picture of oil is fast, easy and fruitful: the sleek motor car, the spouting oil gusher, the instant colossal wealth of a Beverley Hillbilly or an Oil Sheikh. Both fuels became tied to Big Money, but in revealingly different ways that are explored by the two books under review here.

Renowned energy consultant Daniel Yergin’s The Quest and Columbia history professor Timothy Mitchell’s Carbon Democracy document the displacement of coal by oil as our primary energy source, and highlight the significance of this for world politics, but they do so at different scales and with different emphases. Yergin’s 800-page tome is a sequel to his Pulitzer Prize-winning work The Prize, which covered the early years of oil exploration and exploitation. Here he takes up the story at the 1991 collapse of the Soviet Union, moving through the bitter and dirty struggles to capture that former empire’s oil and gas resources, the Iraq war and its consequences for the politics of the Middle East, before arriving at the future security of oil supplies, the climate change debate and alternative sources of energy. Yergin analyses all these matters from a largely orthodox viewpoint of neo-classical economics and realpolitik. Timothy Mitchell’s far shorter work, on the other hand, concentrates on the history and politics of Middle Eastern oil mainly to enlist them as evidence for his grand and far-from-orthodox thesis about the influence of fuel sources on politics. His thesis is not merely plausible but reveals a significantly new way to approach political economy, and for that reason I will tackle it first, the better to compare later with Yergin’s more detailed chronicle.

Briefly summarised, Mitchell proposes that the political institutions of human societies are profoundly influenced by the types of energy flow they employ, and that in particular the coal-based economy of the industrial revolution permitted and provoked the rise of mass democracies, while its displacement by an oil-based economy is eroding those democracies. This approach implies a level of determination rooted in physics. All the energy consumed by early forms of human society came almost directly from the sun: photosynthesis supported those plants that are eaten by animals, and the wood used for dwellings and for fire. Hunter-gatherers consumed plants and animals directly from the wild while later agrarian communities domesticated and harvested them, but in either case energy consumption happened locally, with no need for extensive networks of energy transport—such rudimentary networks as did exist were more likely constructed of wood and stone.

That all changed with the Industrial Revolution, which was made possible by digging up buried coal deposits that were extremely localised. Iron smelting industries grew up where such deposits were located and spawned the invention of the steam engine, which was then adopted to power other industries elsewhere. That called forth a network of railways to transport coal all over the country, hauled by coal-powered steam locomotives, and this new class of machinery educated a workforce that was more confident and more skilled than the farm labourer. In Mitchell’s words:

Great volumes of energy now flowed along narrow, purpose-built channels. Specialised workers were concentrated at the end-points and main junctions of these conduits, operating the cutting equipment, lifting machinery, switches, locomotives and other devices that allowed stores of energy to move along them. Their position and concentration gave them opportunities, at certain moments, to forge a new kind of political power.

Thus the geographic concentration of skilled workers in cities led to mass trade unions, and the ease with which narrow energy conduits could be disrupted by strikes gave these workers the power to negotiate more egalitarian conditions of life. Thatcher’s defeat of the coal miners’ strike perhaps marked a definitive end to this phase of history.

Oil, unlike coal, almost mines itself, often spouting to the surface under its own pressure. To be sure, advanced technology is required to discover deposits and drill the wells, but the highly skilled workers involved are relatively few and they remain above ground, closer to managerial supervision and hence having far less autonomy than coal miners. Oil is a liquid that can be transported over vast distances by pipeline and tanker, demanding far less human labour than that required to load, unload and drive trains. Deposits are distributed over the entire globe, so at a single phone call, supplies can be diverted to counteract the effects of strike action in one location. In short, the switch from coal to oil greatly reduced the ability of labour to disrupt energy flows and handed this power instead to the oil companies, who thereby acquired the ability to threaten governments and dictate foreign policy. Mitchell proposes that this property of the oil economy was explicitly recognised by American politicians, and that the Marshall Plan for post-Second World War reconstruction was in part designed to switch Europe from coal to oil, hence reducing the political power of Communist-led coal miners and introducing US-style industrial relations. Certainly oil usage tripled from 10 per cent of European energy consumption in 1948 to over 30 per cent by 1960.

The concept of ‘sabotage’ is central to Mitchell’s thinking about energy flows. The everyday meaning of the term is a spanner in the works, a tactic any striking railway worker or miner might use to disrupt production, but Mitchell employs it in the special economic sense introduced by Thorstein Veblen, for whom it meant any ‘conscientious withdrawal of efficiency’, or ‘such restriction of output as will maintain prices at a reasonably profitable level and so guard against business depression’. Seen in this latter sense, sabotage is a tool employed far more often by oil companies than by labour. In direct contradiction of naive free-market dogmas, sabotage is what companies do to sidestep competition and keep prices high—and both Mitchell and Yergin demonstrate that the whole history of the oil industry is a succession of such acts of sabotage by the major companies. For most of the twentieth century there was always a surplus of oil in the world, threatening to drive prices too low for satisfactory profit. In the 1900s heyday of the Great Game rival empires competed for Middle Eastern oil concessions, not to extract the oil but to keep it from their enemies and protect their fields further east. Later they fought vicious battles for control over pipeline routes to Europe: Arab nationalist governments expropriated the oil fields and eventually formed the OPEC cartel, but far from displacing the oil giants, they became willing accomplices in restricting flow to maintain prices.

Mitchell’s arguments are subtler and less deterministic than such a bald summary might suggest. He enlists ideas from Thorstein Veblen, Bruno Latour, Karl Polanyi and many others to explain how energy flows intersect social relations, affecting even the ways in which we see the world:

... our world is an entanglement of technical, natural and human elements...we are not subjecting ‘society’ to some new external influence, nor conversely using social forces to alter an external reality called ‘nature’... We are re-organising socio-technical worlds, in which what we call social, natural and technical processes are present at every point.

Daniel Yergin’s The Quest is, in effect, two separate books. The first, consisting of almost 400 pages, presents histories of oil, natural gas and nuclear power, while the second covers the discovery of climate change and explains the range of non-carbon alternative energy sources and the prospects for a carbon-reduced future. His history of oil, starting as it does at the fall of the Soviet Union, still overlaps with much of Mitchell’s account in important ways. His accounts are far more detailed, highly readable and often quite gripping. Yergin does an admirable job of explaining the ferociously complex machine that is the world oil market: it is so complex that merely to summarise all the crucial players and events would be well beyond the space of this review. The main groups of players are the oil companies, who are global and have only limited national allegiance; the producer nations, most of whom now own their oil and depend heavily upon taxes (of up to 90%) from the oil companies who extract it; and the consumer nations, for whom the price of petrol is a crucial political variable—petrol queues can remove a party from power. Adding an extra layer of complication, America, the world’s most powerful nation, is both producer and consumer, and its political class is deeply penetrated by oil industry figures (think Bush père and fils and Dick Cheney). Under such circumstances, working out who will benefit and who suffer from any particular increase in oil prices is dauntingly hard.

The differences between Yergin and Mitchell’s interpretations of crucial events can be most instructive. In the chapter ‘The Demand Shock’, Yergin expounds on the effect of price deregulation, market speculation and rapidly growing demand from the BRIC nations (Brazil, Russia, India and China) on oil prices in the lead-up to the 2008 financial crisis. Higher standards of fuel efficiency for US automobiles set in 1975, during that earlier ‘oil crisis’, stagnated until George W. Bush announced in 2006 that the United States’ ‘addiction to oil’ had become a threat to national security. Yergin comments that ‘[f]uel-efficiency standards were no longer a left-right issue. Now they were a national security and a broad economic issue’. However, where Yergin buys into the US government’s concept of ‘energy security’, Mitchell devotes much space to deconstructing the notion.

Firstly, he observes that the 1973 OPEC embargo was not imposed primarily to raise the price of oil, but rather as a political reaction to the US decision to support Israel in the October War—an attempt to link the oil price to Israel’s progress in relinquishing occupied Palestine territories. Western commentators continue to ignore this, preferring what amounts to a vulgar Marxist interpretation in terms of oil profits. Mitchell suggests that the US’ interest in securing its energy supplies is less transparent than Yergin believes. In fact it revolves around the state of Saudi Arabia, which in its modern form was in effect constructed by the USA as a reliable ally to control (i.e. sabotage) world oil prices.

For Mitchell, the image of democratic, consumerist USA (symbolised by McDonalds) facing militant Islamic jihadists, driven by irrational and anti-modern hatred of the West, is a carefully constructed fiction that masks a duplicitous attitude which he labels with the rather contrived term ‘McJihad’. In 1930 Abd al-Aziz Saud, ruler of what would become Saudi Arabia, began negotiating with American oil companies to sell rights to Arabian oil. He had come to power in alliance with the muwahhidun, a militant movement of puritanical, Wahhabite nomadic tribes who only tolerated his courting of foreign oil companies on the condition that he applied much of the proceeds to spreading the Wahhabi strain of Islam throughout Arabia. The USA was perfectly happy with this arrangement, as the intensely conservative Wahhabism provided an excellent bulwark against Communism: ‘The geophysics of the earth’s oil reserves determined that the rents on the world’s most profitable commodity could be earned only by engaging the energies of a powerful religious movement’.

Fast-forward to the 1970s, with Soviet-friendly parties in power in Egypt, Libya and Iraq and the USA spending ever more to import Middle Eastern oil: the lucrative return trade in modern military equipment to Saudi Arabia and the Gulf states killed two birds with one stone. Going further still, Mitchell proposes that the US government and oil companies prefer perpetual low-intensity conflict in the Middle East, both to sustain arms sales and to prevent significant cooperation between the nations that might oppose US interests. This was for him sufficient motive for the 2003 Iraq War (what the RETORT collective has called ‘a neo-liberal putsch’: see their Afflicted Powers: Capital and Spectacle in a New Age of War), whereas Yergin prefers to toe the official line of revenge for 9/11, threats of WMD, etc.

And so, finally, on to climate change. Both authors accept the scientific evidence for anthropogenic climate change caused by burning fossil hydrocarbon fuels. Both agree that doing anything to combat it will require burning far less oil. Neither is very confident that any alternative energy source such as nuclear, wind, geothermal or solar power is capable of wholly filling the gap, particularly for transport applications, and neither can offer concrete proposals about how to achieve such a reduction politically. Mitchell theorises that the transition from coal to oil-based energy systems during the mid-twentieth century induced a separation of ‘the economy’ as an object of study for economists: this creation occupies a strange limbo level between the natural and the social, which economists busily populate with the price of everything. In his own words, ‘Democratic politics developed, thanks to oil, with a peculiar orientation towards the future: the future was a limitless horizon of growth. This horizon was not some natural reflection of a time of plenty. It was the result of a particular way of organising expert knowledge and its objects, in terms of a novel world called the economy’. The ease with which oil spurts from the ground and the seemingly endless uncovering of new fields foster this dangerous illusion and make it the master of politicians, whose purpose becomes to nurture and serve ‘the economy’ rather than the people.

So long as politicians listen to economists suffering from this delusion, and so long as the vast populations of the BRIC countries and the rest aspire to live like the West, there is little chance of enforcing effective carbon curbs. It is more likely that the price of oil will rise steadily as demand outstrips the rate of discovery of new reserves, while the rising food prices as climate change bites amplify the effect, engendering xenophobic nationalism and war. Mitchell ends rather weakly with a warning about the erosion of democracy and a call to recognise the passing of the era of fossil fuels, while Yergin remains resolutely inside ‘the economy’ and its promise of continued growth. He hopes that technical innovations and market forces might come to our rescue, but it’s a very guarded optimism: ‘There is no assurance on timing for the innovations that will make a difference. There is no guarantee that the investment at the scale needed will be made in a timely way, or that government policies will be wisely implemented’. Whatever happens, however, both of these books have offered invaluable contributions to the necessary debates.

[Dick Pountain, London, Aug 2012]