Showing posts with label Oil Crisis. Show all posts
Showing posts with label Oil Crisis. Show all posts

Wednesday, April 15, 2026

SPGB Snippets: Today’s take-away (2026)

From the Socialist Party of Great Britain website

April 15, 2026
Most crude oil (88%) refined in the US comes from fields in the US, Canada and Mexico, all a long way from the chaos currently being wreaked by the latest Middle East war. Yet average retail petrol prices in the US have risen by over 30% since January.

The reason? Along with every other major raw material, crude oil is subject to a world market price, so a major disruption to supplies, be it caused by war or an economic bottleneck, will have a global effect.

The lesson? National governments (however big the country!) have little influence over the world market. In particular, any politician who promises to control prices is lying through their teeth.

Saturday, June 18, 2022

Generating an Energy Crisis (1973)

From the June 1973 issue of the Socialist Standard

You may have noticed recently that capitalism is heading for another of its periodic crises. This time it is over the supply, or rather the lack, of energy. As world energy consumption increases at a rate of five per cent. per year (see Table 1) it has been predicted that power failures may become commonplace and transport and industry grind to a halt as the industrially advanced nations gobble up the planet’s remaining fossil resources.

Having recklessly squandered much of their indigenous fossil fuel supplies, literally without a thought for the future, some countries are finding themselves increasingly dependent on imported energy supplies. Britain’s dependence on imported energy rose from 25 per cent. in 1960 to 45 per cent. in 1970. The EEC as a whole in 1970 imported 63 per cent. of its energy requirement. Shell estimate that by 1985 Western Europe will be importing 900 million tons of oil yearly — the North Sea oilfield output of 250 million tons will be far short of demand.

Imports & Costs
The position in the United States appears to be even more critical. Three years ago Federal Power Commissioner Carl Bragge declared: “We may have to face up to the rationing of electricity as a matter of policy’’. President Nixon announced in February of this year that America was now consuming more energy than it produced. And it has been estimated that by 1980 America will be importing one third of its energy; even so it has a long way to go to catch Japan where some 90 per cent. of their energy demand is now imported.

Naturally fears have been expressed about the uncertainty over future prices of fuels which might affect trade and profits. In a debate in the House of Lords recently Liberal peer Lord Tanlaw said that
. . . as a nation which depends upon trade, it is vital that we should not let our energy costs get substantially out of line with those countries with whom we have to compete in international markets.
(Hansard 28 February 1973 col. 650)
This is particularly relevant in basic industries such as iron and steel and cement where direct fuel costs make up respectively 15 and 25 per cent. of the gross value of industrial output.

Tensions Develop
What the capitalist class requires are energy supplies which are secure and which will meet the foreseen needs of the economy at the lowest possible cost. These requirements are “planned for” in a state of international anarchy in which the best laid capitalist plan can come unstuck. For example the government’s 1967 White Paper on Fuel Policy made the exceedingly rash assumption that oil prices would remain stable. The intervening period has seen the producing countries gang together to hike up the price and the consumers have had to comply. But because the ruling class and their governments look at the problem with these narrow commercial priorities they see only the present short-term energy crisis. This will be solved, at least temporarily, by such measures as increased investment and by governments lowering protective trade barriers and underwriting the search for new supplies of the old fuels.

However there is a much more serious long-term energy crisis which capitalism has not yet faced up to. The present world set-up is unlikely to be able to provide the massive amounts of energy that will be necessary to raise the living standards of the world’s desperately poor majority even to the miserable level of the “affluent” west. Further, as industrialism spreads tensions are likely to develop over the control of present and possible future sources of energy supplies with the outbreak of war an ever-present possibility.

Assuming, and there is very strong evidence for doing so, that there are enough fossil fuel resources to last for at least the next one hundred years (see Table 2), is there in the longer run an alternative to the energy starvation predicted by some scaremongers? It is clear that to survive man must develop other sources of energy, for without energy man will be unable to continue to change the world around him for his own benefit. The present expansion of nuclear fission programmes may provide a short-term stop-gap but as a long-term solution it looks like being a non-starter. To succeed in replacing conventional fuels by nuclear power sufficient to meet demand in the year 2000 one 1,000 megawatt station a week should be built from now till then. As it is, half the power stations on order in the US are nuclear, and in 15 to 20 years one-third of the electricity in Europe will come from nuclear fission in an attempt to keep up with electricity consumption which doubles every ten years. In England and Wales output of electricity is now 50,000 MWe. By 2000 it is expected to be 160,000 MWe, half of it nuclear.


Using Fusion
But in the long run the reliance on nuclear fission has serious drawbacks, the most important of which is the production of highly dangerous radioactive waste by-products, some of which remain dangerous to human life for tens of thousands of years. (The rather frivolous suggestion that these might be shot off to the sun aboard a space rocket is not really on). Such waste products are dangerous even at very low levels and by the end of the century will present us with the problem of what to do with six-billion plus curies of Strontium 90 — thirty times as much as would be released by a nuclear war and enough to contaminate all the fresh water in the world. Still, it is possible that capitalism will decide that the economic considerations outweigh the risks of contamination. Obviously we must look elsewhere for future energy resources.

The most promising alternative so far is nuclear fusion. In the fission process a heavy nucleus is split into two parts and energy is released. In the fusion process on the other hand, two lightweight elements combine to form a heavier and more tightly bound nucleus with the simultaneous release of significant amounts of energy. This energy-releasing rearrangement collision can occur between various common isotopes of hydrogen. The beauty of it is that these isotopes are in virtually inexhaustible supply. For example there is estimated to be one Deuterium isotope for every 5,000 atoms of hydrogen. So abundant is this substance in sea water that to reduce the present concentration by a mere one per cent, would be equivalent to consuming 500,000 times the world’s initial supply of fossil fuels. One third of a cubic mile of sea water would equal the energy consumed by man up to 1960. Gram for gram several times more energy is released by fusion than by fission. In addition the fusion process would produce virtually no pollution problems from radioactive waste. The contamination of equipment would have a very short half life, and would form fuel for further energy-producing cycles. In fact it would be so safe that it might be possible to have the nuclear fusion stations near the centres of population.

Held Back
In spite of the obvious advantages of having a safe, clean and abundant energy supply, progress toward fusion power is being blocked by a lack of money. William Gough and Bernard Eastland of the US Atomic Energy Commission are convinced that the remaining problems are merely technical ones. They say that
. . . continuing effort is sustained by the growing conviction that the eventual attainment of a practical fusion power reactor is not blocked by the laws of nature . . . (and that) . . . At present the main factor limiting the rate of progress toward fusion power is financial.
(Scientific American February 1971) 
Their estimation of the date for the first fusion power reactor ranges from 10 to 50 years. Harold Furth, head of the Plasma Physics Laboratory at Princeton University, is convinced that
Estimates based on recent experimental progress indicate that a demonstration of the scientific feasibility of controlled fusion may be achieved before the end of the 1970s.
(Britannica Yearbook of Science and the Future, 1973.)
All this has been achieved virtually on shoe-string budgets. If the capitalists were really intent on solving the energy problem then massive research efforts on the scale of their various moon shots or their wartime search for the atomic bomb would be called for. Instead between the lot of them, they spend only a paltry £60 million per year world-wide on research into nuclear fusion. Compared with the massive “defence” budgets put up by all capitalist governments (£2,461 million by Britain alone in 1970) which have enabled strategists to build apparatus of death of such fiendish complexity that only a few years ago would have been considered totally impossible to build under any circumstances. These are the priorities capitalism fosters.

Cutting the Money
In this country nuclear fusion research suffered a serious set-back at the hands of the Labour government who were, it will be remembered, elected after promising to usher in the white-hot technological revolution. Wedgwood Benn demonstrated what a damp squib this promise was turning out to be. As Minister for Technology he was responsible for halving the research programme at Culham Laboratory despite the “outstanding quality and considerable scientific achievement” of the work done there in the field of nuclear physics for which it had a “high international standing.” Spending on this vital area of research declined from £4.5 million in 1966-67 to £3.9 million in 1969-70. When examined by a Select Committee on Science and Technology in March 1968 Dr. J. B. Adams had to admit that Culham Laboratory would have to reduce the amount of work on the fusion programme. In addition there would obviously be difficulties in maintaining the quality of that work, in maintaining the best of their staff, and in maintaining the morale of the staff.

The 1967 decision was made entirely on short-term economic grounds. It was argued that if fusion was going to be used it must come in because it is cheaper. (Remember the government were looking forward to a period of cheap stable-price oil supplies). All the other advantages were not considered worthy of financial support as fission reactors looked economically so attractive. In announcing the cuts Benn said:
. . . rapid progress has been made towards economic nuclear fission power. In particular the fast breeder reactor programme shows real promise. Consideration of this progress . . . leads inevitably to the conclusion that plasma physics and fusion research should be substantially reduced . . . I can understand . . . the need for focussing research on economic projects, which is very much part of the philosophy of my Department.
(Hansard 26 July cols. 644-647)
Keep it a Secret
Tom Boardman, Minister for Industry, told the House of Commons earlier this year that the Government had accepted recommendations of its fusion review committee to restore spending on fusion research almost to the 1967 level. To put this announcement in perspective it should be borne in mind that in this period the government spent £7 million annually on maintaining military bands. Still Culham Laboratory is lucky to survive at all. There was at one time (according to Jeremy Bray who was a Junior Minister at the time) a “. . . powerful body of opinion that the work should have been closed down altogether”. (Hansard 26 March 1968 col. 1441). When challenged he refused to give names but without losing ourselves in the realms of wild speculation we can suggest that they might represent the interests of a small minority group who wish to maintain the status quo — all those with investments in oil and nuclear fission technology for example. Such a group would see their capital investment devalued by a breakthrough in fusion research. Under capitalism the function of governments is to protect such investments in any way possible. Profits are put before human need, and now apparently before human survival!

This might also partly explain the starvation of funds for fusion research. It might also explain the more sinister developments now taking place in the United States. These involve the deliberate stone-walling over and attempted suppression of research into nuclear fusion. The experiences of Dr. LoDato and Professor S. A. Goudsmit, are cases in point. Dr. LoDato left the Rand Corporation to work on fusion power. He had been investigating the possibility of using beams of high intensity laser light to raise the nuclear fuel to a sufficiently high temperature for fusion to take place. This work was greeted enthusiastically by AEC scientists who were of the opinion that this represented a major breakthrough. Yet when he applied for a grant of $80,000 he was told that not only had his application been turned down but that all his work including his notebooks had been classified secret and that he was prohibited from discussing his work with anyone. Professor Goudsmit, editor of the highly specialized journal Physical Review Letters, sent an article submitted to him for publication to a “referee” for his comments. The referee replied that all but two paragraphs of his report could not be published in the journal until they had been declassified. Commenting on this cloud of what Goudsmit called “officially inspired reticence” the influential scientific journal Nature said:
. . . where laser-induced fusion is concerned, the AEC has apparently been trying to prevent independent authors from publishing their entirely independent research . . .
(Nature 16 February 1973)
Rehabilitation
At present, then, as The Times put it: “It certainly looks as if . . . ideas that may lead to new and better ways of generating electric power are not being allowed to be circulated” (21 February 1973). How successful these sectional interests within the capitalist class will be in thwarting future developments in this way is difficult to say. What we can be sure about is that Socialism, being a classless society based on the common ownership and democratic control of the means of life by the whole community, such minority sectional interests could not possibly prevent the advance of knowledge by censoring the publication of the results of any kind of research. Socialism will be a society of abundance based on developments that are already taking place but which are warped and distorted by capitalism’s profit motive.

Given the scientific and technological possibilities plus the human priorities of Socialism we could have a world society of abundance and make a serious start to the big clean-up and rehabilitation of this degraded planet.
Gwynn Thomas

Tuesday, May 31, 2022

World View: The world crisis spreads (1998)

From the October 1998 issue of the Socialist Standard

The dominoes are falling all around: Indonesia, Malaysia, Thailand, Korea, Japan, Russia, and now Latin America. “On Wednesday, Colombia became the first Latin American country in the region to devalue its currency following weeks of intensive pressure, sparking a slide in bond and stock markets in Mexico, Venezuela, Brazil and Argentina. Venezuela, whose currency has been under intense pressure for weeks, launched an immediate round of public spending cuts” (Observer, 6 September).

Venezuela is particularly vulnerable at the present time. It is one of the world’s leading oil producers; it also has vast deposits of iron ore and gold, much of which including other mineral resources have yet to be explored. Twenty years ago, when the price of oil plummeted on the international exchange, Venezuela suffered mass unemployment as well as inflation. In 1988, the price of oil went down further; and in February 1989, the government introduced austerity measures which severely cut working-class incomes. The result was mass rioting, which caused millions of dollars in property damage and the loss of 300 lives.

The 1990s, therefore, opened with Venezuela teetering on the edge of total instability. On February 2 1992, a faction of middle-rank officers tried to overthrow the government in a coup. The army, however, backed the President and soon regained control. On 27 November the same year, another coup was attempted, this time by junior officers of the air force; again it was unsuccessful. Nevertheless, many people wanted change, if only to end the cycle of corruption and instability.

In January I 994, Venezuela’s second largest bank, the Banco Latino, collapsed, and the government had to nationalise it. It had to pump in two billion dollars to cover its losses.The government began an enquiry, but the bank’s assets had been relocated overseas, and it proved almost impossible to get the money back. This caused panic among depositors, and most tried to withdraw their money without success. The effect was to undermine the economy and drain Venezuela’s already dwindling cash reserves. The Venezuelan economy has never really recovered.

What of the working class? It can only get worse for them. And they have always existed in poverty. Caracas, the capital of Venezuela, is a huge city of modern high rise buildings, mixed with many building which are in desperate need of repair. But even the people who live in these dilapidated apartments are “lucky” compared with the people who reside in the ranchos ringing the city, and in the mountains around the city. They only have run-down shacks. As in most of the world, the majority of the people in Caracas are poor.

The present, and the future, is indeed grim unless the workers of Venezuela, as elsewhere, rouse themselves and organise for the replacement of the present system by a new world-wide system of production for use and the satisfaction of individual and social needs. There really is no viable alternative.
Peter E. Newell

Tuesday, July 28, 2020

Four wheel oil crisis (1979)

From the July 1979 issue of the Socialist Standard

So is there another oil crisis or not? The government, and the motoring organisations, insist that there is not — yet. During the recent Spring bank holiday garages were shut, and those that did open were charging up to £1.50 a gallon for petrol.

So is the motor car doomed? What of alternative energy? Questions like these seem to be commonplace these days, but really, what is the situation?

Demand for petrol is rising at a time when oil companies are saying they can only meet last year’s delivery levels. With Iran going ‘off stream’ and exporting no oil at all for some months, and the oil-producing countries (OPEC) seizing their chance to increase prices by varying amounts (dependent on how ‘moderate’ their governments are), the hopes of British capitalism turn again to the North Sea.

The situation became such that a meeting of energy ministers was called in Paris in May to decide the appropriate action to be taken. This meeting only served to emphasise the problems of trying to get agreement between capitalist countries on something so vital as their access to sources of oil. Its result was a relatively ineffectual statement that a cutback of five per cent would be attempted.

America, which consumes twice as much oil as others, is a prime victim for expected cutbacks. But American workers regard their cars as almost sacrosanct. And politicians rely on motorists’ votes, just as the motor industry relies on a market. So much of the American economy relies on the motor industry that a cutback in oil consumption, at this time, is highly unlikely.

Transition to obsolescence
So where does the problem lie? The capitalist world relies on its oil supplies. Industry and the domestic scene is almost as dependent on oil as we are on the air we breathe and oil is running out! In fact, the oil-powered car was doomed at its outset and has long been living on borrowed time. The internal combustion engine was developed at a time of seemingly unlimited supplies of fuel. It is uneconomic, inefficient, and is now making the hard transition to obsolescence.

The internal combustion engine and its petroleum fuel (with additives) is a major source of modern-day pollution. Lead from exhausts, hydrochloric acid, carbon monoxide, noise, accidents, and so on, are direct sources of pollution. Add to this the indirect sources in associated industries like rubber, steel and chemicals, and some measure of the problem can be imagined. This observation also gives some indication of the capital investment involved. And here is the crux of the matter.

Alternative Fuels
So what is to happen to the motor car? It has become such a necessity to so many people that its withdrawal would cause a major upheaval in society. It has undermined the profitability of so-called public transport, with the result that services have been cut and geared to their profitability rather than usefulness. So, returning to the matter of the motor car, are there alternative fuels and propulsion units?

Hydrogen, electricity, even nuclear fuel, are suggestions. No doubt the motor industry will become even more cut-throat as the oil situation worsens. Some industries will fold up, others will emerge. New technologies will probably result, and slowly and painfully the motor industry will change to a new fuel/propulsion system or transport concept.

This is the standard day to day, year to year running of capitalism. Crisis to crisis. And it is the workers, the majority of people in this world, who suffer. As capitalism survives it will continue to cause hardship, anxiety and stress to the working class. Fuel/propulsion systems, the oil crisis, other industrial/domestic problems, will all come and go, but always as dictated by capitalism’s drive for profit. And this crazy, inefficient, polluting system will last until those workers act to abolish it. Something to think about in the traffic jam — or the queue for the petrol pump.
MJSP

Sunday, February 10, 2019

From crisis to complacency (1988)

1987 Edition
Book Review from the February 1988 issue of the Socialist Standard

The Energy Question. Gerald Foley (Pelican £4.95)

When the review copy of this book arrived I took my old one down from the shelf to compare them. The latter was published in 1976 and must have been written not long after the 1973 Arab-Zionist War and the quadrupling of oil prices in world markets.

The conclusion of most experts then was that there was too little oil and too many customers. Commodity markets — tin. coffee, copper, palm oil — boomed because the scarcity was believed to extend to everything except people; there were, it seemed, too many of us. Catholics rejected this view because God would not bring people into the world without means for them to exist.

Colin Clark, an adviser to the Pope on economic demography, had concluded that the world could feed ten times its current population to American standards and thirty times to Japanese standards.

But the majority of experts inclined to the view that scarcity was coming to haunt us. Oil and other sources of energy, along with most minerals and fertile soil, were in short supply and getting shorter Interested parties joined the chorus: producers of oil and minerals used the scare to jack up prices. Vegetarians argued that if we gave up meat there would be plenty of nut-cutlets for us all. Even Gerald Foley wrote in the early edition: “It is inevitable that the future will be more vegetarian than the past".

Twelve years on we are assured that there is too much of everything. Primary commodity prices have crashed: copper producers like Zambia and tin producers like Malaya are in economic difficulties. Europe is drowning in wine and olive oil lakes and there are mountains of meat and fruit and grain.

And energy, whose input equals half a ton of coal-equivalent for every man, woman and child in Britain for food-production alone:
  The energy picture is very different from that of 1976. when the first edition of this book was published. The atmosphere at that time was one of crisis. Now the anxiety seems to have completely disappeared. A decade ago there were worries about whether industrial society would reach the year 2000 without a major upheaval in its ways of obtaining and using energy; now the consensus is that the turn of the century will see business very much as usual.
Now why should all that be? Had some new element come onto the scene to change all the equations about energy? Nuclear energy had promised, or rather its PR officers had promised a future of free or nearly free energy. But that dream had already gone sour by 1976. The American nuclear industry, operating on a purely commercial basis, had already stopped ordering nuclear power stations and many of the utilities who had ordered or who were operating them were facing bankruptcy. Countries like Britain and France who continued to order or operate them were doing so for political reasons, like obtaining war supplies of plutonium from the Magnox stations, or as a counter to the power of the mining unions in the British government's case, or to the power of the Arab oil producers in the French case. Gerald Foley has no doubt as to the real reason:
  When the oil crisis arrived in 1973, there was a widespread misapprehension that it was connected with resource depletion. In fact, it was almost entirely a matter of economics and world politics, [ibid]
A couple of pages later he puts it even more bluntly: "In retrospect, it is clear that the energy crisis was to a large extent a creation of the major energy interests".

1976 Edition
So all that tizzy of excitement over self-sufficiency in the late sixties and early seventies was based on a false premise. All those flat-plate solar collectors on every roof and Cretan windmills in every backyard, methane digesters and Pelton Wheels and hand mills for grinding your own corn. Still, this book deals kindly with them and is careful not to throw the baby out with the bathwater. Houses are still being built with big picture-windows facing north — the planning laws and building regulations say nothing about orientation; the heating requirements of most houses could be cut by three quarters for a modest expenditure on insulation and of most factories by an even bigger factor.

The "energy crisis"' did, nevertheless, produce substantial economies in the use of fuel, particularly in the US. American motorists spurned the gas-guzzler cars in favour of the Volkswagen Beetle in sufficient numbers to bankrupt Chrysler and force General Motors and Ford to redesign their products. In Britain the small ads columns were full of oil fired boilers that hard-pressed householders could not afford to run. Alternative and sometimes desperate measures: paraffin stoves, electric storage radiators, log stoves, rarely offered a real solution.

Now it is: as you were, and oil is once more among the cheapest of fuels. The chapter: "Planning for Scarcity" in the 1976 edition has been changed to: "From Crisis to Complacency". The point is still there but the emphasis is different. Gerald Foley comes up to the jump but refuses it. If he had only questioned the Market Economy itself. But if my aunt had wheels she would be a bicycle. The author is not in the business of political/economic analysis or he would have written a different book.

What he has written, and rewritten, is a compendious trip, historical and geographical, around the subject and provides a massive amount of material for us non-specialists to analyse. The tables and graphs are particularly comprehensive.
Ken Smith