It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Friday, July 29, 2022
Climate ‘leader’ Netflix donated to pro-pipeline, Koch-supported think tank
The Macdonald Laurier Institute then bragged about pushing a massive tar sands expansion.
Netflix gives every impression of being one of the world’s most climate friendly corporations.
The streaming company responsible for the blockbuster climate movie “Don’t Look Up” starring Leonardo DiCaprio and Jennifer Lawrence plans to slash or offset all of its corporate greenhouse gas emissions by the end of 2022, a goal known as net-zero.
Netflix is producing and providing a platform for documentaries, TV series, and feature films educating viewers about the climate crisis — about 160 million households globally watched one of these stories in 2020, according to the company.
“The film industry needs a leader when it comes to climate action,” Katharine Hayhoe, a chief scientist at the Nature Conservancy who belongs to an independent advisory group of experts for Netflix’s sustainability plan, has said. “I’m thrilled at how Netflix is taking on this leadership role.”
But away from the public eye there is one area where Netflix is anything but green.
The company has donated to a rightwing think tank in Canada that has also been supported financially by the Canadian Energy Pipeline Association, the Exxon-owned tar sands producer Imperial Oil, and the Charles G. Koch Foundation, an organization linked to Koch Industries.
Known as the Macdonald Laurier Institute, this Ottawa-based think tank boasts of having “great influence” in pushing forward a massive tar sands pipeline expansion called Trans Mountain. That project’s greenhouse gas emissions could far eclipse any carbon reductions that Netflix promises in its “net-zero” plan.
The Macdonald Laurier Institute is a relatively new think tank. Founded in 2010, its board of directors and advisors come from some of the top legal, lobbying and financial firms in Canada. It is also a member of the Atlas Network, a U.S.-based coalition whose hundreds of partners worldwide include the Cato Institute, a libertarian think tank co-founded by Charles Koch.
The Macdonald Laurier Institute has partnered with Atlas on a campaign to discourage the Canadian government from implementing laws that would give Indigenous communities greater power to push against oil and gas projects on their land.
Netflix is listed as a donor to the Macdonald Laurier Institute in the organization’s 2018 annual report, alongside Imperial Oil, the Atlas Network and several dozen other supporters. “We believe that with your help we will bring Canada closer to becoming the best governed country in the world,” the annual report says of donors like Netflix.
The Macdonald Laurier Institute, also known as MLI, didn’t respond to questions about the Netflix donation.
This might seem like an odd pairing, because Netflix by some measures is one of the most politically liberal tech companies, and MLI is arguably one of Canada’s most rightwing think tanks. But at the end of the day, Netflix is a large corporation with financial interests that could potentially be served by supporting a think tank that claims it “has been regularly recognized for our influential thought leadership in Canada.”
“Just because the Macdonald Laurier Institute is seen as more conservative, and Netflix is seen as having a more progressive agenda, doesn’t necessarily mean that their interests don’t align,” Donald Abelson, a professor of political science at the University of Western Ontario who is an expert on think tanks, told DeSmog.
But Abelson cautioned against assuming that Netflix supports MLI’s full political agenda; more than likely, its donation had nothing to do with pipelines. “Let’s say you joined a political party, does that mean you agree with all the policies or platforms that emerge from that party?” he said.
Netflix’s climate satire ‘Don’t Look Up’ broke viewing records when it was released in 2021. Credit: Netflix
Netflix didn’t respond to questions from DeSmog about the size of its donation or whether it was aware of MLI’s support for Trans Mountain, a pipeline designed to export an additional 590,000 barrels per day from the tar sands.
The think tank has an entire section about the pipeline in its report naming Netflix as a donor. That section doesn’t once mention climate change and claims that a failure to build Trans Mountain “threatens Canada’s economy.”
In the year that Netflix donated to the think tank, tensions were increasing over the Trans Mountain project, a 714-mile pipeline expansion connecting the Alberta tar sands to oil-carrying supertankers in the west coast city of Vancouver.
Many environmental groups and First Nations were opposed to the project, and so was British Columbia Premier John Horgan, whose government delayed issuing crucial permits while arguing that the environmental risks of a potential oil spill couldn’t be justified.
“I do believe we have a mandate to defend the coast,” Horgan said in 2018.
Kinder Morgan, the Texas-based company building the expansion, threatened to walk away entirely. All this constituted a “nightmare” to the Macdonald Laurier Institute, which argued in a report that “the attractiveness of Canada as a place for major investments is at stake.”
In May 2018, a senior fellow at the institute named Dwight Newman testified to Canada’s Senate, where he argued that the federal government had the legal authority to override environmental opposition to the pipeline in B.C. “Canada does have the legislative powers to get this project done if there is the will to do so,” Newman said.
Two weeks later, Prime Minister Justin Trudeau announced that the federal government would pay $4.5 billion to buy the pipeline from Kinder Morgan, effectively nationalizing the project. Trudeau called Trans Mountain “a vital project in the national interest” in a tweet, just one day after his government had declared a national “climate emergency” in Canada.
The Macdonald Laurier Institute was thrilled about the role it played in the pipeline fight. It claimed in its 2018 annual report to have shaped “government efforts to deal with the constitutional issues surrounding Trans Mountain,” adding that, “We have been at the forefront of efforts to chart a way out of the pipeline impasse.”
The Macdonald Laurier Institute didn’t say in its report how much money Netflix donated that year. But it is possible to quantify the climate damage that will be caused by Trans Mountain.
The pipeline, whose cost has now risen to CAD $21.4 billion, could result in up to 15 million tons of greenhouse gases released into the atmosphere annually once it’s completed in 2023, according to calculations by Environment and Climate Change Canada.
Netflix, by contrast, is now promising to cut or neutralize roughly 1 million tons of greenhouse gases related to its operations by the end of the year.
Trans Mountain threatens to wipe out those climate gains entirely.
Why workers are turning to unions
Besides fighting for better wages and working conditions, unions confront favoritism and discrimination when no one else will.
Amy Dennett long endured understaffing, low pay and indifferent bosses in her job at the American Red Cross in Asheville, North Carolina.
But she decided she’d had enough when management’s failure to provide basic resources forced her and her coworkers to build, jury-rig and dig into their own pockets for items needed to operate the blood donation center.
Dennett helped lead a union drive in 2020, resulting in the group’s vote to join the United Steelworkers (USW), and the 24 workers gained raises, greatly improved health care and much-needed equipment even before signing their first contract.
More and more workers like Dennett are realizing that unions fight for them every day, providing a path forward even in tumultuous times like a pandemic.
Gallup surveyed Americans on their confidence in 16 U.S. institutions ranging from the Supreme Court to television news. Over the past year, Gallup found, Americans’ confidence fell in all of them except one—organized labor.
“That doesn’t surprise me. We’re supposed to have faith in our elected officials and other leaders. But it’s a lot easier for a worker to have faith in the guy standing next to them than a guy in some other place you’ve never met who’s supposed to represent you,” Dennett said of the findings, noting that unions helped workers during the pandemic while many of the 16 institutions failed or exploited them.
In stark contrast to all of this, unions stepped up during the pandemic because their members needed them more than ever. They not only empowered workers to secure the personal protective equipment, paid sick leave and affordable health care they needed to safeguard their families but also continued winning the raises and benefits essential for years to come.
Those successes drove Americans’ support for unions to record levels and unleashed a wave of organizing drives among workers who put their lives on the line to keep companies operating during the pandemic.
“These workers have figured out, ‘Hey, I’m essential. I deserve to make enough to pay my bills,’” Dennett said, noting the USW “absolutely changed the dynamic” in her workplace.
Once “blatantly ignored,” she said, workers now have a seat at the table. And no longer do Dennett and her coworkers have to build their own organizers for tape and Band-Aids or scrounge parts for items like television assemblies.
“We ended up with the equipment that we need,” explained Dennett, a collection specialist, noting her coworkers now have quality computer carts like the one she had to buy for herself a couple of years ago.
The USW also represents Red Cross workers in Alabama and Georgia. When a cost-of-living analysis revealed the urgent need for raises in some of those locations, Dennett and her underpaid colleagues also received pay bumps, even before completing their first contract.
Workers’ demand for union representation cuts across all economic sectors, from manufacturing and retail to emerging clean industries and professional sports.
Players in the new United States Football League (USFL) recently voted to join the USW to ensure adequate housing, meals and health care, among other essentials, and to guard against the kinds of nightmares that followed the collapse of the Alliance of American Football in 2019.
That league folded overnight, stranding players in the cities where they were playing.
“There was no transportation home,” explained Kenneth Farrow, president of the United Football Players Association, which advocates for USFL players.
Farrow said the Alliance players got kicked out of their hotels, had to fund their own flights and rental cars and got stuck with ongoing medical expenses for game-related injuries. “There have been quite a few ugly situations,” he said, explaining why the USFL players wanted a union.
Besides fighting for better wages and working conditions, unions confront favoritism and discrimination when no one else will.
With the support of other unions, USW Local 7600 took a stand last year on behalf of thousands of members working at Kaiser Permanente health care facilities in the Inland Empire area of Southern California.
The union challenged Kaiser’s practice of paying those workers, many of them people of color, significantly lower wages than their counterparts performing the same jobs at the health care giant’s locations elsewhere. Some of the Inland Empire workers made 30 percent less than peers in Los Angeles and Orange County.
Kaiser tried to blame the pay gaps on a higher cost of living in Los Angeles, an excuse that fell flat with the USW members.
“I’m from LA. It’s not that much higher,” said LaTrice Benson, an anesthesia technician affected by the disparities.
In the end, Kaiser agreed to commit millions to closing wage gaps for the USW members as well as workers represented by other unions.
“It means the world to me and my colleagues,” Benson said. “We’re sincerely thankful for our union.”
Dennett sees the growing appreciation for organized labor even among the blood donors she works with every day. When she tells them she joined a union, she often gets the same response: “Congratulations.”
Recession Fears Spark Calls to Stop Hiking Interest Rates and Rein In Corporate Greed
"As Americans stare down the abyss of a potential recession, Fortune 500 c-suite executives are doing better than ever," noted one critic, "while their workers' wages have severely lagged behind."
Demonstrators rally in front of PhRMA's Washington, D.C. office to protest high prescription drug prices on September 21, 2021. (Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images)
As new government data on Thursday stoked fears of a looming recession—and even led to some claims that the nation is already experiencing one—progressives renewed calls for the Federal Reserve to stop hiking interest rates and policymakers to take on the corporate profiteering driving inflation.
"Reining in corporate greed is the key to bringing down costs for families and kickstarting economic growth."
The Bureau of Economic Analysis at the U.S. Department of Commerce released gross domestic product (GDP) figures that show two consecutive quarters of negative growth, which prompted some Republican lawmakers—hopeful to regain control of Congress later this year—to declare that "America is in a recession" and it is the Democrats' fault.
While two straight quarters of negative growth is often seen as a signal of recession, it is not that simple. Harvard University economist Jason Furman pointed out on Twitter Thursday there is "well over a 50% chance that Q1 and/or Q2 gets revised to positive."
"That's part of why NBER doesn't rely on advance GDP to call recessions," Furman added, referring to the National Bureau of Economic Research.
Alex Durante, an economist with the Tax Foundation think tank, told The Hill that "there's this perception, and people are not wrong to have it—it's probably even in my economics textbook from college—that it's two negative quarters of GDP that NBER uses to determine if there's a recession. That's actually not completely true. It actually looks at a wide variety of economic indicators to make that designation."
"They'll look at employment, personal income, durable goods, housing permits, so the GDP is certainly part of it, but they're looking at other indicators, as well," Durante explained.
As Dean Baker, senior economist and co-founder of the Center for Economic and Policy Research (CEPR), detailed Thursday:
The modest drop in GDP reported for the quarter is not good news, but it was hardly a surprise. It also was entirely due to inventory quirks, which will not be repeated in future quarters. Consumption is still growing at a respectable pace, as is investment.
The Fed has been raising interest rates ostensibly out of concern that the economy was growing too fast, causing inflation. This report should help to stem those fears. While people are apparently not so concerned about a recession to keep themselves from taking trips and going to restaurants, they are still not spending down their pandemic savings. The sharp drop in the inflation rate reported in the core [Personal Consumption Expenditures] deflator should also alleviate concerns about a wage-price spiral.
CEPR co-founder and co-director Mark Weisbrot argued in a Thursday opinion piece for MarketWatch that the Fed—which on Wednesday hiked interest rates for the second straight month—will be to blame if there is a recession.
"As many economists have noted, the vast majority of the increase in inflation that we have seen over the past 18 months has been a result of external shocks, most important the war in Ukraine, which has raised food and energy prices (the CPI energy index rose 41.6% over the past year from June); and the economic disruptions caused by the pandemic," Weisbrot wrote.
"Some of these prices have begun to reverse; and in any case it's difficult to see how the Fed's interest rate hikes are going to lower these prices, as Fed Chair Jerome Powell stated last month," he continued.
Critics of the Fed's interest rate hikes—from Sen. Elizabeth Warren (D-Mass.) and Rep. Pramila Jayapal (D-Wash.) to economists who formerly served in the federal government like Robert Reich and Claudia Sahm—have called on the central bank to rethink its approach, and some have taken aim at Powell.
Rakeen Mabud, chief economist and managing director of research and policy at the Groundwork Collaborative, said Thursday that the "GDP report makes it crystal clear that Jerome Powell is willing to push millions out of work and throw away our economic recovery in the name of an arbitrary 2% inflation target he doesn't even believe he can hit."
"We can all agree that fighting inflation should be a top priority," she added, "but asking the workers and families who have been hit hardest by rising prices to also bear the brunt of a potential recession is not just cruel—it's bad policy."
The GDP report came less than 24 hours after Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Joe Manchin (D-W.Va.) announced the Inflation Reduction Act, compromise legislation on climate, healthcare, and taxes. While some progressives have concerns about the specifics on climate, others called on congressional Democrats to swiftly pass the budget reconciliation package, which follows months of obstruction by Manchin.
"Sky-high inflation is a major contributor to the economic slowdown, and nothing is driving up costs more on everyday families than corporate greed," said Kyle Herrig, president of the government watchdog Accountable.US, in a statement Thursday.
"Across industries, we've seen major corporations continue to post record high profits and approve billions of dollars in shareholder giveaways while disingenuously claiming to have no choice but to raise prices so high," he noted. "As Americans stare down the abyss of a potential recession, Fortune 500 c-suite executives are doing better than ever, averaging over $18 million in compensation while their workers' wages have severely lagged behind."
According to Herrig:
Reining in corporate greed is the key to bringing down costs for families and kickstarting economic growth, and fortunately Congress has the opportunity [to] do it. Passing the Inflation Reduction Act will ensure corporations will finally begin to pay their fair share in taxes. This bill will put billions of dollars more into the pockets of Americans by reducing the leverage Big Oil, health insurance, and drug companies have to charge whatever they please—all while creating thousands of new jobs. Congress must not squander the best opportunity they may have for years to create an economy that works for everyone, not just billionaires and greedy corporations.
Unrig Our Economy campaign director Sarah Baron similarly asserted that the legislation "is a significant step towards combating corporate greed and making an economy that works for working people," highlighting the same provisions as Herrig.
"The vast majority of Americans rightly blame corporate greed for driving inflation, so it is heartening to see Democrats unite around a bill that addresses the issue at its source," Baron said. "As the bill is considered by Congress, Unrig Our Economy urges all members to decide where they stand—with corporations or with the hardworking constituents they were elected to represent."
Groundwork Collaborative executive director Lindsay Owens also backed the bill, saying that "the Inflation Reduction Act gets it exactly right: We bring down costs for families by making needed public investments, not pulling back on spending when we need it most."
"We bring down energy costs when we invest in clean energy and lessen our dependence on Big Oil profiteers. We bring down healthcare costs when we use public power to counter Big Pharma and get a fair price for seniors. And we strengthen our democracy and our economy when the largest corporations contribute to these investments, instead of buying politicians to oppose them," she added. "Congress should send the Inflation Reduction Act to the president's desk as quickly as possible."
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The Fed Will Be to Blame if the Economy Crashes Into a Recession
We don't need a recession—which would be devastating—to solve our inflation problem.
The U.S. Federal Reserve building in Washington, D.C. on June 22, 2022. U.S. Federal Reserve Chair Jerome Powell said Wednesday that the central bank is trying to bring inflation down without inflicting too much damage, but the Fed's aggressive rate hikes could tip the U.S. economy into recession. (Photo: Liu Jie/Xinhua via Getty Images)
The Federal Reserve's interest rate policy is one of the most important economic decisions that our government makes. If it were more widely understood, and the Fed were held more accountable, Fed officials would probably be more careful about the downside risks of raising interest rates too much.
A Fed that is overly aggressive in raising interest rates is expanding and solidifying the structures of inequality in the American economy, as it has done previously for decades in the past.
People talk about the Fed not being able to bring the economy in for a "soft landing" when inflation is too high. But when the Fed gets it wrong, and pushes the economy into a recession—as it has done in ending the vast majority of economic expansions that have taken place in the United States since World War II—it's not like a couple of bumps on the runway. It's more like a plane crash. Millions of jobs can be lost.
The Fed raised interest rates FF00, 0.00% another 0.75 percentage points Wednesday, continuing its most aggressive monetary tightening in four decades. How far will this go?
The "inflation hawks," e.g. economist and former Treasury Secretary Larry Summers, say that if "inflation is to be contained, unemployment is likely to rise to somewhere in the vicinity of 6% or more." And he appears to be talking about a recession. The difference between even 6% unemployment and the 3.6% we have today is more than 3.9 million jobs. No inflation spiral expected
Why should anyone sacrifice the future of so many people? The argument is that inflation will otherwise become permanently higher, or even spiral out of control.
But the economists who, with many millions of dollars of resources, produce the most reliable estimates of future U.S. inflation, tell a different story. The International Monetary Fund (IMF) this month projected 3% inflation for 2023. The Organization for Economic Co-operation and Development is projecting 3.5%. And the Federal Reserve itself, in June projected 2.6% for 2023.
Few economists would be scared of these levels of inflation for next year. But the inflation hawks have offered us more to fear than fear itself. What if we have an "inflationary spiral," in which there is some self-reinforcing mechanism that drives inflation continuously upward into dangerous territory?
The most popular version of this is a wage-price spiral, where rising prices cause workers to demand—and somehow get—higher wages, which leads to higher prices and so on. But clearly that is not the world we are living in. Wage growth has fallen from a 6% annualized rate at the end of last year, to just over 4% for recent months. So, there is no wage-price spiral, nor evidence that we are headed in that direction.
Scary scenario B is about expectations: if people or markets begin to increase their long-term expectations of what future inflation will be, that can also spiral upward as prices rise. But that has not been happening either.
The 5 year break-even rate, which is used as a proxy for market inflation expectations, has been about 2.6% since the start of July; about the same as it was a year ago. Solidifying inequality
It is well established that lower-wage workers and Black workers are hit much harder by recessions in terms of both unemployment and lost income. Conversely, in years when the economy is closer to full employment, wage gains are proportionately greater for the lower-paid sectors of the labor force.
So a Fed that is overly aggressive in raising interest rates is expanding and solidifying the structures of inequality in the American economy, as it has done previously for decades in the past.
As many economists have noted, the vast majority of the increase in inflation that we have seen over the past 18 months has been a result of external shocks, most important the war in Ukraine, which has raised food and energy prices (the CPI energy index rose 41.6% over the past year from June); and the economic disruptions caused by the pandemic. Some of these prices have begun to reverse; and in any case it's difficult to see how the Fed's interest rate hikes are going to lower these prices, as Fed Chair Jerome Powell stated last month.
At the press conference Wednesday, Powell said that "having a soft landing is what we're aiming for" but added: "at the beginning we said it was not going to be easy. It was going to be quite challenging to do that. It's unusual. It's an unusual event. It's not a typical event, given where we are."
But the Fed has not explained why a "soft landing"—avoiding a recession—would be so difficult. We do not have a giant real estate bubble as in 2006, or a stock market bubble as in the late '90s. Both of these were so large that it could be shown in advance (and it was shown) that they were unsustainable and capable of causing a recession when they burst.
This time, it's just the Fed's interest rate hikes that are threatening to cause a recession. The Fed should be able to make sure that it doesn't make that mistake.
Higher prices are not being driven by wage increases. They were not driven by federal assistance to people during the pandemic. And Democrats aren't to blame.
People shopping in the egg and dairy case on March 13, 2020 at Whole Foods Market in Vauxhall, New Jersey. (Photo: Rich Graessle/Icon Sportswire via Getty Images)
Corporations are raising prices above what's needed to cover their higher costs. These mark-ups have soared. Corporations are getting away with this price gouging because they face little to no competition. And they're using the specter of inflation as a cover.
Most families—who haven't had a real wage increase in years—used the assistance to pay down debt or save for the future. The assistance was barely enough to keep working families afloat. Fact #4: Inflation is not the result of President Biden's or Democrats' policies
Republicans want to blame them for rising prices. But Democrats have tried advancing bills to bring down prices and address corporate price gouging, yet Republicans and a handful of corporate Democrats refuse to pass them.
So don't fall for the corporate myths about inflation.
Higher prices are not being driven by wage increases. They were not driven by federal assistance to people during the pandemic. And Democrats aren't to blame.
Inflation is being driven in large part by record corporate profits. The best way to fight it is to remove corporate incentives to raise prices through a windfall profits tax. And reduce monopoly power through tougher antitrust enforcement.
Know the truth.
Watch:
The enduring tyranny of oil
War, inflation, geopolitical rivalry, and soaring world temperatures.
It may seem hard to believe, but only 15 years ago many of us were talking confidently about “peak oil” — the moment of maximum global oil output after which, with world reserves dwindling, its use would begin an irreversible decline. Then along came hydraulic fracturing, or fracking, and the very notion of peak oil largely vanished. Instead, some analysts began speaking of “peak oil demand” — a moment, not so far away, when electric vehicle (EV) ownership would be so widespread that the need for petroleum would largely disappear, even if there was still plenty of it to frack or drill. However, in 2020, EVs made up less than 1% of the global light-vehicle fleet and are only expected to reach 20% of the total by 2040. So peak-oil demand remains a distant mirage, leaving us deeply beholden to the tyranny of petroleum, with all its perilous consequences.
For some perspective on this, recall that, in those pre-fracking days at the start of the century, many experts were convinced that world petroleum output would hit a daily peak of perhaps 90 million barrels in 2010, dropping to 70 or 80 million barrels by the end of that decade. In other words, we would have little choice but to begin converting our transportation systems to electricity, pronto. That would have caused a lot of disruption at first, but by now we would be well on our way to a green-energy future, with far less carbon emissions and a slowing pace of global warming.
Now, compare those hopeful scenarios to the latest data from the U.S. Energy Information Administration (EIA). At the moment, world oil production is hovering at around 100 million barrels daily and is projected to reach 109 million barrels by 2030, 117 million by 2040, and a jaw-dropping 126 million by 2050. So much, in other words, for “peak oil” and a swift transition to green energy.
Why global oil consumption is expected to hit such heights remains a complex tale. Foremost among the key factors, however, has certainly been the introduction of fracking technology, permitting the exploitation of mammoth shale reserves once considered inaccessible. On the demand side, there was (and remains) a worldwide preference — spearheaded by American consumers — for large, gas-guzzling SUVs and pickup trucks. In the developing world, it’s accompanied by an ever-expanding market for diesel-powered trucks and buses. Then there’s the global growth in air travel, sharply increasing the demand for jet fuel. Add to that the relentless efforts by the oil industry itself to deny climate-change science and obstruct global efforts to curb fossil-fuel consumption.
The question now facing us is this: What are the consequences of such a worrisome equation for our future, beginning with the environment?
More oil use = more carbon emissions = rising world temperatures
We all know — at least, those of us who believe in science — that carbon-dioxide emissions are the leading source of the greenhouse gases (GHGs) responsible for global warming and the combustion of fossil fuels is responsible for the lion’s share of those CO2 emissions. Scientists have also warned us that, without a sharp and immediate decline in such combustion — aimed at keeping global warming from exceeding 1.5 degrees Celsius above the pre-industrial era — genuinely catastrophic consequences will ensue. Those will include the complete desertification of the American West (already experiencing the worst drought in 1,200 years) and the flooding of major coastal cities, including New York, Boston, Miami, and Los Angeles.
Now consider this: in 2020, oil accounted for more global energy consumption than any other source — approximately 30% — and the EIA projects that, on our present course, it will remain the world’s number-one source of energy, possibly until as late as 2050. Because it’s such a carbon-intensive fuel (though less so than coal), oil was responsible for 34% of global carbon emissions in 2020 and that share is projected to rise to 37% by 2040. At that point, oil combustion will be responsible for the release of 14.7 million metric tons of heat-trapping GHGs into the atmosphere, ensuring even higher average world temperatures.
With CO2 emissions from oil use continuing to rise, there’s zero chance of staying within that 1.5 degrees Celsius limit or of preventing the catastrophic warming of this planet, with all it portends. Think of it this way: the stunning heatwaves experienced so far this year from China to India, Europe to the Horn of Africa, and this country to Brazil are only a mild foretaste of our future.
Oil and the war in Ukraine
Nor are heat waves the only perilous consequence of our still growing reliance on petroleum. Because of its vital role in transportation, industry, and agriculture, oil has always possessed immense geopolitical significance. There have, in fact, been scores of wars and internal conflicts over its ownership — and the colossal revenues it generates. The roots of every recent conflict in the Middle East, for example, can be traced back to such disputes. Despite much speculation about how peak-oil-demand scenarios could theoretically end all that, petroleum continues to shape world political and military affairs in a critical fashion.
To appreciate its enduring influence, just consider the multiple connections between oil and the ongoing war in Ukraine.
To begin with, it’s unlikely that Vladimir Putin would have ever been in a position to order the invasion of another well-armed country if Russia weren’t one of the planet’s top oil producers. Following the implosion of the Soviet Union in 1991, what remained of the Red Army was in shambles, barely capable of crushing an ethnic insurgency in Chechnya. However, after becoming Russia’s president in 2000, Vladimir Putin imposed state control over much of the nation’s oil and gas industry and used the proceeds from energy exports to finance the rehabilitation and modernization of that military. According to the Energy Information Administration, revenue from oil and natural gas production provided, on average, 43% of the Russian government’s total annual revenue between 2011 and 2020. In other words, it allowed Putin’s forces to build up the vast stocks of the guns, tanks, and missiles that it’s been using so mercilessly in Ukraine.
No less important, after his military’s failure to take Kyiv, the Ukrainian capital, Putin would certainly have lacked the ability to continue the fight without the cash he receives every day from foreign oil sales. Although Russian petroleum exports have declined somewhat due to Western sanctions imposed after the war began, Moscow has been able to find clients in Asia — notably China and India — willing to buy up its excess crude oil once destined for Europe. Even if Russia is selling that oil at discounted prices, the undiscounted price has risen so sharply since the war began — with Brent crude, the industry standard, soaring from $80 a barrel in early February to $128 a barrel in March — that Russia is making more money now than when its invasion began. Indeed, economists at the Helsinki-based Center for Research on Energy and Clean Air have determined that, during the first 100 days of the war, Russia earned approximately $60 billion from its oil exports — more than enough to pay for its ongoing military operations in Ukraine.
To further punish Moscow, the 27 members of the European Union (EU) have agreed to ban all tanker-delivered Russian oil by the end of 2022 and cease its pipeline imports by the end of 2023 (a concession to Viktor Orbán of Hungary, which gets most of its crude oil via a Russian pipeline). This, in turn, would eliminate the monthly $23 billion that EU countries have been spending on those imports, but could, in the process, drive global prices higher yet, an obvious boon to Moscow. Unless China, India, and other non-Western buyers can be persuaded (or somehow compelled) to eliminate Russian imports, oil will continue to finance the war against Ukraine.
Oil, Ukraine, and the global inflationary tsunami
The connections between oil and the war in Ukraine don’t end there. In fact, the two have combined to produce a global crisis unlike any in recent history. Because humanity has become so thoroughly reliant on petroleum products, any significant rise in the price of oil ripples through the global economy, affecting nearly every aspect of industry and commerce. Naturally, transportation takes the biggest hit, with all forms of it — from daily commuting to airline travel — becoming ever more costly. And because we’re so thoroughly dependent on oil-powered machines to grow our crops, any increase in the price of oil also automatically translates into increased food costs — a devastating phenomenon now occurring worldwide, with dire consequences for poor and working people.
The price data tell it all: From 2015 to 2021, Brent crude averaged around $50 to $60 a barrel, helping to spur automobile purchases while keeping inflation rates low. Prices started rising a year ago, driven by growing geopolitical tensions, including sanctions on Iran and Venezuela, as well as internal unrest in Libya and Nigeria — all major oil producers. Nevertheless, the price of crude only reached $75 per barrel as 2021 ended. Once the Ukraine crisis kicked in early this year, however, the price shot up rapidly, reaching $100 per barrel on February 14th and finally stabilizing (if such a word can even be used under the circumstances) at the current rate of approximately $115. This huge price spike, a doubling of the 2015 to 2021 average, has substantially increased travel, food, and shipping costs, only compounding the supply-chain problems sparked by the Covid-19 pandemic and fueling an inflation tsunami.
An inflationary tide of this sort can only cause distress and hardship, particularly for less affluent populations across the planet, leading to widespread unrest and public protest. For many, such hardships have only been compounded by Russia’s blockade of Ukrainian grain exports, which has contributed significantly to rising food prices and increasing starvation in already troubled parts of the world. In Sri Lanka, for instance, anger over high food and fuel prices combined with disdain for the country’s inept governing elite sparked weeks of mass protests that culminated in the flight and resignation of that country’s president. Angry protests against high fuel and food prices have swept through other countries as well. Ecuador’s capital, Quito, was paralyzed for a week in late June by just such an upheaval, leaving at least three people dead and nearly 100 wounded.
In the United States, distress over rising food and fuel prices is widely seen as a major liability for President Joe Biden and the Democrats as the 2022 congressional elections approach. The Republicans clearly intend to exploit public anger over soaring inflation and gas prices in their campaigns. In response, Biden, who promised while running for president to make climate change a major White House priority, has recently been scouring the planet for additional sources of petroleum in a desperate drive to lower prices at the gas pump. At home, he released 180 million barrels of oil from the national strategic petroleum reserve, a vast underground reservoir created after the “oil shocks” of the 1970s to provide a cushion against a time like this, and lifted environmental regulations prohibiting the summer use of an ethanol-based blend known as E15, which contributes to smog during warmer months. Abroad, he’s sought to renew contacts with the previously pariah regime of Venezuela’s President Nicolás Maduro, once a major oil exporter to the United States. In March, two senior White House officials met with Maduro in what was widely viewed as an attempt to restore those exports.
In the most controversial expression of this drive, in July the president traveled to Saudi Arabia — the world’s leading oil exporter — to meet its de facto leader, Crown Prince Mohammed bin Salman. MBS, as he’s known, was viewed by many, including analysts at the Central Intelligence Agency (and Biden himself), as the person ultimately responsible for the October 2018 murder in Turkey of Jamal Khashoggi, a U.S.-based Saudi dissident and Washington Post columnist.
The president insisted that his principal motives for meeting MBS were to bolster regional defenses against Iran and counter Russian and Chinese influence in the Middle East. “This trip is about once again positioning America in this region for the future,” he told reporters in the Saudi city of Jeddah on July 15th. “We are not going to leave a vacuum in the Middle East for Russia or China to fill.”
But most independent analysts suggest that his primary objective was to secure a Saudi promise to substantially increase that country’s daily oil output — a move they only acceded to after Biden agreed to meet MBS, terminating his pariah status in Washington. According to press accounts, the Saudis did indeed agree to boost their rate of production, but also promised to delay announcing the increase for several weeks to avoid embarrassing Biden.
Ending the enduring tyranny of oil
It’s telling that the “climate” president was so willing to meet the Saudi leader to obtain the short-term political benefit of lower gas prices before American voters go to the polls this November. In truth, though, oil still plays a far deeper role in White House calculations. Although the United States no longer relies on Middle Eastern oil imports for a large share of its own energy needs, many of its allies — as well as China — do. In other words, from a geopolitical perspective, control of the Middle East remains no less important than it did in 1990 when President George H.W. Bush launched Operation Desert Storm, this country’s first Persian Gulf war, or in 2003, when his son, President George W. Bush, invaded Iraq.
Indeed, the government’s own projections suggest that, if anything, by 2050 (yes, that distant year again!), Middle Eastern members of the Organization of Petroleum Exporting Countries, or OPEC, could actually command a larger share of global crude oil production than they do now. This helps explain Biden’s comments about not leaving a vacuum in the Middle East “for Russia or China to fill.” The same line of reasoning is bound to shape U.S. policy towards other oil-producing areas, including in West Africa, Latin America, and the offshore regions of Asia.
It doesn’t take much imagination to suggest, then, that oil is likely to play a crucial role in American foreign and domestic policies for years to come, despite the hopes of so many of us that declining petroleum demand would foster a green-energy transition. No doubt Joe Biden had every intention of moving us in that direction when he assumed office, but it’s clear that — thank you, Joe Manchin! — he’s been overpowered by the tyranny of oil. Worse yet, those who do the bidding of the fossil-fuel industry, including virtually every Republican in Congress, are determined to perpetuate that tyranny at whatever cost to the planet and its inhabitants.
Overcoming such a global phalanx of oil-industry defenders will require far more political muscle than the environmental camp has yet been able to muster. To save the planet from an all-too-literal hell on earth and protect the lives of billions of its inhabitants — including every child alive today or to be born in the years to come — petroleum tyranny must be resisted with the same ferocity that anti-abortion forces have employed in their campaign to protect (or so they claim) unborn fetuses. We must, like them, work tirelessly to elect like-minded politicians and advance our legislative agenda. Only by fighting to reduce carbon emissions today can we be sure
