Capitalists and the energy crisis

Phil Gasper’s “Critical Thinking” Column (“The end of cheap oil,” ISR 60, July–August 2008), is an excellent account of the reasons behind the skyrocketing energy costs, and the competition to control energy resources by the U.S. and its competitors. The article does a great job of explaining how both speculation and increased demand have pushed the oil prices to unprecedented levels. It details the drive by the U.S. to gain leverage over China by controlling energy resources, and shows how this competition is driving military spending and a new generation of weapons.

However, there is one point Phil overlooked which I would like to raise. Phil argues that, “to make any beginning on such a project would require wresting large quantities of economic resources from corporate control and radically democratizing the entire political process” and, “At the very least this would require the emergence of social movements on a scale…not seen since 1930’s.”

While a restructuring of today’s cities, the introduction of mass transit, etc., may indeed involve the emergence of mass movements, I think the way the argument is posed underestimates how much sections of the ruling classes, here in the U.S. and abroad, have opened a debate about how to come to terms with the energy crisis—a real crisis, which, even from the perspective of capitalism itself could be lethal to the system, and could very well mean some restructuring and even investment in mass transit. The subtitle of the article, “Capitalism has no solution to the world’s energy crisis,” underestimates the ongoing debates within the ruling class to find solutions.

Ming Li, quoted by Phil, is correct to say that capitalism will find it difficult to overcome the decline in oil resources. However, there are those in the ruling class who are pushing for developing alternatives to head off such a crisis—this includes conservation, recycling and “going green,” not just as a PR ”green-washing” of corporate America; it includes developing and bringing other energy resources (both alternative energy sources and nuclear power) online, and it involves seeing how to reorganize society to better tailor energy sources to usage.

The impetus for change may come from mass movements, but the capitalist class itself is trying to deal with this crisis and make a change in energy policy also. This reorganization is necessary for capitalism itself. Every reputable source, from the International Energy Administration to even the U.S. Department of Energy (hardly radical sources), now talks of potential peak oil production in the next 20-40 years.

Capitalism for the past century has come to rely on petroleum to power its production. Now capitalism, as a system that relies on growth, has to find alternatives to power its production in the coming decades. If the transition to off-load part of the energy burden away from fossil fuels (especially petroleum) is to be done with the least shock to the system, this requires “moving resources” to develop alternatives and changing energy consumption patterns and planning to reorganize energy production and even distribution networks today. Sections of capital are pushing exactly for this “longer term” perspective to stabilize the system, to take precedence over just the “short term profit” of individual corporations.

This can be and is becoming an arena for new competition, investments and profit in itself, and there is already jockeying for position among corporations and energy (not just oil) companies.

As just one example, energy giants BP and Amoco, DuPont (Chemicals and Materials), ALCOA (aluminum and metals), GE (main player in the nuclear industry), Duke Energy (of Harlan County coal fame and owner of Seabrook, New Hampshire Nuclear plant) are actively lobbying Congress to enact a carbon tax, which will give them a leg up on the likes of ExxonMobil.

There is of course a tension and an ongoing fight, since short-term profit is usually the be-all and end-all—and especially has been in the neo-liberal, everyone-for-themselves, cut-throat, race-to-the-bottom model of the past years. But there is precedent for long term thinking to save the system—with the state acting as a moderator, as” the executive committee of the ruling class”(The Freddie Mac /Fannie Mae bailout is just a small recent example).

There is no question that the burden of this shift will be pushed onto us in the form of higher prices, austerity, and moralizing (working people should consume less). And there is no way to know how open this debate will become or how it will get settled.

But it is important that there is now a debate within the ruling class about energy policy, (reflected in every recommendation of the International Energy Agency, the clearing house for international energy debates) which is seriously discussing a shift from a perceived unsustainable reliance on petroleum as the overwhelmingly dominant source of energy.

Let me end with 3 points about the importance of this debate:

  1. This does not mean oil will become less important. The need for developing and shifting to other energy resources does not contradict, but complements the continued importance of oil. With limited resources and increasing demand, oil will continue to play a central role and there will even be more competition for its control as other sources are developed.
  2. If sections of the ruling class do tack in the direction of the necessity of changing direction and developing alternatives (Gore has taken the lead today) then there is also a chance that some critics of big oil today and those against U.S. reliance on oil or “foreign oil” will back this new turn (even with its xenophobic and anti-Arab undercurrents).
  3. This debate over energy policy, if opened publicly can be a great opportunity for those on the Left to take part in and shape it.

Saman Sepehri,
Chicago

Issue #71

May 2010

The education shock doctrine

Issue contents

Top story

Editorials

Features

Critical Thinking

Reviews

  • The next debt bubble

    Petrino DiLeo reviews The Buyout of America: How Private Equity will Cause the Next Great Credit Crisis by Josh Kosman
  • Eyewitness to revolution

    Dennis Kosuth reviews The Year that Changed the World: The Untold Story Behind the Fall of the Berlin Wall by Michael Meyer
  • Women in the American gulag

    Lee Wengraf reviews Interrupted Life: Experiences of Incarcerated Women in the United States edited by Rickie Solinger, Paula Johnson, Martha Raimon, Tina Reynolds and Ruby Tapia
  • Real data on same-sex marriage

    Ragina Johnson reviews When Gay People Get Married: What Happens When Societies Legalize Same-sex Marriage by M. V. Lee Badgett
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