[Marxism] Mark Jones on Peak Oil

[Jon Flanders <jonathan.flanders@xxxxxxxxxxx>]

".........What form will this catastrophe take and what kind of
working-class politics is appropriate to meet it?

If the economists suffer from over-optimism, the geologists also are not
clear about the historical implications of the global Hubbert-peak. How
does capitalism react and adapt to energy shortage and growing entropy?

This is first of all and above all, an accumulation crisis, not a
resource crisis. The oil will never run out, and most of even known,
easily-accessible conventional oil reserves will probably stay
underground forever and never be pumped. As for non-conventional
resources like tar-sands–let alone hydrogen–they will remain mere
fantasy. In the wake of a severe slow-down, neither capital–nor,
crucially, effective demand– will exist capable of bringing the
alternatives onstream. World capitalism can slip into a post-crash
equilibrium state which can endure for decades or longer, amid
unprecedented social stress and immiseration. To say this is
not (obviously) to seek it or to welcome it; but only by resolutely
analysing historical processes, and not by hiding from them, can we hope
to positively influence outcomes.

It may seem odd to argue on the one hand that fossil fuels are running
out but on the other that even known, easily-accessible reserves may
never be used. But there are plenty of examples of this happening in
history. The age of coal and steam ended with most of the coal still
underground. More to the point, economies can collapse because of an
energy-famine even though there is still plenty of reserve left. That
happened in the USSR.

The USSR was a very energy-intensive economy. The main reason for its
collapse was not because it was bankrupted by Reagan’s Star Wars, or
because “planning doesn’t work” or even because of Gorbachev’s treason.
These were factors, but the main underlying reason was the failure of
the Soviet energy system.

But there is still plenty of oil left in the former Soviet Union. In
fact fSU reserves-to-production ratios have consistently risen for the
past 15 years. Russian reserves are higher now than in Soviet times.
Isn’t availability of reserves all that matters? Economists constantly
repeat the mantra that ‘world reserves are rising’ when they seek to
refute the known facts that world oil production is at or near its
Hubbert-peak.

But this kind of information, which the panglossians depend on, is
highly misleading. What went wrong in the USSR is a paradigm example of
just how misleading the argument about reserves can be: and how crises
can bite with unexpected and devastating suddenness.

Soviet oil production peaked in 1987 and swiftly (within 5 years) fell
by half. This brought about the complete collapse not only of the Soviet
energy industry, but the whole Soviet economy. 15 years later, there are
few real signs of economic revival. Without the kind of effective demand
which the Soviet economy provided, and without the kind of social and
technical infrastructure and political stability which the Soviet
economy also provided, there is no material basis to recreate such a
colossal oil industry in the fSU. Therefore, the fSU is unlikely to ever
be more than a raw materials and above all, energy-supply appendage of
the capitalist world-system.

What happened to the Soviet oil industry exactly mirrors what is
happening in the West today: in the face of faltering supplies, the
energy supply system is being pressured to the maximum. Exactly as N Sea
and Mexican production is just now being forced to its technical limits,
so big Soviet resources such as Samotlor were intensively exploited
until production collapsed almost overnight. The result was an immediate
technical crisis of production from which the Soviet oil industry never
recovered. Worse, it brought down the whole economy in its wake. The
crisis in oil production triggered positive feedbacks in the wider
economy which produced an uncontrollable, runaway collapse. What had
been a stable economy running in equilibrium entered a period of chaotic
turbulence before flipping into a quite different steady-state. *The
same thing is happening now in the Western oil industry*. Exactly as in
the West, oil and gas was internally priced so low that it was
impossible to recapitalise the industry. North Sea oil (its huge
infrastructure having been financially and energetically
amortized many years ago) was producing at maximum capacity even when
oil prices fell to $10/bbl in the late 1990s. Now, a savage depletion in
UK North Sea production has set in. Prices are temporarily higher, but
fear of a new slump is a deterrent to new investment in what is anyway a
declining reserve.....


........Since 1973, US imperialism has successfully externalised the
overheads of this chronic crisis, and the result has been the growth in
mass immiseration, both relatively and absolutely, of the working class
and its social allies in peripheral and semi-peripheral states. There is
a limit to how far this process can continue; whole regions have already
slid off the economic map, and the destabilising effects of the huge
deflationary wave which followed the energy shocks of the 1970s continue
to produce devastating aftershocks in Africa, South Asia, Eastern Europe
and elsewhere. While the policy of making the poor pay (socialism for
the rich, neoliberal globalisation for the poor) will continue and even
intensify, the huge and fundamental imbalances in the social geography,
economy and class structure of the USA also continue to intensify
without limit. Capitalism defeated the working class, and was able
therefore to grow without any social limits. The political problem we
have is to try to make people understand, not what *might* happen, but
what is already actually happening: at the still largely
invisible, stealthy but irreversible processes of decay which make a
historical step-change inevitable. The question is, what kind of
step-change? Do we permit the imperialist ruling classes to drive us
over the abyss of war? It was never as materially true as today, that
the alternative is either socialism or barbarism.

Mark Jones
"

from: http://stangoff.com/?p=99





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