We live in a time of amazing technological, economic and social progress where large segments of global society have attained relative prosperity and improved living conditions. We are interconnected like never before and by historical comparison the world is more peaceful than it has ever been.
At the same time, there are hundreds of millions of people still living in abject poverty and hunger. We have been making a concerted effort to try to alleviate their situation and bring more and more people out of extreme poverty under the framework of the Millennium Development Goals. As we go forward, surely we will not let this progress slip away.
But there is always that niggling doubt. How can we sustain a complex global society in a finite world with exponentially growing numbers of people and an economy that consumes vast resources just to keep running on the spot?
I worry about whether we will allow ourselves to get pushed beyond the limits to growth that Dennis and Donella Meadows warned us about back in 1972. We have done very little to alter that trajectory and my concern is that we will find ourselves fighting over a declining resource base as some like Michael Klare suggest.
Richard Heinberg is one of those rare insightful individuals with foresight and a sound understanding of contemporary affairs. His 2003 book, The Party’s Over — Oil, War and the Fate of Industrial Societies, published at the start of the Iraq War, explores the notion of a world without cheap oil and the potential for resource related wars. In response to this possibility, he recommends that the world implement a global programme of resource conservation and cooperation. The alternative is too dreadful to think about since it may represent the breakdown of modern civilization.
But how is it that oil became so strategically important and why is it linked to wars? Why is it that a world with less oil is viewed as analogous with the decline or even collapse of industrial societies? To better understand, we need to look back by around 100 years.
1914–1918 Great War
This year is the 100th anniversary of the Great War and a time that European nations in particular are commemorating those tragic events and the terrible loss of life. It is hard to imagine what the world looked like in 1914. It was a time dominated by European empires stretching across the globe connected by major shipping routes to support the trade in raw materials from the colonies and manufactured goods from the colonizers.
Britain was prosperous and London was a hub of global commerce, connected to the world via wireless telegraphy. The British had not been involved in a conflict on the European continent since the 1853–56 Crimean War, although colonial wars were frequent.
The 1814–1815 Congress of Vienna (precursor to the League of Nations or even the United Nations), where the major powers had come together to redraw national boundaries, had proved successful. The balance of power in Europe had been maintained and prolonged periods of war had been avoided (the exception being the 1870–71 Franco-Prussian War). Some at the time may have hoped that there would never be another war in Europe.
In school we were taught that it was the assassination of Austria’s Archduke Franz Ferdinand in Serbia on 28 June 1914 that ignited World War I, although we now appreciate that this assertion is too simplistic. Another possibility is that the Germans wanted and had been preparing for this war. We can certainly point to the 1905 Schlieffen Plan that illustrated how Germany could rise victorious from a war fought on two fronts: France to the west, Russia to the east.
But perhaps one of the most provocative recent analyses comes from the British historian, Niall Ferguson. In his 2000 book entitled The Pity of War, Ferguson argues that fear was a key factor in shaping European sentiments at that time. The Russians wanted to reassert themselves after their embarrassing defeat to Japan in 1905. The Germans and Austrians feared a growing Russia, and the French and British feared a powerful Germany.
He also presents another possible explanation. He argues, in an essay entitled “Complexity and Collapse — Empires on the Edge of Chaos” that the Great Powers and empires were complex systems and that they operated in a state “somewhere between order and disorder”.
“Such systems,” he continues, “can appear to operate quite stably for some time; they seem to be in equilibrium but are, in fact, constantly adapting. But there comes a moment when complex systems ‘go critical’. A very small trigger can set off a ‘phase transition’ from a benign equilibrium to a crisis.” The end result can be war, revolutions, financial crashes and imperial collapse. In this context, our world today is not very different from that of 1914.
The Great Oil Game begins
It was Winston Churchill, then Britain’s First Lord of the Admiralty, who made oil the strategically important fuel that it is. Together with Lord John Fisher, he proposed in 1911 that the British Royal Navy switch from coal powered ships to oil. The change was necessary in order to keep pace with the German naval build-up, with oil being viewed as a superior fuel. The conversion took seven years to complete and resulted in the maintenance of oil supplies becoming a strategic military objective.
The first target for investment was the Anglo-Persian Oil Company (APOC) that had been set up in 1908 to explore and extract oil from what is now southern Iran. On 14 June 1908, just weeks before the commencement of hostilities in Europe, Winston Churchill succeeded in getting the British Government to invest £2.2 million in APOC, as explained by Daniel Yergin in The Prize — The Epic Quest for Oil, Money and Power.
Clearly, the British were not alone in recognizing oil’s potential and there are some who argue that Germany’s proposal to construct the Berlin to Baghdad railway as well as their close ties with the Ottoman Empire caused great concerns for the British. This could explain why, within months of the war beginning, British troops landed in Mesopotamia (now Iraq) in November 1914 to defend the APOC oilfields around Basra.
The strategic significance of oil was to remain constant throughout the Second World War. For instance, the Japanese in 1941, facing oil embargoes from the West, attacked Pearl Harbor and invaded the Dutch East Indies for the oil resources. Likewise, the Germans, having limited local oil resources, sought to capture the Baku oil fields in the former Soviet Union in 1942.
Following the Second World War, we have other examples. At the time of the first oil crisis in 1973, we see that the United States Congress, seriously concerned about the potential for oil supplies to be cut off, ordered an investigation into how it may be possible to use military force to gain access to oil supplies in the event of a supply disruption.
The report, published in 1975 and entitled “Oil Fields as Military Objectives” concluded that the risks associated with military action in the Middle East were too high, the prospects of success were poor and the consequence of failure would be disastrous. One unknown factor in this assessment was the possibility of a Soviet response to US military interventions.
The party’s over
The picture looked very different in 1991 during Operation Desert Storm and even more so in 2003 with the full invasion of Iraq, where the oil fields were occupied quickly. The Soviet Union was no longer a threat thereby reducing the risks of such operations. As former Chairman of the US Federal Reserve Alan Greenspan was to admit in 2007, the invasion of Iraq was all about oil. And that is what makes Heinberg’s 2003 book even more compelling. What Heinberg suggested in his book was that we are close to a peak in global oil production. Although this assertion has been contested, very recently there have been a number of studies that appear to confirm Heinberg’s claims.
In January 2012, for example, James Murray and David King published a paper entitled “Oil’s tipping point has passed” in which they note that global crude oil production has been capped at about 75 million barrels per day since 2005 — even in the face of continued price increases. As oil prices go up, you would normally expect that it would be profitable to produce more oil and supply should increase. For this not to happen, something must be fundamentally wrong.
More recently, in January 2014 the UK Royal Society published “The Future of Oil Supply” that looked at all the data and concluded that a “sustained decline in global conventional production appears probable before 2030 and there is a significant risk of this beginning before 2020”.
Third, Steven Kopits from Douglas-Westwood, one of the world’s top energy research groups, gave a lecture in February 2014 explaining how oil production by the major oil firms has faltered in recent years (dropping from 16 million barrels per day in 2006 to 14 million in 2012) while capital expenditure doubled (from US$109 billion to US$262 in the same period). Consequently, some high cost exploration and extraction projects are being abandoned. This led Gail Tverberg, a researcher and commentator on energy issues, to ask whether we are witnessing the beginning of the end of the oil industry as we know it.
What does this mean for the future?
Back in 2005, in his book The Long Emergency, James Howard Kunstler explored the consequences of a peak in world oil production and the fact that this would coincide with the forces of climate change, resurgent diseases, water scarcity, global economic instability and warfare. He essentially portrayed our future with less oil as a long, drawn-out and painful emergency.
More recently, international security scholar Nafeez Mosaddeq Ahmed, writing in the Guardian newspaper on 28 February 2014 explained contemporary riots as being symptomatic of a world without cheap fossil fuels. He argues that the financial crisis and food riots of 2008, the Arab Spring in 2010–11 in Tunisia, Libya and Egypt, and the 2013–14 riots in Venezuela, Bosnia, Ukraine, Iceland and Thailand are symptoms of the long emergency unfolding before our eyes.
Other commentators have come to the same conclusion. The military in different countries have been warning of tensions around the world in the face of declining oil supplies. The US Joint Forces Command’s “Joint Operating Environment Report” is a good example as well as another from the German Bundeswehr Transformation Center. Both reports were published in 2010.
But what does this mean for nation states? Jorg Friedrichs of the University of Oxford explores how countries might respond to fuel scarcity in his 2013 book The Future Is Not What It Used to Be. He argues that we should look at the past experience of Japan, North Korea and Cuba to draw lessons about what different nations may do when they have reduced access to oil supplies.
As mentioned above, in the period from 1918 to 1945, Japan faced oil and other resource embargoes from the Western Powers and was presented with two options: economic collapse or militaristic expansion to grab those resources. We know how that turned out.
In the 1990s, both North Korea and Cuba faced a situation of fuel scarcity after the collapse of the Soviet Union. In North Korea the governing class turned towards totalitarian retrenchment while in Cuba we witnessed a far more positive form of socio-economic adaptation (more local production of food, widespread adoption of permaculture, and adoption of a diet containing less meat).
Friedrich concludes the following with respect to how countries will respond to fuel scarcity. First, those with a strong military potential and the perception that force is more effective than the free market in protecting access to vital resources are more likely to adopt predatory militarism.
Second, countries with less experience of humanism, pluralism and liberal democracy, are more likely to have elites willing and able to impose a policy of totalitarian retrenchment on their population.
Finally, countries with less exposure to individualism, industrialism and mass consumerism, are more likely to pursue adaptive regression to community-based values and a subsistence lifestyle.
But surely there is another path based on enhanced international cooperation. If we understand that we all lose when we fight over diminishing resources, then the answer is to avoid conflict at all costs and to set up mechanisms for this purpose. Today, we are living in a complex, chaotic world, and we will need to struggle to stop it from “going critical”.
The challenge we face is how best to avoid collapse in these circumstances. In this context, the writings of Dmitry Orlov in his 2008 book Reinventing Collapse — The Soviet Experience and American Prospects may be very insightful. If we can learn from the Soviet Union’s experience of collapse, might it be possible to somehow mitigate the worst impacts caused by the peaking of global oil production?
Orlav shares with us what he calls five stages of collapse. The first is financial collapse and many of us experienced this directly in 2008 such that we began to lose faith in “business as usual”. The second is commercial collapse, where we lose faith in ability of markets to provide for all our needs and this was perhaps experienced in parts of Portugal, Italy, Greece and Spain — the PIGS — from 2009 onwards.
The third stage is political collapse where faith in the government taking care of you is lost. Today this can be found in the many failed states around the world but mainly in Africa including Somalia, the Democratic Republic of the Congo and South Sudan.
The next stage is social collapse where you no longer believe that “your people” will take care of you and the sense of community is lost. The final stage is cultural collapse where you lose faith in the goodness of humanity. At that point, what we think of as civilized life has all but disappeared.
Ensuring a peaceful future
While most of us appreciate that we will face some pretty major problems going forward from here, it is also true that nobody can know for sure how things will play out. But is it inevitable that things will get worse?
Professor Steven Pinker in his 2012 book, The Better Angels of Our Nature, argues convincingly that we are living in the most peaceful times in human history. He describes the very powerful forces explaining why this is the case.
These are, first of all, the rise of the nation state and judiciary that work to reduce the individual need/temptation to use violence to resolve disputes. Second, the role of commerce and particularly the way that the exchange of goods and services interconnect people so that we care about “others”. Third, there is the feminization of the world with increased respect paid for the interests and values of women.
Fourth, there is the role of cosmopolitanism and the rise of literacy, mobility and mass media. Fifth, there is something described as the “escalator of reason”, which is the application of knowledge and rationality in human affairs forcing people to recognize the futility of violence and war as a means to solve our problems.
In his engaging 2013 lecture at the University of Edinburgh where Pinker explained his ideas in detail, he was asked by a member of the audience whether we might solve the resource/climate challenges through global cooperation, or whether violence, chaos and anarchy would result, as in the past.
He responded thoughtfully by saying “maybe (we would face violence, chaos and anarchy) but not necessarily”. The research seems to show big wars in the past have not been fought primarily over resources, but more as a result of other factors — fear, revenge and ideology.
So how can resource related wars be avoided? The answer is to invest in what works and that is clearly the five forces that have made the world more peaceful.
Now there will be those who argue that nation states have pursued violent paths in the past, that the judiciary can be corrupt, that commerce can lead to exploitation, that women leaders can be as warlike as men, or that the media can distort the truth. But it is essential to focus on the overall direction of change which has been positive, even when in some cases we have witnessed significant problems along this road.
We have to continue to invest in what works because that will increase our ability to adapt socio-economically. This is an important contribution to the energy transition debate that tends to be focused on either technological solutions or community-based responses. The basic line of thinking is that our overriding objective has to be to continue to ensure that we maintain peace and social progress. We have to focus on what makes the world a better place and in what has been historically proven to make the world more peaceful and less violent. This is naive, idealistic and simplistic I suppose, but what is the alternative?