As I have written elsewhere: “The truth is especially hard to believe if it requires that we take action—if it requires that we change. If humanity is to have a future, we must take action—we must change. If humanity is to have a future, we must believe the truth.
Andrew McKillop
In the 12 years after Cheap Oil Crusaders stormed Kuwait in 1991, the advanced industrial economies, or First World has reaped not only the Peace Dividend from the imploded and collapsed Soviet Empire, but also the giddy delights of oil at the ‘natural’ and very low price that New Economics sets for this Sunset Commodity. However, in 1991, cheap oil gave no growth dividend to the First World economy, nor a vote dividend to George Bush I, who was not re-elected. By a fatal error of timing, probably well noted by George Bush II, it takes time for those courageous, pro-active consumers to crawl away from their TV entertainment console playing smart missile clips, and start spending again. Well could George Bush I proclaim the New World Order had now ensured the ‘free flow’ of Cheap Oil, but “It’s the economy, stupid.” was a winning line for his Clinton rival. Exactly as in 1986 (when oil prices had plunged by two-thirds) there was no upsurge in economic growth, making low unemployment, and shopping malls stuffed with cheap manufactured goods from China, SE Asia and India unpersuasive in luring fickle voters to come back for more. A few more months proved necessary before the 1990s Clinton Boom lurched into being.
In the following years of ‘stable non inflationary growth’, and the near slump following George Bush II’s arrival in the White House, world oil demand increased by about 18% or 13 Million barrels/day (Mbd), that is about 25% more than the entire production capacity of Saudi Arabia. In the period from 2003-2010, if predictions of the International Energy Agency (IEA), or of the US Energy Information Agency (EIA) are proved correct, world oil demand will expand by about 1.8 Mbd per year, that is roughly another 13 Mbd in 7 years. Yet another “new Saudi Arabia” will be needed, simply to satisfy this additional demand. Such factors, surely, were taken into account by George Bush II and his American Century ideologues when calculating their Iraq War play. World population growth we can also note, results in about 1 Billion more consumers today, compared with 1991, and population growth will likely add about another 600 Million by 2010.
Now by definition the First World is rich, has low unemployment and even lower inflation, but its economic structure is a de-industrialised, service dominated husk totally dependent on cheap manufactured imports from the New Industrial Countries, which now include China and India, and on cheap energy imports from the world’s oil and gas exporters. The ‘mature service economy’ provides great potential for imagining the economy has little or nothing to do with farming, mining and industry. This fantasy, or lie is of course actively promoted, even presented as a proof of cultural superiority – but in fact the entire urban industrial system would collapse almost overnight without very traditional land tearing and metal bashing machines and industrial workers generating real and physical wealth from which the service economy extracts more, mostly imaginary ‘wealth’. Perhaps 60%-75% of all lower priced consumer manufactured goods in the First World are now supplied by cheap labour, industrialising economies. Without these players, and especially China, the Asian Tigers, Brazil, Pakistan and India, the First World consumer economy would plunge into severe recession. Cheap foodstuffs, including tropical foods that are often imported from countries with endemic malnutrition for a large proportion of their people, and above all cheap oil and gas, are the other two real pillars of the First World’s urban service economy, without which its fragile, degenerate kulchur would be thrown to the wind.
When not if this system collapses, probably through depleting oil and gas being impossible to maintain at ridiculous, artificially low prices, the implosion of the First World will likely be similar to that of its fallen traditional enemy and counter model – the Soviet Union or Evil Empire – which collapsed like a house of cards a few months after the Liberation of Kuwait. Exactly as for the First World, Soviet ideology proclaimed that Man’s dominion over nature and massive consumption of nonrewable fossil fuels would lead to an only marginally different Paradise on Earth. For the Soviet Union, however, those consumer goods never materialised, and it collapsed as surely as Saddam Hussein’s shrunken, impoverished regime. The First World, however, survived the Cold War, and the Oil Shocks of 1973-81, to extend its reach to the global level.
The Soviet model disappeared. It could only deliver turnip soup along with space flight and inherently unsafe nuclear reactors. It was eaten away by hi-tech war readiness and exploding personal consumption to the West, and by Moslem Fundamentalism and demographic pressure to the South. To the East, however, the People’s Republic of the world’s most populous country never pauses in its breathtaking industrial growth, its military and geopolitical expansion, and its fast growing dependence on imported oil that will surely bring it into conflict with what is so often and so wrongly called the world’s ‘only superpower’ of the USA. Pragmatism is the supreme virtue of Chinese ‘Marxism’, mirrored in its win-win model by the First World’s ‘attachment to freedom and democracy’. Both Chinese ‘Marxism’ and First World ‘democracy and human rights’ are empty doctrines. Both trace their origins to 19th century industrialisation and urbanisation, fuelled by King Coal. Almost certainly, within at most two decades, the US and China will enter open conflict for the world’ remaining oil and gas reserves.
Reaction in the First World to the impending collapse of the Soviet system in the late 1980s was of course visceral, building on heights of hysteria such as those attained in the McCarthy ‘protozoan era’ of US political history. Ronald Reagan’s hysteria slogan for the collapsing Soviet Union, the Evil Empire, is today joined by George W Bush’s Axis of Evil to describe a fluid number of countries, almost chosen by whim, that would either use Terror to threaten US leadership in its New World Order quest, deny the US and its allies of the moment access to cheap oil and gas, or both. Back in the early 1990s, the USSR or soon to be FSU (Former Soviet Union), was on the brink of collapse. Because of its large, only part-depleted resources of oil and gas, the FSU when twined with liberated oil from friendly Kuwait and continuing supply from servile Saudi Arabia, offered perspectives of ‘several decades’ of Cheap Oil. After the Oil Shocks of the 1970s and early 1980s this was sweet redemption indeed for the self-adulatory No Alternative politicians of the 1990s and their clones of today, regurgitating the roaring and whining ‘Neolibreal’ slogans of the Reagan-Thatcher duo.
This comic duo of hamfisted, spouting politicians made it plain they were ‘saving our civilization’, and Cheap Oil was an intrinsice, vital need in their quest. With amazing speed, therefore, the apparatus of hate that had been developed and maintained by the Neoliberal West during the Cold War against its traditional Soviet enemy was redefined and redirected. From the early 1990s any recalcitrant supplier of vital resources, firstly and notably Iraq, but then any country, state, regime, or ethnic group became a ‘targetable’ entity if it in any way menaced the supply of cheap energy and resources. Behind this new doctrine is the simple, and impossible objective of ensuring the perennity of urban industrial consumer kulchur, a mindless ‘doctrine’ of blind hedonism, greedy egoism, and the destruction of the planet’s life systems, ensuring mass dieoff within decades unless it is completely abandoned – but we are glibly told it is ‘the only thing we’ve got’. Supplementary reasoning for the particular obsession with Cheap Oil comes from the need to keep the First World’s army, its free market crusaders, operational and effective. It would indeed be discomforting, even humiliating to be short on jetfuel for bombing missions in the former Developing World, defined by Neoliberal economics as a reservoir of cheap natural resources and cheap immigrant labour: as humiliating as experiencing difficulty in lighting all 107-floors of the now disappeared but highly lamented World Trade Towers, day and night.
The New Order’s corporate structure is a fragile edifice built on a lack of democracy, a lack of personal identity and responsibility, lies, slide, inertia and smug self satisfaction in a world of ever increasing complexity in the interaction between Man’s enormous population weight and the biosphere. The complex countdown to zero of many environment and resource clocks however continues, including the ultimate in mass wipe-out of species on this planet (Reference/ ‘Ecocide’, Franz Broswimmer). Such facts are reacted to by real or feigned incomprehension by First World leaders and the vast bulk of their consumer citizens – by decree there is no threat to No Alternative economics and politics, or the fragile cultural “identity” of the First World.
Politically, the Cold War left behind an indelible strand of collective angst, of corporate paranoia in First World culture and cosmology, of menacing external forces lurking beneath the surface. This paranoia was easy to transfer to oil and energy supply threats when the demise of the Evil Empire left a vacant slot in the hate list. In simpler words – any threat of shortage for a thing so obviously a birthright and wherewithal of high-energy civilisation as the Sunset Commodity of petroleum or natural gas is and can only be due to evil intentions. By vigorous martial action, as in Desert Storm, though perhaps not in the derisory chaos created by Gulf War-2 in Iraq, the oil price will always be beaten back to ‘reasonable’ levels, goes the delirious ‘logic’. Oil War 2, in March-April 2003, like some poor selling video game, supplied a remake and repeat of the talk up in oil prices, then talk down of prices, that preceded and followed Oil War 1 in 1991. Business and financial milieux were initially radiant with joy, as can be expected, but the joy was very short-lived.
In 2003 the geological reality of depletion, like the proverbial wolf in the chicken coop, is installed and is rapidly gnawing at the ‘victory dividend’ of Cheap Oil. Those ‘several decades’ of Cheap Oil won by Desert Storm and from the USSR’s collapse have telescoped. World oil demand growth, even at the sluggish economic growth rates decreed as stable and non inflationary by Neoliberal good management, has quickly cut those ‘decades’ down and back to perhaps no more than one more decade before rout and riot are the only logical results of Do Nothing, market economics and its No Alternative political twin. This time around, unlike 1991, the finance column hype about “15-dollar-a-barrel” oil has been quietly shelved almost before it was dusted off, and pumped around the finance and business columns of fit-to-print, government friendly newspapers. Iraq, albeit with the second-biggest proven reserves in the world (perhaps 115 Bn barrels), should be compared with world oil demand running at the new record high attained in March 2003, of 80.3 Mbd. That is 29.3 Bn barrels per year, or “one Iraq every 4 years”. Oil War 2, very simply, was a desperate rearguard action against geological reality and geology will win, every time.
Beyond all this, the existence of at least one Enemy must play some vital role in the tortured minds of our leaders, ever expounding the bienfaits of what they call ‘democracy’, itself a shattered relic of former society and an early victim of New World Order doctrinal engineering. We have reverted to the purest expression of the 19th century metropole-colony economic and political model. What was once called the ‘Third World’ is now defined as a cheap supplier of various Sunset Commodities, and of economic migrants to serve as menial labour in an explosion of service sector activities shaped by corporate greed, that is need to turn a profit. Any country, territory or entity stepping out of its defined and imposed role model – once permitted to the OPEC nations in the 1970s – must now be bombed, strafed and occupied, with a malleable, servile puppet regime installed, mouthing democratic slogans while it delivers cheap resources. The doctrinal base of richworld leaderships, at least since the 1980s, permits no change in price for a thing so essential, but ‘easily available’ as oil and energy – easily available to the Global Market and its well armed forces, that is. In the 1970s and 1980s there had been a kind of economic Vietnam war with the Oil Shocks, and this had required the same energetic, obsessional rewriting of history needed for the Vietnam war, using all the guile and artefacts of Hollywood’s finest scriptwriters. For oil, and its price this was done in Ivy League economics faculties and the sharpest Think Tanks musing over 21st Century energy technology. Revisionism and denial, so important to any religious or doctrinal apparatus threatened by demonstrable reality, was rapidly applied in the environment, demographic and energy resource domains. We live with the results – confusion, disinformation and denial.
Cheap oil necessitated the rewriting of economics through the 1980s. The New World Order, more brazenly, has had to rewrite History. Its New Economy works to create and maintain structural surpluses of raw materials on commodities markets, by a range of real and fantasy procedures and measures that extend from technological progress through the recycling myth and Sunset Commodity propaganda, to economic destabilization and cruel, even savage neocolonial underdevelopment through ‘structural economic adjustment’. Whenever necessary, increasingly, and exactly as in the 19th century, gunboat diplomacy or rather helicopter gunship diplomacy, is used to ensure compliance. Just as the lifetime of Hitler’s preposterous 1000-year Reich was cut to nothing not only by allied saturation bombing but also by the loss of the Baku oilfields and the huge energy inefficiency of the Fischer-Tropf process for liquefying domestic coal, the New World’s heartlands will be increasingly threatened by depletion. In the coming decade, almost certainly, several oil and gas exporter countries, if they dare, will limit and then cease their exports to satisfy domestic demand. Their irreplaceable, high grade fossil energy resources will be seen as far more valuable to national survival than cheaply printed, wilting paper dollars, yen or Euro.
Underlying all this is the simple geological reality of fossil fuel depletion, symbolised by the Hubbert Curve with the 2003-2010 period being the exact midpoint. For a host of reasons – notably current production rates and demand growth for oil and gas – the downside second half of the curve will certainly be vastly shorter than the upside. In the period since around 1860, and the first commercial production of oil, world population has increased 6-fold, and energy use about 25-fold. The world development model presented as being ‘sustainable’ by New Economics in fact has a ‘useful lifetime’ measured in less than two decades. Yet it is presented as our only option. No alternative is feasible or imaginable. Debate on any alternative is swept aside as ‘idealistic’ or mischievous.
The impasse is watertight and lethal. Now that both history and economics have been rewritten we are only left with culture and religion as potential arenas for adaptation and change to what will be the greatest, probably the most chaotic and violent upheavals ever experienced by the human race. Perhaps our greatest, most rational hope should lie in the irrationality and unpredictability of human behaviour – perhaps for once Armageddon and Apocalypse will not be the automatic, default choices for the human race. We can but hope.
Reposted from Dieoff.org.
Reference: F Broswimmer, “Ecocide”, Pluto Press, 2002
Andrew McKillop is an economist, evironmentalist, journalist, and technical translator. He is working on a new book about the fossil fuel depletion —global warming crisis. He is a frequent contributor to the Energy Resources Yahoo Group, and occasionally writes for CommUnity of Minds, and other internet journals.