Oil Wealth and Political Poverty: Rethinking the History of Energy

Carbon Democracy TPBy Timothy Mitchell, author of Carbon Democracy (Verso, June 2013).

In the eighteen months since the publication of the first edition of this book, the United States appears to have entered a new age of energy abundance.  The extraction of gas and oil from shale formations has led to the most rapid increase in new energy supplies in the country’s history. Political leaders and the news media present this sudden reversing of a thirty-five-year decline in the US production of fossil fuels as a sign of the recovery of the country’s national independence. After the breakdown of financial institutions in 2008 – which erased trillions of dollars in wealth as stock markets, pension funds and property values crashed, and led to the loss of 7 million US jobs in the recession that followed – the energy boom also seemed to promise a return of real wealth. The fragile paper economy of financial speculation and consumer credit would give way to a ‘potential re-industrialization of the US’, built on the solid foundation of expanding material resources.

To others the bonanza threatened not a newfound independence but a deepening dependency. The new shale gas and oil would reinforce a long-term reliance on fossil fuels, which were becoming increasingly costly to produce. Historic levels of drought, the melting of the Arctic sea ice, heat waves and flooding, and the increasing frequency of other extreme weather events reminded many people of a further calculus of dependence. Three numbers shape this calculus: two degrees Celsius – the target accepted in the 2009 Copenhagen Climate Accord as the mean global temperature rise below which the most dangerous effects of anthropogenic climate change might be avoided; 886 gigatons – the quantity of carbon dioxide humankind can place in the atmosphere between the year 2000 and mid-century and still have some chance of keeping below the two-degree target, a budget of which more than one third was used up in the first decade of the century, leaving just 565 gigatons to spend by 2050; and 2,795 gigatons – the carbon potential of the proven coal, oil and gas reserves owned by the world’s private and public companies and governments. This last figure is five times the size of the remaining carbon budget. Energy firms, which dominate the lists of the world’s largest corporations, suffer from a deepening dependency. They depend upon counting as a financial asset a reserve of fossil fuels of which four-fifths must stay buried and uncounted in the ground if we are serious about keeping the planet habitable.

Carbon democracy involves understanding and working upon relations of dependence, and the vulnerabilities to which they give rise. Here we will explore the dependence of credit systems on energy futures. What kind of democratic politics might take account of this?

Timothy Mitchell teaches at Columbia University. His books include Colonising Egypt, Rule of Experts, and Carbon Democracy.

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