One small aspect of a trip I took to El Paso, Texas, back in the 1970s remains in my mind: the weather. No, not the weather in El Paso, which is more or less the same much of the year, but the weather on the local television news. I remember watching a weatherman begin his report in -- of all places at the time -- the Persian Gulf and sweep swiftly and dramatically across the globe (and its various weather perturbations) before finally reaching El Paso where things were, of course, predictably hot and dull. It might have been my earliest introduction to the charms of the weather to television news, which could be summed up this way: plenty of drama -- storms, floods, droughts, fires, wrecked homes, weeping survivors, shipwrecked people -- and no politics to muck things up. Just Ma Nature, just The Weather!
What was then a strange phenomenon on one city's news has since become the definition of all TV news. At this point who hasn't watched countless weather reporters struggling against the slashing winds and driving rain of some oncoming hurricane while shouting out commentary or heading into the waters of what had only recently been a town or city in the hip waders that are now requisite gear for flood coverage?
Only one problem: climate change threatens to screw up the formula. That phenomenon has complicated weather coverage by inserting human (that is, fossil fuel) politics where only the periodically awesome destructive power of nature and raw human emotion once were. All too often, bad weather may now be traced back, at least in part, to our endless burning of fossil fuels. On the whole, however, onscreen news coverage continues to ignore that reality even as it features the weather ever more prominently. In a sense, the news has been coopting climate change. A small sign of this is the way the tag "extreme weather" has become commonplace as reports of floods ravaging the Southwest, fires the West, and tornadoes the South and the Great Plains proliferate. Extreme weather, in other words, has gained its place in our consciousness largely shorn of the crucial factor in that extremity: the increasing amounts of greenhouse gases humanity has been dumping into the atmosphere.
Case in point: the staggering fire that continues to ravage the tar sands regions of Alberta, Canada, after an uncomfortably hot and dry winter and early spring that left local forests little more than kindling (in a world in which fire seasons are extending and intensifying globally). With the industry that extracts those carbon-heavy tar-sands deposits endangered -- their work camps incinerated, the city of Fort McMurray, which supports their operations, devastated, and tens of thousands of climate refugees created -- you would think that some sense of irony, if nothing else, might have led the onscreen news to focus on climate change this one time.
But no such luck (at least as far as I could tell), even if the extremity of that fire was indeed big news. There were, of course, mainstream exceptions to this -- in print. Among others, perhaps our finest environmental journalist, Elizabeth Kolbert of the New Yorker, weighed in early, as did Justin Gillis of the New York Times with a similarly themed front-page story. Otherwise, to this day, extreme weather remains the great-grandchild of the TV weather reporting I first saw in El Paso four decades ago.
Fortunately, at TomDispatch, Michael Klare continues to follow the world of oil exploitation and the extremity that accompanies it with a keen eye. For the petro-states of our planet, the "weather," it seems, has been undergoing a distinct change for the worse. For them, extremity of an unsettling sort is becoming a way of life. Tom
The Desperate Plight of Petro-States
With a Busted Business Model, Oil Economies Head for the Unknown
By Michael T. Klare
Pity the poor petro-states. Once so wealthy from oil sales that they could finance wars, mega-projects, and domestic social peace simultaneously, some of them are now beset by internal strife or are on the brink of collapse as oil prices remain at ruinously low levels. Unlike other countries, which largely finance their governments through taxation, petro-states rely on their oil and natural gas revenues. Russia, for example, obtains about 50% of government income that way; Nigeria, 60%; and Saudi Arabia, a whopping 90%. When oil was selling at $100 per barrel or above, as was the case until 2014, these countries could finance lavish government projects and social welfare operations, ensuring widespread popular support. Now, with oil below $50 and likely to persist at that level, they find themselves curbing public spending and fending off rising domestic discontent or even incipient revolt.
At the peak of their glory, the petro-states played an outsized role in world affairs. The members of OPEC, the Organization of the Petroleum Exporting Countries, earned an estimated $821 billion from oil exports in 2013 alone. Flush with cash, they were able to exert influence over other countries through a wide variety of aid and patronage operations. Venezuela, for example, sought to counter U.S. influence in Latin America via its Bolivarian Alliance for the Peoples of Our America (ALBA), a cooperative network of mostly leftist governments. Saudi Arabia spread its influence throughout the Islamic world in part by financing the efforts of its ultra-conservative Wahhabi clergy to establish madrassas (religious academies) throughout the Islamic world. Russia, under Vladimir Putin, used its prodigious oil wealth to rebuild and refurbish its military, which had largely disintegrated following the collapse of the Soviet Union. Lesser members of the petro-state club like Angola, Azerbaijan, and Kazakhstan became accustomed to regular fawning visits from the presidents and prime ministers of major oil-importing countries.
That, of course, was then, and this is now. While these countries still matter, what worries these presidents and prime ministers now is the growing likelihood of civil violence or even state collapse. Take, for example, Venezuela, long an ardent foe of U.S. policy in Latin America, but today the potential site of a future bloody civil war between supporters and opponents of the current government. Similar kinds of internal strife and civil disorder are likely in oil-producing states like Algeria and Nigeria, where the potential for the further growth of terrorist violence amid chaos is always high.
Some petro-states like Venezuela and Iraq already appear to be edging up to the brink of collapse. Others like Russia and Saudi Arabia will be forced to reorient their economies if they hope to avoid such future outcomes. Whatever their degree of risk, all of them are already experiencing economic hardship, leaving their leaders under growing pressure to somehow alter course in the bleakest of circumstances -- or face the consequences.
A Busted Business Model- Advertisement -
Petro-states are different from other countries because the fates of their governing institutions are so deeply woven into the boom-and-bust cycles of the international petroleum economy. The challenges they face are only compounded by the unnaturally close ties between their political leaderships and senior officials of their state-owned or state-controlled oil and natural gas industries. Historically, their rulers have placed close allies or even family members in key industry positions, ensuring continuing government control and in many cases personal enrichment as well. In Russia, for example, the management of Gazprom, the state-controlled natural gas company, and Rosneft, the state-owned oil company, is almost indistinguishable from the senior leadership in the Kremlin, with both groups answering to President Putin. A similar pattern holds for Venezuela, where the government keeps the state-owned company, Petróleos de Venezuela, S.A. (PdVSA), on a tight leash, and in Saudi Arabia, where the royal family oversees the operations of the state-owned Saudi Aramco.
In 2016, one thing is finally clear, however: the business model for these corporatized states is busted. The most basic assumption behind their operation -- that global oil demand will continue to outpace world petroleum supplies and ensure high prices into the foreseeable future -- no longer holds. Instead, in what for any petro-state is a nightmarish, upside-down version of that model, supply, not demand, is forging ahead, leaving the market flooded with fossil fuels.
Most analysts, including those at the International Monetary Fund (IMF), now believe that increases in energy efficiency, the spread of affordable alternative energy sources (especially wind and solar), slowing worldwide economic growth, and concern over climate change will continue to put a damper on fossil fuel demand in the years ahead. Meanwhile, the oil industry -- now equipped with fracking technology and other advanced extractive techniques -- will continue to boost supplies. It's a formula for keeping prices low. In fact, a growing number of analysts are convinced that world oil demand will in the not-so-distant future reach a peak and begin a long-term decline, ensuring that large reserves of petroleum will be left in the ground. For the petro-states, all of this means persistent pain unless they can find a new business model that is somehow predicated on a permanent low-oil-price environment.