keeping with the questions of possibilies (see the previous post), George Caffentiz pubished the following essay in turbulence on the implications of shifting towards a ‘green energy’ economy.

he notes that the last time there was a major shift in energy production in the US it was during Roosevelt’s presidency, but it was neither simple nor benign.  the shift towards natural gas and oil was a move to break the minor’s union, a powerful force in the CIO.  this was a defeat of working class power, and marked the accelerated development of state capitalism.

in my head the ability to shift away from an oil energy economy will depend broadly on two interrelated things: 1) conflicts over the control of oil resources between the US, Latin America (with Venezuela in the lead), and Iran along with the rest of the Middle East; and 2) the current crisis of capitalism in general, and neoliberalism in particular.  the latter is important because it governs in part the interstate and inter-imperial rivalries listed in point number one.

how will the political and economic relationship change?  what obstacles will come up preventing any smooth transition between ruling classes?  if disciplining the minors’ union in the 1930s & 40s is any indication of what is to come, what does this mean for the shifting power relationship between the rulers on the one hand, and the working class and other forces from below on the other?

but i’ll stop here and let Caffentiz take it away…

‘Everything Must Change So That Everything Can Remain the Same’: Notes on Obama’s Energy Plan

The Bush administration’s energy policy, with its evasions and invasions, has led to poverty, war and environmental destruction. But will Obama’s policy really be substantially different? Will this be change we can believe in? Turbulence asked George Caffentiz, a seasoned analyst of energy politics, to investigate.

Is President Obama’s oil/energy policy going to be different from the Bush Administration’s? My immediate answer to this question will be a firm No, followed by a more hesitant Yes. The reason for this ambivalence is simple: the failure of the Bush Administration to radically change the oil industry in its neoliberal image has made a transition from an oil-based energy regime inevitable, and the Obama Administration is responding to this inevitability. We are, consequently, in the midst of an epochal shift and so must revise our assessments of the political forces and debates of the past with some circumspection.

Before I examine both sides of this answer, we should be clear as to the two sets of oil/energy policies being discussed.

The Bush policy paradigm’s premise is all too familiar: the ‘real’ energy crisis has nothing to do with the natural limits on energy resources, but it is due to the constraints on energy production imposed by government regulation and the OPEC cartel. First, energy production must be liberalised and the corrupt, dictatorial and terrorist-friendly OPEC cartel dissolved by US-backed coups (Venezuela) and invasions (Iraq and Iran). Then, according to the Bush folk, the free market can finally impose realistic prices on the energy commodities (which ought to be about half of the present ones). This in turn will stimulate the production of adequate supplies and a new round of spectacular growth of profits and wages.

Obama’s oil/energy policy, during the campaign and after his election, has an equally familiar premise. As he presented on January 27, 2009, ‘I will reverse our dependence on foreign oil while building a new energy economy that will create millions of jobs… America’s dependence on oil is one of the most serious threats that our nation has faced. It bankrolls dictators, pays for nuclear proliferation and funds both sides of our struggle against terrorism.’ In the long-term, this policy includes: a ‘clean tech’ Venture Capital Plan; Cap and Trade; Clean Coal Technology development; stricter automobile gas-mileage standards; and cautious support for nuclear power electricity generation.

The energy policy he outlined in his budget proposal is supportive of a peculiar ‘national security’ autarky. (This emphasis on self-sufficiency is all the more peculiar when it comes from an almost mythically pro-globalisation figure like Obama.) Its logic is implicitly something like this: if the US were not so dependent on foreign oil, there would be less need for US troops to be sent to foreign territories to defend the US’ access to energy resources. Obama treats oil in a mercantile way, as the vital stuff of any contemporary economy, similar to the way gold was conceptualised in the 16th and 17th centuries. Yet mercantilism has long been definitively abandoned as a viable political economy. In effect, he is calling for an autarkic import-substitution policy for oil while he is leading the main force for anti-autarkic globalisation throughout the planet.

A firm No

In Obama’s paradigm the key question for oil policy is US dependency on foreign resources. Such a prism obscures the consequence of the present system of commodity production. A failure to start from the simple fact that oil is a basic commodity and the oil industry is devoted to making profits leads to two significant misrecognitions. Firstly, the US government is essentially involved in guaranteeing the functioning of the world market and the profitability of the oil industry and not access to the hydrocarbon stuff itself. Secondly, energy politics involves classes in conflict and not only competing corporations and conflicting nation states.

In brief, it leaves out the central players of contemporary life: workers, their demands and struggles. Somehow, when it comes to writing the history of petroleum, capitalism, the working class, and class conflict are frequently forgotten in a way that never happens with oil’s earthy hydrocarbon cousin, coal. Once we put profitability and working class struggle into the oil story, the plausibility of the National Security paradigm lessens, since the US military would be called upon to defend the profitability of international oil companies against the demands of workers around the world, even if the US did not import one drop of oil.

US troops will have to fight wars aplenty in the years to come, if the US government tries to continue to play – for the oil industry in particular and for capitalism in general – the 21st century equivalent of the 19th century British Empire. For what started out in the 19th century as a tragedy, will be repeated in the 21st, not as farce, but as catastrophe. At the same time, it is not possible for the US government to ‘retreat’ from its role, without jeopardising the capitalist project itself. As his efforts in Afghanistan, Iraq and Pakistan initially indicate, Obama and his Administration show no interest in leading an effort to abandon this imperialist, market-policing role.

Thus Obama, along with the other supporters of the National Security paradigm for oil policy, are offering up a questionable connection between energy import-substitution and the path of imperialism. As logicians would say, energy dependence might be a sufficient condition of imperialist oil politics, but it is not a necessary one. This is Obama’s dilemma then: he cannot reject the central role of the US in the control of the world market’s basic commodity; whilst at the same time, inter- and intra-class conflict in the oil producing countries is making the US’s hegemonic role impossible to sustain. Therefore, as is implied in his approval of a troop ‘surge’ in Afghanistan and the hunkering down of the US military in huge bases outside of Iraqi cities, Obama’s oil policy will be quite similar to Bush’s.

A hesitant Yes

Up until now my argument has been purely negative, i.e., though Obama’s oil policy and Bush’s are radically different rhetorically, they will have much in common in practice. Obama’s goal of ‘energy independence’ will not affect the military interventions generated by the efforts to control oil production and accumulate oil profits throughout the world. These interventions will intensify as the capitalist crisis matures and as the short-term, spot market price fluctuates wildly from the long-term price, and geological, political and economic factors create an almost apocalyptic social tension.

I do, however, see a major difference between Bush and Obama. The former was a status quo petroleum president, while the latter is an energy-transition president. In other words, Obama is in charge of a capitalist energy transition. It is similar to the successful one that, under Roosevelt, substituted oil and natural gas for coal in many places throughout the productive system in the 1930s and 1940s, and the unsuccessful one, under Carter, that failed to (re-)substitute coal, solar and nuclear power for oil and gas in the US of the 1970s.

Eighty years ago, capital began to realise that coal miners were so well organised that they could threaten the whole machine of accumulation. This was an experience felt in the British General Strike of 1926 and the coal mining struggle in the US of the 1930s that led to the formation of the Congress of Industrial Organizations (CIO). Miners had to be put on the defensive by the launching of a new energy foundation to capitalist production. Then, forty years on, President Carter despaired of putting the struggle of the oil-producing proletariat (especially in Iran) back in the bottle.

In the face of the failure of the Bush Administration’s attempt to impose a neoliberal regime on the oil producing countries, the Obama Administration must now lead a partial exit from the oil industry. It will not be total, of course. After all, the transition from coal to oil was far from total and, if anything, there is now more coal mined than ever before. Likewise, the transition from renewable energy (wind, water, forests) in the late 18th century to coal was also far from total. Indeed, this is not the first time that capitalist crisis coincides with energy transition, as a glance at the previous transitions in the 1930s and 1970s indicate. It will be useful to reflect on these former transitions to assess the differences between Bush’s and Obama’s oil policies. The different phases of the transition from oil to alternative sources include:

(1) repressing the expectations of the oil producing working class for reparations for a century of expropriation;

(2) supporting financially, legally and/or militarily the alternative energy ‘winners’;

(3) verifying the compatibility of the energy provided with the productive system; and

(4) blocking any revolutionary, anti-capitalist turn in the transition.

These phases offer the kind of challenges that were largely irrelevant to the Bush Administration, since it was resolutely fighting the very premise of a transition: the power of the inter- and intra-class forces that were undermining the neoliberal regime. Consequently, they will provide a rich soil for discussion, debate and planning in this period.

The title of this piece applies to the ‘Firm No’ side of my argument in a quite simple sense: the interests of the world market and the oil/energy companies will be paramount in the deployment of US military power. It also applies to my ‘Hesitant Yes’ argument though this time less directly – for the ultimate purpose of the Obama administration is (pace Rush Limbaugh and Glenn Beck) to preserve the capitalist system in very perilous times. It just so happens, however, that the ‘everything’ that must change is more extensive than had ever been thought before.

In regards to the first phase of the transition, we should recognise that there will be inter-class resistance to it from those who stand to lose. Of course, most ‘oil capitalists’ will be able to transfer their capital easily to new areas of profitability, although they will be concerned about the value of the remaining oil ‘banked’ in the ground. This transition has been theorised, feared and prepared for by Third World (especially Saudi Arabian) capitalists ever since the first oil crisis of the 1970s. But what is to be done with respect to the oil producing workers? After all, the ‘down side’ of Hubbert’s Curve could, potentially, enable payback after a century of exploitation, forced displacements and enclosures in the oil regions.

Picture 54Hubbert’s Curve is a graphical representation of the peak oil thesis. It is based on the observation that the amount of oil under the ground is finite, and the rate of discovery of new deposits increases to a ‘peak’, and then decreases, as new places to extract oil become rarer. During this decline the remaining oil becomes more valuable and could, if oil workers were in a strong enough position, be used to increase wages and pay reparations to the communities that have suffered during its extraction. Any demands to ‘make hydrocarbon fuels history’ must take this potential into consideration.

The capitalist class as a whole is unwilling to pay reparations to the peoples in the oil-producing areas whose land and life has been so ill-used. Oil capital’s resistance to reparations is suggested by its horror, for example, at paying the Venezuelan state oil taxes and rents that will go into buying back land for campesinos whose parents or grandparents were expropriated decades ago. Capital wants to control the vast transfer of surplus value being envisioned in these discussions of transition, and without a neoliberal solution it is not clear that it can. Moreover, will the working class be a docile echo to capital’s concerns? Shouldn’t reparations be paid to the people of the Middle East, Indonesia, Mexico, Venezuela, Nigeria and countless other sites of petroleum extraction-based pollution? Will they simply stand still and watch their only hope for the return of stolen wealth snuffed out?

As far as the second phase of transition is concerned we should recognise that alternative energies have been given an angelic cast by decades of ‘alternativist’ rhetoric contrasting them with blood-soaked hydrocarbons and apocalypse-threatening nuclear power. But let’s remember that the last period when capitalism was operating under a renewable energy regime, from the 16th to the end of the 18th century, was hardly an era of international peace and love. The genocide of the indigenous Americans, the African slave trade and the enclosures of the European peasantry occurred with the use of ‘alternative’ renewable energy. The view that a non-hydrocarbon future operated under a capitalist form of production will be dramatically less antagonistic is questionable. We saw an example of this kind of conflict of interest in the protests of Mexican city dwellers over the price of corn grown by Iowa farmers that was being sold for biofuel instead of for ‘homofuel’ (fuel for Homo sapiens).

In terms of phase three, we should remember that every energy source is not equally capable of generating surplus value (the ultimate end-use of energy under capitalism). Oil is a highly flexible form of fuel that has a wide variety of chemical by-products and mixes with a certain type of worker. Solar, wind, water and tide energy will not immediately fit into the present productive apparatus to generate the same level of surplus value. The transition will ignite a tremendous struggle in the production and reproduction process, for inevitably workers will be expected to ‘fit into’ the productive apparatus whatever it is.

Finally, phase four presents the nub of the issue before us. Will this transition be organised on a capitalist basis or will the double crisis opened up on the levels of energy production and general social reproduction mark the beginning of another mode of production? Obama’s energy policy is premised on the first alternative; we’ve examined some of the unpleasant prospects that follow. The scale of what is at stake requires us to keep the second alternative open. When we investigate the possibilities before us we must endeavour, with all our energy and ardour, to break with the premise that leads to ‘everything remaining the same’.

George Caffentzis is a member of the Midnight Notes Collective and co-editor of Midnight Oil: Work Energy War 1973-1992 and Auroras of the Zapatistas: Local and Global Struggles in the Fourth World War.