Revised from Empty Plates Tomorrow

Oil and gas flashpoints

Natural gas: Russia has nearly twice as much natural gas as any other country – 1,680 trillion cubic feet in 2004, according to the US Energy Information Administration. Iran came next with some 940 trillion cubic feet of natural gas reserves, followed by Qatar (910 trillion), Saudi Arabia (235 trillion), United Arab Emirates (212 trillion) and the United States (189 trillion). Nigeria, Algeria, Venezuela and Iraq completed the top ten natural gas nations. Six of the ten nations with the largest gas reserves are largely or overwhelmingly Muslim countries.  Of the remaining four,  Nigeria is split (often with animosity) between Muslim and Christian beliefs, while Russia, Venezuela and the USA are predominantly Christian, at least in cultural heritage. Religious differences between producing and consuming nations may well intensify the political and economic conflicts over energy resources that are likely to grow as reserves shrink. At consumption rates of around 100 trillion cubic feet of natural gas annually, the world has enough for about 60 years.

Oil: Saudi Arabia has long claimed the world’s largest reserves of oil, which in 2004 were about 262 billion barrels. Some analysts question the accuracy of Saudi Arabian oil reserve estimates, which are probably lower than  claimed. Clues suggesting depletion include the injection of water into oilfields to flush remaining oil into the wells; a rise in output of heavy crude at the expense of more valuable light oil; and a scarcity of new wells to replace those that are pumped out. The data on which reserve estimates are based are not open to international scrutiny because the state-owned oil company, Saudi Aramco, has a monopoly on oil extraction and chooses which information to reveal, and which to conceal. Saudi Arabia is in many ways a client state of the USA, which sponsors the  ruling al-Saud family.

The list of nations with the largest oil reserves is similar to the gas list, because the two energy sources are generally found in close proximity. After Saudi Arabia, the oil reserve leaders are Canada, reported to have almost 179 billion barrels in 2004, mainly in oil sands; Iran, possibly about 126 billion barrels; Iraq, 115 billion; Kuwait, 101 billion stated in 2004 but in reality probably much less; United Arab Emirates, 98 billion; Venezuela, 77 billion; Russia, 60 billion; Libya, 39 billion; and Nigeria, 35 billion.

Table: States with the greatest oil and gas reserves, 2004

Source: Energy Information Administration, US federal government, January 2005.

Five miles below the sea bed in the Gulf of Mexico, American and UK oil companies located, after a prolonged period of expensive exploration and test drilling, a new oilfield that could hold between three billion and 15 billion barrels. Yet even if it became technically feasible to extract the lot, it would amount only to between five and 25 weeks of world oil consumption.  It would not even make up the probable gap, over 50 billion barrels, between Kuwait’s published reserves of 101 billion barrels at the end of 2004, and the much smaller quantities that may still be underground. Petroleum Intelligence Weekly reported on January 20^th 2006 that the Kuwait Oil Company reckoned, privately, on reserves of just 48 billion barrels – and only some 24 billion barrels of this much smaller quantity were fully proven.

The world’s fairly easily extractable oil reserves would be enough to last maybe 40 years from 2010, if annual consumption did not exceed the 2009 level of just over 31 billion barrels. If there  still remained easily extractable reserves of oil, companies would not be drilling thousands of feet below the sea bed, as Chevron is doing 140 miles out from land in the Gulf of Mexico, drilling to 19,000 feet under the bottom of the ocean, in a venture costing nearly a million dollars a day.

Democracy? Not for client states

The trouble with democracy is that voters can elect leaders whose priorities collide with those of the world’s most powerful governments and corporations.   Thus the USA, supported by the UK, protects the al-Saud dynasty in Saudi Arabia, but opposes the elected Islamic religious government in Iran. In Saudi Arabia the al-Saud family has absolute power and selects all the leading ministers. There is no ‘democracy’ in the western sense, but the steady flow of energy to the rich world persuades western governments, by and large, to keep quiet about it.

The oil state of Kuwait does have elections (men aged 21+, who can trace Kuwaiti ancestry back to 1920 or earlier, can vote), but the administration is controlled by the al-Sabah family. United Arab Emirates is a federation of seven states (Abu Dhabi, Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah and Umm-al-Qaiwain). Each state is ruled by an emir who selects a supreme council. Qatar is also an emirate, where the emir and several ministers belong to the al-Thani family. The West regards all these as friendly states.

In Algeria, where poverty and violence are endemic,  western oil companies dominate energy supplies and western money props up the secular régime. Socialist Libya, materially  a more equal society than its neighbour Algeria, was on the USA’s blacklist for 27 years until May 2006, when the then-Secretary of State Condoleezza Rice announced the resumption of diplomatic relations. Oil companies had been lobbying Congress to remove Libya from the ‘evil’ list (although the administration maintained that energy supplies had nothing at all to do with the decision). The West’s long opposition to Libya had more to do with distaste for the ‘Revolutionary Leader’, Colonel Muammar Abu Minyar al-Qadhafi, and with his alleged financial support for international terrorism, than with concern for the population’s political rights.

The oil and gas wealth of Nigeria is enriching energy company directors and shareholders, but has intensified corruption in this desperately poor and increasingly polluted country, torn by civil wars and Christian-Muslim religious divisions. The West takes Nigeria’s oil: over 40 per cent of it goes to the USA. Oil wealth has not trickled down to local people, but just the opposite: pollution and land expropriation destroy their livelihoods. The Nigerian national constitution of 1999 says that 13 per cent of national oil revenues should be distributed to the regional states, but even if the money ever reached the states, it was rarely used for sustainable development purposes. The Nigerian Supreme Court ruled in 2002 that this constitutional right applied only to revenues from oil wells on land – thus leaving Nigeria’s growing off-shore oil industry out of the equation. The regional states demanded a higher share of on-shore revenues to compensate, but the federal government refused to meet their demands. So oil pipelines in Nigeria suffer frequent attacks by the government’s political opponents, who draw willing support from impoverished communities.

Russian and Canadian powerstores

Russia, after the break-up of the Soviet Union, was a beleaguered state. Billions of dollars in oil, gas and other raw material sales drained out of the country to foreign companies and to the oligarchs who acquired, with the apparent approval of the then-president Boris Yeltsin, national assets at knock-down prices. Vladimir Putin, president of Russia from December 31st 1999 to May 7th 2008 and subsequently prime minister,  re-established state control, but in the teeth of intense criticism from several western governments, and from western and Russian corporations.  The oligarchs moved abroad – London is a popular haven – and spent freely on mansions, yachts and football.

The oil and gas regions of Russia are in western and northern Siberia including the Arctic shelf, the Volga-Ural region, and the North Caucasus, and many are close to ethnic and religious flashpoints. In the far north, energy extraction has to contend with extremely cold, hostile climates. The Russian state-controlled oil and gas company Gazprom, in an acrimonious price dispute with Ukraine, chose New Year 2006 to shut off gas supplies to its neighbour. The Ukraine merely siphoned off Russian gas in transit by pipeline to Western Europe, provoking a chill of alarm from Romania to Germany. Gazprom’s aggressive action would scarcely have been contemplated without full support from Putin. Energy reserves give Russia renewed global power.

Handily in the USA’s back yard and traditionally a friend, Canada sits on 179 billion barrels or so of oil in the tar sands of Alberta and Saskatchewan. Extraction of crude oil from tar is energy-intensive, however, and requires huge quantities of water.  The consortium Syncrude Canada Ltd is a leading force in the extraction of oil from tar sands, harnessing the resources of several oil companies including ConocoPhillips, Imperial, Mocal and Murphy.  As a location  for extraction Canada has advantages of relative political stability and wealth equality, but the tar sand workings are environmentally destructive and yield little energy gain.

Who knows? The truth about ‘known’ resources is hazy and hidden in hubris.

The redundant steel worker wore a black armband. He was 58, he said, and would never find another job. He was one of 1,600 in Redcar, on Teesside in North East England, whose jobs have been axed by Corus, which since 2006 has been owned by the Tata Steel group of India. On Thursday evening this week I watched ‘Question Time’ on BBC TV, coming from Teesside, and felt that an impotent anger afflicted the audience. Teesside makes high quality steel, but the Redcar plant does not fit into Tata’s strategic plan.

The steel industry has been globalised. Who are the winners? The owners of Chinese factories making metal goods for sale around the world? The directors of the most aggressively profit-seeking steel companies? The bankers who lend them money? I cannot think of many other ‘winners’, but there are millions of losers. Just on Teesside, 1,600 lost jobs mean at least 2,250 or so more people affected in the immediate families of the redundant workers, on the basis of the national average 2.4 people in a household. So we have about 3,850 people directly affected. Then there are the enterprises that depended on the steel plant for their livelihoods. A typical multiplier in manufacturing is 2.35 or so. That would mean 3,760 consequential job losers, in turn affecting about 5,265 more people in their households,  an additional total of 9,025 persons experiencing the repercussions of the plant closure.

So the end of steel manufacture at plant employing 1,600 may well result in the economic impact of worklessness affecting, in a short time, the lives of 12,875 people.

We are told that our future as a nation depends on us offering a highly skilled workforce to the world. We are successful in weapons manufacture, but that is because  security and defence are the only industrial sectors exempt from the free trade — no quotas, no tariffs — mandated by the World Trade Organisation. It’s no surprise that the defence company BAE Systems is the UK’s largest manufacturing company, because BAE and similar defence (weapons) companies are exempt from the open competition rules.  This means that our economy, and jobs, become over-dependent on the arms business.

We have been conditioned to accept global free trade as both desirable and inevitable, but it is neither. It has proved to be an excellent method for transferring resources from the majority to a tiny minority of global super-rich. As a supposed democracy, we have the capacity to challenge the ‘common sense’ that unfettered free trade benefits peoples and nations. That ‘common sense’ was carefully constructed, and can be deconstructed given sufficient effort and will. A first step may be to elect politicians who will scale back the World Trade Organisation, to allow nations more control over their own economies.

The major political parties in the UK still accept subordination to the WTO, and thus acquiesce in the diminution of democracy that makes us into victims rather than active citizens. The steelworkers in Redcar understand only too well what it feels like to be economic victims, in a system that does not give them a voice.

What MPs’ expenses may reveal about our society

David Marquand’s ‘Decline of the Public: the hollowing out of citizenship’ (Polity Press, 2004) and Michael Power’s ‘The Audit Society: rituals of verification’ (Oxford University Press, 1997) both made a big impression on me. ‘Decline of the Public’ explains how the marketisation of society has turned citizens into consumers, or buyers and sellers, with few opportunities to behave as citizens, to make decisions on social and political priorities, to be involved in governance. Instead, as ‘The Audit Society’ details, there are endless tick lists that purport to prove that everything in the national garden is weed-free and sweet-smelling. Often the lists get in the way of constructive activities, and prove no more than that there is a system for recording x, y, z and everything else under the sun. The BBC Radio 4 readings this last week (June 15 to 19) of Woman Police Constable E E Bloggs’ ‘Diary of an On-Call Girl’ (Monday Books, 2007) were funny yet at the same time depressing because police work appears weighed down with lists and tick boxes. WPC Bloggs (see http://pcbloggs.blogspot.com) is supposed to make eight arrests a month, her ‘target’. She resists, but does no favours to her career prospects. To meet the target, officers have to focus on easy cases, rather than delving into difficult but socially important areas. WPC Bloggs spends hours at her computer, on reports and ticks. The inadvertent missed tick brings questioning emails from the officer/s who spend hours checking through reports and lists.

Audit trails are evidence when aggrieved persons go to law, often with the help of a ‘no win no fee’ solicitor, or when the fees are claimed from the counter-party’s insurance company. Litigation for malpractice is very big business. This means people are terrified of making any mistake, hence the tick, tick, tick, lists to demonstrate that everything was done by the book. Fear of prosecution for simple mistakes makes us risk-averse and unwilling to innovate. It enmeshes us tightly in nets of the proverbial red tape.

When we are not allowed to make mistakes, we cannot learn from them. Learning is essential to development. Learning is essential to any real citizenship. “Well,” you may say, “I’ve learnt a lot about members of Parliament from reading their expenses claims in the ‘Daily Telegraph’.” True. What were the expense claims really about? Easy money, no questions asked? Exploiting legal loopholes, such as calling your second home your main home for a few weeks, so you can sell it and avoid 40% capital gains tax? Keeping up appearances with mansions, moats, and phantom mortgages, so that MPs do not appear the poor country cousins of bank bosses, professional footballers and Russian oligarchs? Do we measure personal worth by the number of black noughts on bank balances? Apparently yes, but this is a consequence of the marketisation of society, to paraphrase Professor Michael Sandel in the first of this year’s Reith Lectures.

Thinking about it, are we just following the negative trend by criticising MPs for taking advantage of citizen taxpayers? Perhaps we should consider the intention behind actions that result in ‘mistakes’. Creating a system that enriches yourself is not particularly moral, but morals are intangible and thus incomprehensible to markets, which have to place exchange values on everything. MPs have been working the market, no more. Our challenge is to relegate the market to a subsidiary role and to elevate social equity and justice above the market place. To achieve such a transformation, we have to be able to make mistakes, to use audits as aids to understanding rather than them controlling us, and to open up politics as collaborative and co-operative arenas, not as party fiefdoms. Maybe the MPs’ expenses scandal is a marker on the uphill climb towards the end of traditional party politics and its replacement with new forms of governance that citizens will try out, refine, adopt and keep refining, in the light of changing contexts and new challenges.

New Economics
Llandeilo is a small town in the Tywi valley, Carmarthenshire, Wales. The ‘Transition Town’ movement aims to prepare communities for a future in which fossil fuel use will be drastically reduced, and as one consequence, far more production will be for local consumption.

Transition Town Llandeilo has a New Economics group, led by Gerry Gold and to which I belong. We have discussions that often centre on the failure of capitalism, but I get the feeling that several of us are not at all sure what should replace it. There are enthusiastic views in favour of Marxism, co-operatives and commonwealths. Maybe we should start with the possibilities contained in our environment and people, and work out from those beginnings, rather than deciding on a structure and adapting to it? Already, keen gardeners have persuaded the National Trust to release land at Dinefwr Park for allotments: perhaps we just need more useful projects like this?

I wonder, though, if it’s possible for one project to lead to another, and another, until the local economy is ‘sustainable’ in terms of resource use, without an infrastructure for the transfer of permissions, funds, and expertise. Transition Town Llandeilo doesn’t have a deep pocket, and is not an agency of government. The lack of funds and power is a barrier to getting things done. Yet is ‘getting things done’ the way forward? Perhaps we should be an enabling group, with visions of many ways forward. Can there be one infrastructure capable of allowing ‘many ways forward’, or are we talking about multiple-choice infrastructures?

The thought of multiple infrastructures worries me, as they could create as much trouble as a whole school of octopuses suffocating an unlucky diver with dozens of their tentacles. Without a system for bridging the wide gap between conventional and New Economics, though, the new ways are likely to remain marginalised.

New Economics are about a lot more than just money and production. They are about creating economic systems that the Earth can sustain far into the future, systems that are flexible enough to cope with climate change and democratic enough to prevent corporations from determining the fate of societies. A counsel of unattainable perfection, perhaps, but we need to try because the alternative is to devour everything and then to fester in our own waste. Current economic policies encourage growth as the way to prosperity, but Earth is a finite system, in which perpetual growth is impossible. This common sense was reinforced in 1972 by Donella H Meadows, Dennis L Meadows, Jorgen Randers and William W Behrens III, the authors of the classic The Limits to Growth.

I’m sure we need a New Economics infrastructure, one that can plug in to national and local government to source permissions. The quantities of permissions and prohibitions that tower over our lives restrict innovation to an alarming extent. If you want to start a small farm and woodland, perhaps on a permaculture model, acquiring the land is just step one on a long, long journey. Planning law is suburban in outlook, liking to keep homes and work as far apart as possible. Development agencies would rather talk to one multinational than to lots of individuals. Planners often regard the countryside as a mega-park, not as the source of our continued survival. One obvious way forward is for proponents of New Economics to stand for election to councils and to Parliament… worthwhile but, on its own, too slow.

John Christopher’s 1956 novel The Death of Grass has just been reissued, by Penguin. In the book, the Chung-Li virus has destroyed grasses – including cereal crops – around the world. Government, and the infrastructure that government manages, break down. Starving people take the law into their own gun-toting hands, and being quick on the draw is the difference between dying, and existing a little bit longer. Christopher makes a plausible case for the end of infrastructure marking the end of civilisation. Maybe what we need is a New Economics infrastructure which can link into government as we know it, but which can also function independently as networks of local cells. Perhaps I should say ‘groups’, in case ‘cells’ comes over as subversive. (All the surveillance that goes on these days is really hampering debate, as to avoid trouble there is a big temptation to speak in platitudes.)

So far there’s no sign of Chung-Li in Llandeilo, but I don’t think we should wait much longer before building a New Economics infrastructure. Several areas in the UK are a long way further down the road. Stroud in Gloucestershire, for one, and Totnes in Devon, where Transition Town pioneer Rob Hopkins is a leading light. There are over 150 Transition Towns around the world, the majority in the UK but also in ten other countries including the USA, Australia, New Zealand and Germany. The transition concept gives communities a way of alerting themselves to the coming challenges of peak oil and to climate change. And come they will.

More Fraternité, urges Jacques

Jacques Monin, London correspondent for Radio France, has just published a book called Le naufrage britannique (The British Shipwreck). I’ve read the first two chapters, ‘L’argent roi’ (‘King Money’) and ‘La fin du rêve’ (‘The End of the Dream’) and am impressed by M. Monin’s analysis of the UK’s civic weaknesses. He covers similar ground to David Marquand in Decline of the Public, a book which castigates the retreat of civic values and of opportunities for debate and engagement, in the face of aggressive private enterprise and commercial values.

M. Monin has been startled by the extent of political apathy in the UK, and makes the point that the rare instances of labour unrest in recent years have had money at their heart – individuals fearing insufficient income or excessive costs. Ideas, or concepts of right and wrong, have largely ceased to concern the populace. He concedes that there was a wave of public opposition to the Iraq War back in 2003, but uses this as an example of the rarity of mass dissent on a political issue. The ascent of money as all that really matters has, he suggests, impoverished public debate because Britons have come to accept the hegemony of economics as natural, as common sense, impossible to question because they do not realise that it can be questioned.

Acceptance of a single dogma is, in a constantly changing natural and social world, a recipe for disastrous rigidity. Furthermore, a dogma that privileges the economy above every other consideration relegates all that makes us human to the periphery of existence.

The cold dawn of 2009, heralding financial hardship and a fall in our collective standard of living, reveals the nation state as very much the junior partner in global business, existing to provide business with workers to be paid as little as possible, and with consumers to buy goods and services for as much as possible. There is a fundamental contradiction here, of course, but one masked by government as income redistributor, through taxation and the use of measures such as tax credits to supplement individuals’ incomes.

Belatedly, it is becoming apparent that globalisation is a merciless master. Surely the nation state can seize back the intellectual initiative, to start to create a society in which citizens control economies, not the other way round. Have we become too apathetic to politics to start to devise new ways forward?

If you can understand French, do read the book. Le naufrage britannique, ISBN 978-2-7103-3104-9, is published by La Table Ronde in Paris and costs €20.