Citizen Action Monitor

How the fossil fuel industry became the bedrock of a capitalist system that is now an existential threat

Our very survival dictates that we must be part of the struggle to get rid of capitalism — There is no alternative.

No 1864 Posted by fw, January 8, 2017

Amy Leather

Amy Leather

“The whole infrastructure of capitalism has been built on fossil fuel. These enormous historic investments would have to be written off if we were to make a transition to renewables. Such a vast global write-off of capital would be unprecedented in scale. Globally the replacement cost of the existing fossil fuel and nuclear power infrastructure runs into trillions of dollars. It is unlikely that companies operating it would be happy to write off that amount and replace it with a renewable energy system carrying an even higher price tag…. the irrationality of capitalism dictates the opposite from the action that needs to be taken. This is red-flagnot a technical problem. Studies show that a full transition to renewable, non-carbon fuels is physically possible. Of course, it would cost money but, as we’ve seen, states have made investments on this scale before, particularly during wartime. But the historic investment in the fossil fuel industries and the colossal vested interests with the power to lobby governments mean that we are up against massive economic and political obstacles.”Amy Leather, Socialist Review

Uncle Sam on an oil binge

Uncle Sam on an oil binge

In a convincingly argued essay, Amy Leather, a prominent member of the Social Workers Party (UK), traces the history of Britain’s transition to fossil fuels from the early 1800s, with the use of coal for steam-powered machines, through the invention of the internal combustion engine, which paved the way for the rapid growth of the oil industry’s concentration and centralization of capital that saw giant companies dominating the global economy.

Today, with Donald Trump in the White House and Britain’s Tories pushing through damaging policies as fast as they can, our climate future looks bleak. But we must look beyond individual politicians if we are to understand capitalism’s love affair with fossil energy.

The author concludes on a challenging note:

“The impact of climate change intensifies all struggles bred by capitalism. We have to be part of those struggles, link them together and crucially connect them to the power to get rid of capitalism completely. We have to fight now to stop the further expansion of fossil fuels but we also need to fight to replace a society based on accumulation for profit with one based on production for need.”

As things stand now, the power advantage – political, corporate, economic – appears to be very much in the capitalists’ favour. Citizen action groups, on the other hand, must understand democracy’s pitfalls, especially the presumption that  citizens make coherent and intelligible political decisions.

Below is a repost of Amy’s article with my added subheadings and text highlighting. To read the piece on the website of the Socialist Review, click on the following linked title.

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Hopelessly devoted to fossil fuels by Amy Leather, Socialist Review, January 2017 Issue

World leaders are failing us on climate change

World leaders are failing on climate change. Theresa May’s Tory government has given the go ahead to a new nuclear reactor at Hinkley Point, backed the expansion of Heathrow airport and overturned the local decision in Lancashire to stop fracking. Meanwhile climate change denier Donald Trump is heading to the White House.

Recent massive expansion of dirty energies has kept us on track for unsustainable global warming

The last decade has seen a massive expansion of so called “dirty energies” such as fracking, deep water drilling, and tar sand extraction. The pledges to reduce carbon emissions in the Paris Agreement, signed by 196 countries in December 2015, are only voluntary. Even if signatories kept to them we would still be on track for global warming far higher than is sustainable.

Absent urgent action, we face catastrophic climate change

The scale of the crisis is widely recognized. Climate scientists and environmentalists such as Ian Angus have shown that we have entered a new geological era — the Anthropocene — in which the dominant influence on the environment is human activity. Unless urgent action is taken we face catastrophic climate change. The solution to global warming is quite simple — we need to stop burning fossil fuels such as coal, oil and gas which release carbon dioxide into the atmosphere and instead make a rapid switch to renewables.

Tackling the climate crisis means opposing guardians of the fossil fuel industry and their political pals

So why won’t our rulers act? We need to look beyond the individual politicians. There are, of course, the climate change deniers, who must be challenged and stopped, but much of the ruling class does accept that climate change is a reality. The problem is they are guardians of a system with fossil fuels at its heart. Tackling the climate crisis would mean tackling the vested interests of the fossil fuel corporations — some of the most profitable companies in the world.

To understand why capitalism and fossil fuels are so intertwined we need to go back to the time of the industrial revolution in Britain.

Transition to fossil fuels began in Britain in the early 1800s with use of coal for steam-powered machines

Andreas Malm, in his book Fossil Capital, outlines how in the early 1800s an energy transition took place in Britain. The first machines of the industrial revolution, the spinning and weaving machines of the cotton industry, were driven by water. In 1800 there were at least 1,000 water mills concentrated in Lancashire and Scotland. Even as late as the 1820s most mills in Manchester were still water-powered. Just ten years later steam generated by burning coal had overtaken water.

Protracted battle

Coal’s mobility allowed capitalists to locate industries where the workers were

This transition to steam was not an inevitable consequence of James Watt’s invention of the rotative steam engine in 1784. A protracted battle took place in industry. Water’s main advantage was that it was free, as well as being abundant in the rain soaked areas of Scotland and the north west of England, where the cotton industry was based. But steam allowed capitalists to exploit labour more efficiently. Coal was mobile. The capitalist could move it to where the labour sources were, rather than having to move people to where the energy source was.

Water-powered mills or factories had to be built next to the water source. A disciplined workforce was hard to find in such rural areas and so the mill owners would have to invest in building a “colony” — a settlement near the water source to house and service workers. This was both an extra outlay and an invitation to industrial strife. In contrast coal was a “ticket to the town” giving capitalists better access to disciplined workers in the newly expanded urban areas. The cost of coal began to be offset by these benefits.

Britain’s Factory Acts of 1820s-30s gave competitive advantage to steam over water power

A number of factors came together in the 1820s and 1830s. The Factory Acts, which limited working hours, had a greater impact on the factories powered by water. Previously, if these mills lost production time due to a lack of water supply, they would make it up by imposing longer hours to offset the lost production. Once this avenue was closed the advantage began to fall to steam.

Thus, the fossil economy was born and nurtured in Britain

So the fossil economy has one incontestable birthplace: Britain. However, this wasn’t a collective decision by the whole British population. In fact the introduction of steam was often fiercely resisted by workers, such as in the Plug Plot Riots of 1842, which were linked to the Chartist movement. Workers pulled the plugs out of the steam engines, stopping production by allowing the water to escape.

Shift to coal quickly spread to US and later throughout Europe

The introduction of steam unleashed a process, a path of development, with fossil fuels at its heart. The nature of capitalist competition means that once one capitalist introduced a new method others were forced to follow in order to keep up. The shift to coal didn’t stay confined to Britain. Economic and military competition meant that the fossil economy was soon projected across the globe. By the end of the 19th century industry and railroads in the US were burning more coal than those in Britain, while Germany and a number of other European countries were also about to catch up.

New market

Invention of the internal combustion engine paved the way for the rapid growth of the oil industry

The introduction of oil further drove this process. Petroleum had previously been used mainly for lighting as kerosene and as lubrication. The inventions of the internal combustion engine in the 1880s and of the aeroplane in 1903 created a new market for it. These new machines used gasoline — a part of petroleum that refiners had been previously discarding. In the early 20th century imperial armies became major customers for gasoline. Oil-powered tanks, aeroplanes, destroyers and submarines played decisive roles in the First World War.

Outbreak of World War I drove Britain to convert battleships to oil, thus freeing itself from coal miners’ politicking

One breakthrough for petroleum was Britain’s decision in 1912 to convert its battleships from coal to oil. Class interests played a major role in the decision. The only source of the high grade anthracite coal that fuelled battleships was the Welsh mines. In 1910 Winston Churchill had used the army to break strikes in these pits. When he took responsibility for the army in 1911 he immediately initiated a programme to convert the battleships to oil. He said that in doing this the government “was freeing itself from the political claims of the miners”.

Growth of auto and chemical industries opened new markets for oil industry

Shortly after the First World War mass production of cars began. By 1929 the car industry was the largest in the US. Meanwhile the chemical industry was developing new products made either from the by-products of oil refining or requiring the high levels of energy that only oil could provide. The 1930s saw the invention of synthetic fibres such as nylon and the first mass-produced plastics and industrial chemicals.

Concentration and centralisation of capital saw giant companies dominating the global economy

From the 1880s onwards the concentration and centralization of capital saw giant companies dominating the global economy — nowhere more so than in the fossil industries. In 1930 over half of the 200 largest industrial companies in the US were in the chemicals, petroleum, metals, rubber or transportation industries. Such concentrated power meant that decisions made in a handful of enterprises could rapidly change whole industries and affect the entire world.

With ramped up oil drilling and refining came the post-1945 “great acceleration in global warming”

In his book, Facing the Anthropocene, Ian Angus points to “the Great Acceleration” in global warming that took place after 1945. Total world energy consumption more than tripled in the post-war period. The conditions for this were shaped by developments made during the Second World War. The US government pumped massive amounts of money into oil-related industries to help the war effort. Six out of every seven barrels of oil used by the Allied Forces came from US wells and were refined by US oil companies. The government built new pipelines and refineries equipped with new technology. The US car industry stopped commercial production and instead made 2 million jeeps and trucks plus aeroplane engines, tanks, armoured cars, machine guns and bombs — funded by $29 billion in government subsidies. These industries ended the war with updated and expanded facilities, which laid the basis for a massive expansion of production.

After the war, the US government sold off updated factories to oil and chemical companies at bargain-basement prices

The US government also ploughed money into the petrochemical plants to produce nitrogen for explosives, synthetic rubber for tyres and nylon for parachutes. After the war the government sold these new updated factories and plants at knock down prices to private oil and chemical companies, paving the way for a new age of plastic. This state-led renewal of manufacturing had enormous implications for both the global role of the US and the use of fossil fuels.

Marshall Plan

Washington financed European companies so they could buy oil from US corporations

The Marshall Plan of 1948 strengthened the global role of US corporations. The US state gave vast amounts of money to European countries so they could buy oil from US oil companies. Between 1948 and 1951 more than half of the oil sold to Western European buyers by US oil companies was paid for with Marshall Plan funds.

US also susidized expansion of its oil companies in Saudi Arabia to meet European demand

The US government also subsidized the expansion of its oil companies into new facilities in Saudi Arabia in order to meet European demand. Before the war 20 percent of Europe’s oil imports came from the Middle East, rising to 85 percent in 1950. This setup accelerated Europe’s long-term transition from coal to oil dependence. World oil production grew by more than 700 percent in the period 1946-73.

Further driving the expansion of these massive corporations was industrialization of agriculture and continued high military expenditure

The Second World War fundamentally shaped the terrain, enabling the growth of massive corporations in the fossil fuel economy. Other trends drove this further, such as the industrialisation of agriculture with its use of synthetic fertilisers and pesticides derived from oil. Today’s food system is reliant on fossil fuel inputs at every stage of production, distribution, packaging and consumption.

US military is now the world’s largest user of petroleum and Earth’s largest polluter

Continued high military expenditure after the war also had an impact. Today the US military is the world’s largest user of petroleum, the largest polluter — producing more hazardous waste than the five largest US chemical companies combined — and the largest producer of greenhouse gases.

A huge barrier to transitioning to renewables is the vast required global write off from existing fossil fuel investments

The whole infrastructure of capitalism has been built on fossil fuel. These enormous historic investments would have to be written off if we were to make a transition to renewables. Such a vast global write-off of capital would be unprecedented in scale. Globally the replacement cost of the existing fossil fuel and nuclear power infrastructure runs into trillions of dollars. It is unlikely that companies operating it would be happy to write off that amount and replace it with a renewable energy system carrying an even higher price tag.

Capitalists want to retrieve their costs

Capitalists want to retrieve their costs. Even once the cost of, for example, a power plant has been recovered it is still better to keep it in operation for as long as possible. Decommissioning the structure and constructing another would be to start all over again and lose any market advantage. Two thirds of US power plants built since the 1890s are still in use.

Capital has vested interest in endurance of fossil fuel industry

Capital has a vested interest in the endurance of the fossil fuel landscape. Although it is rational from the point of view of the planet to switch to renewables, it is completely irrational from the point of view of each individual capitalist. And, of course, the fossil fuel industries have plenty of money to ensure they do continue. Naomi Klein in her book, This Changes Everything, exposed the vast lobbying power of these companies. In 2013 in the US alone the oil and gas industries spent $400,000 every day lobbying Congress and government officials.

While politicians dither, the carbon emissions problem is prolonged and gets worse

The problem gets worse as time goes on. Investment in fossil industries doesn’t stop while governments argue over what to do about emissions. When and if the decision is finally made to cut emissions seriously, far more capital will have to be liquidated than if the process had been started decades ago. In the first decade of the new millennium more coal fired power plants were constructed than in any previous decade. In the three years from 2010 to 2012 more than two and a half times more coal capacity was added than in the entire decade of the 1990s.

Embedded

While everyone of us must accept some blame for climate change, not everyone made the decisions that got us into this mess

As Angus makes clear, “Fossil fuels are not an overlay that can be peeled away from capitalism — leaving the system intact, they are embedded in every aspect of the system.” It is common within the climate movement to hear the argument that we are all to blame for climate change. However, it is clear that the decisions to adopt fossil fuels and continue and expand their use were not made by everyone.

Rather the decision was made by those early capitalists at the start of industrialization in Britain as a way to better exploit workers in order to maximize profit.

The point is, we now know the consequences of burning coal, oil and gas.

Of course, those capitalists in the 1830s could not have known they were setting the world on course for catastrophic global warming — although is worth noting that air quality and related issues were subject to much complaint by the working class at the time. But the point is we now know the consequences of burning coal, oil and gas.

We the people are up against massive economic and political obstacles

Yet the irrationality of capitalism dictates the opposite from the action that needs to be taken. This is not a technical problem. Studies show that a full transition to renewable, non-carbon fuels is physically possible. Of course, it would cost money but, as we’ve seen, states have made investments on this scale before, particularly during wartime. But the historic investment in the fossil fuel industries and the colossal vested interests with the power to lobby governments mean that we are up against massive economic and political obstacles.

Given that fossil fuels are completely embedded in capitalism, reason dictates that capitalism must go

If we accept that fossil fuels are completely embedded in capitalism then the conclusion must surely be that we have to get rid of that system. But this is not an argument for us to wait until the revolution to sort out climate change. The problem is immediate. There are battles constantly within capitalism. Sometimes there are struggles explicitly about climate change and the environment, for example over fracking in Britain. The oil and gas companies some years back claimed fracking would be in full production by now. In fact there has only been one frack so far in Britain. Campaigning has made a difference; it has helped stop the further expansion of the fossil fuel landscape.

Our very survival dictates that we must be part of the struggle to get rid of capitalism. There is no alternative.

The sustained protest at Standing Rock in Dakota has seen a victory, at least for now, with the US engineer corps saying it will allow a massive oil pipeline to be routed beneath the Missouri River. But other fights can also show the power to take on those vested interests of the oil and gas companies. The strikes in France over the new work law in 2016 took place in oil refineries and involved blockades of fuel depots. The action led to a petrol shortage and hit power output. The strikes were about the new work law but they showed where power lies to take on the giant fossil fuel multinationals.

In every movement, wider questions are raised about capitalism and where power lies in society to bring about change. As revolutionaries and environmentalists, we should be part of every fight over the issue of the climate — as well as raising the question of climate change in every struggle. The impact of climate change intensifies all struggles bred by capitalism. We have to be part of those struggles, link them together and crucially connect them to the power to get rid of capitalism completely. We have to fight now to stop the further expansion of fossil fuels but we also need to fight to replace a society based on accumulation for profit with one based on production for need.

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