If there’s a single consistent aspect to Donald Trump’s strategic vision, it’s this: U.S. foreign policy should always be governed by the simple principle of “America First,” with this country’s vital interests placed above those of all others. “We will always put America’s interests first,” he declared in his victory speech in the early hours of November 9th. “From this day forward, it’s going to be only America first, America first,” he insisted in his Inaugural Address on January 20th. Since then, however, everything he’s done in the international arena has, intentionally or not, placed America’s interests behind those of its arch-rivals, China and Russia. So to be accurate, his guiding policy formula should really be relabeled America Third.
Given 19 months of bravado public rhetoric, there was no way to imagine a Trumpian presidency that would favor America’s leading competitors. Throughout the campaign, he castigated China for its “predatory” trade practices, insisting that it had exploited America’s weak enforcement policies to eviscerate our economy and kill millions of jobs. “The money they’ve drained out of the United States has rebuilt China,” he told reporters from the New York Times in no uncertain terms last March. While he expressed admiration for the strong leadership of Russian President Vladimir Putin, he decried that country’s buildup of advanced nuclear weapons. “They have gone wild with their nuclear program,” he stated during the second presidential debate. “Not good!”
Judging by such comments, you might imagine that Donald Trump would have entered the Oval Office with a strategic blueprint for curbing the geopolitical sway of America’s two principal potential great power rivals. Presumably, this would have entailed a radical transformation of the strategy devised by the Obama administration for this purpose — a two-pronged effort that involved the reinforcement of NATO forces in Eastern Europe and the “rebalancing” of U.S. military assets to the Asia-Pacific region. Obama’s strategy also envisioned the use of economic pacts — the Transatlantic Trade and Investment Partnership and the Trans-Pacific Partnership (TPP) — to buttress those military measures. But Trump had made known his disdain for NATO and the TPP, so it was reasonable to assume that he would arrive in Washington with an alternative plan to ensure America’s primacy on the global strategic chessboard.
As President Trump has made clear in recent weeks, however, his primary strategic priorities do not include the advancement of America’s status in the race for global strategic preeminence. Instead, as indicated by the outline of his “America First Foreign Policy” posted on the White House website, his top objectives are the extermination of what he calls “radical Islamic terrorism” and the enhancement of America’s overseas trade balance. Just how vital these objectives may be in the larger scheme of things has been the subject of considerable debate, but few have noted that Trump has completely abandoned any notion that the U.S. is engaged in a global struggle for power and wealth with two potentially fierce competitors, each possessing its own plan for achieving “greatness.”
And it’s not just that Trump seems to have abandoned the larger geopolitical playing field to America’s principal rivals. He appears to be doing everything in his power to facilitate their advance at the expense of the United States. In just the first few weeks of his presidency, he has already taken numerous steps that have put the wind in both China’s and Russia’s sails, while leaving the U.S. adrift.
Trump’s China-First Foreign Policy
In his approach to China, Donald Trump has been almost exclusively focused on the issue of trade, claiming that his primary goal is to combat the unfair practices that have allowed the Chinese to get rich at America’s expense. It’s hardly surprising, then, that his nominee as U.S. trade representative, Robert Lighthizer, is an outspoken critic of that country’s trade behavior. “It seems clear that the U.S. manufacturing crisis is related to our trade with China,” he told Congress in 2010. But while trade may be an important part of the U.S.-China relationship, Trump’s single-minded fixation on the issue leaves aside far more crucial political, economic, diplomatic, and military aspects of the Sino-American competition for world power and influence. By largely ignoring them, in just weeks in the Oval Office, President Trump has already enabled China to gain ground on many fronts.
This was evident in January at the World Economic Forum in Davos, Switzerland. While no senior representative of the soon-to-be installed Trump administration even put in an appearance, China was represented by no less than President Xi Jinping himself, a first appearance for a Chinese head of state. In a major address, denouncing (no names mentioned) those who seek to turn away from globalization, Xi portrayed China as the world’s new exemplar of free trade and internationalism. “Say no to protectionism,” he insisted. “It is like locking yourself in a dark room. Wind and rain are kept out, but so are light and air.” For many of the 1,250 CEOs, celebrities, and government officials in the audience, his appearance and remarks represented an almost mind-boggling shift in the global balance of political influence, as Washington ceded the pivotal position it had long occupied on the world stage.
Six days later, on his first weekday in office, President Trump appeared to confirm the Chinese leader’s derisory comments by announcing his intent to withdraw from negotiations for the Trans-Pacific Partnership, thereby abandoning U.S. leadership in efforts to vastly augment trade in the Asia-Pacific region. From Trump’s perspective, the 12-nation trade deal (which included Australia, Malaysia, Japan, and Vietnam, while carefully excluding China) would harm American workers and manufacturers by facilitating exports to this country by the other participants (a view shared by some on the left). At the same time, however, many in Washington saw it as bolstering American efforts to limit Beijing’s influence by increasing trade among the prospective TPP member states at China’s expense. Now, China has an unparalleled opportunity to reorganize and potentially reorient trade in the Asian region in its direction.
“There’s no doubt that this action will be seen as a huge, huge win for China,” said Michael Froman, the trade representative who negotiated the TPP under President Obama. “For the Trump administration, after all this talk about being tough on China, for their first action to basically hand the keys to China and say we’re withdrawing from our leadership position in this region is geo-strategically damaging.”
Among other things, China is expected to encourage Asian countries to join it in an alternative trade arrangement, the Regional Comprehensive Economic Partnership (RCEP). Including the 10 members of the Association of Southeast Asian Nations (ASEAN) as well as China, Japan, South Korea, Australia, New Zealand, and India (but not the United States), the RCEP aims to lower barriers to trade — without the environmental and labor-rights provisions incorporated into the TPP.
On January 28th, in a phone conversation that ended abruptly, President Trump further undermined America’s geopolitical stature in Asia by berating Prime Minister Malcolm Turnbull of Australia, a country that has been a staunch American ally since World War II and which houses several U.S. military bases. According to press accounts, Trump responded angrily to Turnbull’s plea to honor a promise made by President Obama to take in some 1,250 refugees — many from Iraq — being held by Australia in squalid conditions in offshore detention centers. “I don’t want these people,” Trump is said to have shouted before hanging up on the Australian leader. The insulting tenor of the call has provoked widespread revulsion in Australia, with many people there reportedly questioning the value of that country’s close association with the United States.
Above all, his rebuff of Turnbull is thought to be beneficial to China. “Trump is needlessly damaging the deep trust that binds one of America’s closest alliances,” said Professor Rory Medcalf, head of the National Security College at the Australian National University in Canberra. “China and those wishing to weaken the strongest alliance in the Pacific will see opportunity in this moment.”
Trump, China, and the Global Climate Fight
Perhaps the greatest gift Trump has bestowed on China, however, has been his drive to scuttle the Obama administration’s clean energy initiatives and its commitment to the Paris climate agreement. By turning the clock back on climate action and putting in office a crew of climate-change deniers, Trump has opened the door for China to emerge both as the world’s leader in green technology (while creating millions of new jobs for Chinese workers) and in international efforts to slow global warming.
Recall that in pursuing progress on clean energy, President Obama was driven not only by a concern for the future depredations of climate change, but also by a desire to ensure American preeminence in what he perceived as a global race to master the green technologies of the future, a race in which China was feared to be a likely winner. In 2013, he pointed out that, until recently, other countries had “dominated the clean energy market and the jobs that came with it, [but] we’ve begun to change that… As long as countries like China keep going all-in on clean energy, so must we.”
To assure American primacy in the clean-energy race, Obama channeled vast sums of money into the development and deployment of renewable technologies, including advanced solar power plants and electrical storage devices. He also assumed a leadership role in the diplomatic drive to gain approval of the Paris accord, meeting personally with Xi Jinping and with Prime Minister Narendra Modi of India, among others. From an international perspective, this lent the United States the aura of an enlightened, forward-looking world power.
Donald Trump aims to turn his back on all of this. More interested in pleasing his friends in the fossil fuel industry than saving the planet from ruin, he has repeatedly expressed his resolve to eviscerate Obama’s clean energy plan and withdraw from the Paris agreement. “The U.S. will clearly change its course on climate policy,” said Myron Ebell, the climate-change denier who headed Trump’s Environmental Protection Agency (EPA) transition team. “Trump has made it clear he will withdraw from the Paris Agreement. He could do it by executive order… or he could do it as part of a larger package,” Ebell told reporters on January 30th.
Whether or not Trump and his prospective EPA director, former Oklahoma Attorney General Scott Pruitt, succeed in unraveling everything that Obama achieved, the new administration has already ceded leadership in the global climate fight to the Chinese, who have been all too happy to seize the limelight. In January, Beijing’s chief climate change negotiator, Xie Zhenhua, affirmed his country’s intention to be out front on climate issues. “China is capable of taking a leadership role in combating global climate change,” he told reporters from China Daily.
While gaining international recognition as the new leader in this area, China is also moving swiftly to assume primacy in the development and deployment of new green technologies, assuring future domination of a global market expected to grow by leaps and bounds in the decades to come. On January 5th, the country’s National Energy Administration announced a plan to spend $360 billion on renewable energy systems between 2016 and 2020. This is expected to create perhaps 13 million new jobs. Although detailed spending plans were not disclosed, much of this largesse will undoubtedly be devoted to new wind and solar installations — fields in which China already enjoys a substantial advantage over the rest of the world.
From an economic perspective, the implications of this drive are hard to miss. Many energy experts believe that the demand for oil and other fossil fuels will begin to decline in the years ahead as consumers increasingly favor clean energy over carbon-emitting fuels. If so, the demand for renewables will skyrocket. According to the latest projections from the International Energy Agency in Paris, the demand for wind power in electricity generation will grow by 440% between 2014 and 2040, and that for solar power by over 1,100%. Given the world’s colossal thirst for energy, growth on this scale is bound to generate trillions of dollars in new business. In other words, the anti-green posture of the Trump administration offers the gift of the century to China: an extraordinary shift in global wealth.
Trump’s Russia-Second Foreign Policy
If President Trump appears determined to make China the world’s leading power, he also seems strangely intent on elevating Russia to the number two spot. In his single-minded drive to enlist Moscow’s help in fighting ISIS, he appears willing to eliminate any barriers to Russian President Vladimir Putin’s undisguised campaign to establish a sphere of influence in the territory of the former Soviet Union and other areas once under Moscow’s sway.
Ever since assuming the presidency in 2000, Vladimir Putin has made no secret of his determination to restore Russia’s former glory and to reverse what he and like-minded Russian analysts view as NATO’s encroachment on Russia’s legitimate security zone in eastern and southeastern Europe. This led to the 2014 Russian annexation of Crimea and the barely-disguised Russian intervention in eastern Ukraine. For the Baltic states — Estonia, Latvia, and Lithuania — and other Eastern European countries once under Moscow’s thumb, this has, in turn, rekindled fears of a new Russian drive to subvert their independence. More recently, Putin has sought to reestablish the former Soviet Union’s ties to the Middle East, most notably through his military intervention in Syria.
In conjunction with America’s NATO allies, President Obama sought to curb Putin’s plans by imposing tough economic sanctions on Russia and by bolstering the defenses of NATO’s front-line states. Last July, at a NATO summit in Warsaw, he and the leaders of Britain, Canada, and Germany agreed to deploy reinforced battalions to Poland and the three Baltic states as a deterrent to any future Russian attack on those countries. Had she been elected president, Hillary Clinton was expected to step up the pressure further on Moscow.
For Trump, however, Putin’s transgressions in Europe and elsewhere seem to be of little consequence in comparison to his possible collaboration in fighting the Islamic State. “I think it would be great if we got along with Russia because we could fight ISIS together,” he declared during the second presidential debate last October. As for NATO and the Europeans, Trump has indicated little sympathy for their worries about Moscow and has shown little inclination to increase America’s contributions to their defense. Not only did he claim that NATO was “obsolete” last March, insisting that it wasn’t doing enough to fight terrorism, but that it was “unfair, economically, to us,” because “it really helps them more so than the United States, and we pay a disproportionate share.”
Since assuming the presidency, President Trump has behaved as if Russia were indeed a key ally-in-waiting and the NATO powers were former lovers who had lost their appeal. Yes, he met with British Prime Minister Theresa May before any other foreign leader, but he remained silent when she spoke of the need to maintain pressure on Moscow through sanctions, making her look at that moment like an unwelcome houseguest.
Later, he spoke at length with Putin by telephone. From published accounts of their conversation, they avoided awkward topics like Crimea and the Russian hacking scandal of the election past, discussing instead increased collaboration in counterterrorism operations. While the Trump team had little to report on the specifics of what was said, Russian officials were effusive about the conversation. “The two leaders emphasized that joining efforts in fighting the main threat — international terrorism — is a top priority,” they indicated.
According to the Russian media, Trump and Putin agreed in their January 28th phone call to arrange high-level meetings among their senior security staff to facilitate collaboration in the anti-ISIS war. Included in many of these reports was speculation that the two leaders were moving towards a “conceptual understanding” whereby Washington would grant Moscow a “zone of influence” in the former Soviet space in return for Russian cooperation in battling ISIS. Whether or not Trump agreed to any such plan, it appears that events are beginning to proceed as if he had, with Russia evidently playing a more aggressive role in eastern Ukraine in recent weeks.
In this way, Trump’s embrace of Russia as a legitimate partner in anti-ISIS operations has given Putin what he seeks more than anything else: recognition as an equal player on the world stage with the United States and China — despite the fact that he presides over a rickety petro-state with a weakened economy the size of Italy’s.
Choosing Number Three
For all his talk of placing America’s interests first, Donald Trump appears to be advancing the interests of China and Russia, not as the result of conscious policy, but because he’s driven by such a narrow view of America’s foreign policy priorities: counterterrorism against Islamic radicalism, the exclusion of Mexicans and Muslims from the U.S., and an improved balance of trade. The broader dimensions of international relations do not seem to register on his mental radar screen, such as it is.
How does this affect us? The biggest danger: that China and Russia will feel emboldened by Trump’s narrow-minded approach to seek geopolitical advantage in some area like the South China Sea or the Baltic Sea region that is either important to the United States or seen as bearing on its prestige and credibility. In that case, the president, feeling personally threatened or affronted on the issue of America’s presumed paramountcy, might respond forcefully, possibly igniting a major crisis with nuclear implications. Even if such a crisis is avoided, it’s likely that American influence in such areas as Eastern Europe and South Asia will diminish, resulting in fewer trade opportunities and possibly a rollback of rights and liberties (which could, of course, happen in the U.S. as well). Certainly, if his first weeks in office are indicative of what a Trumpian vision of an America First policy means, we are entering a period when the phrase “multipolar world” will gain new meaning.
Most important of all, the abandonment of U.S. leadership in the struggle to slow global warming will mean both the surrender of technological preeminence in the fields most likely to dominate the world economy in the decades to come and a far greater chance of planetary catastrophe. This should be considered a betrayal of all Americans — and especially of those who voted for him in the belief that he would ensure America’s political and economic primacy.
Within months of taking office, President Donald Trump is likely to face one or more major international crises, possibly entailing a risk of nuclear escalation. Not since the end of the Cold War has a new chief executive been confronted with as many potential flashpoints involving such a risk of explosive conflict. This proliferation of crises has been brewing for some time, but the situation appears especially ominous now given Trump’s pledge to bring American military force swiftly to bear on any threats of foreign transgression. With so much at risk, it’s none too soon to go on a permanent escalation watch, monitoring the major global hotspots for any sign of imminent flare-ups, hoping that early warnings (and the outcry that goes with them) might help avert catastrophe.
Looking at the world today, four areas appear to pose an especially high risk of sudden crisis and conflict: North Korea, the South China Sea, the Baltic Sea region, and the Middle East. Each of them has been the past site of recurring clashes, and all are primed to explode early in the Trump presidency.
Why are we seeing so many potential crises now? Is this period really different from earlier presidential transitions?
It’s true that the changeover from one presidential administration to another can be a time of global uncertainty, given America’s pivotal importance in world affairs and the natural inclination of rival powers to test the mettle of the country’s new leader. There are, however, other factors that make this moment particularly worrisome, including the changing nature of the world order, the personalities of its key leaders, and an ominous shift in military doctrine.
Just as the United States is going through a major political transition, so is the planet at large. The sole-superpower system of the post-Cold War era is finally giving way to a multipolar, if not increasingly fragmented, world in which the United States must share the limelight with other major actors, including China, Russia, India, and Iran. Political scientists remind us that transitional periods can often prove disruptive, as “status quo” powers (in this case, the United States) resist challenges to their dominance from “revisionist” states seeking to alter the global power equation. Typically, this can entail proxy wars and other kinds of sparring over contested areas, as has recently been the case in Syria, the Baltic, and the South China Sea.
This is where the personalities of key leaders enter the equation. Though President Obama oversaw constant warfare, he was temperamentally disinclined to respond with force to every overseas crisis and provocation, fearing involvement in yet more foreign wars like Iraq and Afghanistan. His critics, including Donald Trump, complained bitterly that this stance only encouraged foreign adversaries to up their game, convinced that the U.S. had lost its will to resist provocation. In a Trump administration, as The Donald indicated on the campaign trail last year, America’s adversaries should expect far tougher responses. Asked in September, for instance, about an incident in the Persian Gulf in which Iranian gunboats approached American warships in a threatening manner, he typically told reporters, “When they circle our beautiful destroyers with their little boats and make gestures that… they shouldn’t be allowed to make, they will be shot out of the water.”
Although with Russia, unlike Iran, Trump has promised to improve relations, there’s no escaping the fact that Vladimir Putin’s urge to restore some of his country’s long-lost superpower glory could lead to confrontations with NATO powers that would put the new American president in a distinctly awkward position. Regarding Asia, Trump has often spoken of his intent to punish China for what he considers its predatory trade practices, a stance guaranteed to clash with President Xi Jinping’s goal of restoring his country’s greatness. This should, in turn, generate additional possibilities for confrontation, especially in the contested South China Sea. Both Putin and Xi, moreover, are facing economic difficulties at home and view foreign adventurism as a way of distracting public attention from disappointing domestic performances.
These factors alone would ensure that this was a moment of potential international crisis, but something else gives it a truly dangerous edge: a growing strategic reliance in Russia and elsewhere on the early use of nuclear weapons to overcome deficiencies in “conventional” firepower.
For the United States, with its overwhelming superiority in such firepower, nuclear weapons have lost all conceivable use except as a “deterrent” against a highly unlikely first-strike attack by an enemy power. For Russia, however, lacking the means to compete on equal terms with the West in conventional weaponry, this no longer seems reasonable. So Russian strategists, feeling threatened by the way NATO has moved ever closer to its borders, are now calling for the early use of “tactical” nuclear munitions to overpower stronger enemy forces. Under Russia’s latest military doctrine, major combat units are now to be trained and equipped to employ such weapons at the first sign of impending defeat, either to blackmail enemy countries into submission or annihilate them.
Following this doctrine, Russia has developed the nuclear-capable Iskander ballistic missile (a successor to the infamous “Scud” missile used by Saddam Hussein in attacks on Iran, Israel, and Saudi Arabia) and forward deployed it to Kaliningrad, a small sliver of Russian territory sandwiched between Poland and Lithuania. In response, NATO strategists are discussing ways to more forcefully demonstrate the West’s own capacity to use tactical nuclear arms in Europe, for example by including more nuclear-capable bombers in future NATO exercises. As a result, the “firebreak” between conventional and nuclear warfare — that theoretical barrier to escalation — seems to be narrowing, and you have a situation in which every crisis involving a nuclear state may potentially prove to be a nuclear crisis.
With that in mind, consider the four most dangerous potential flashpoints for the new Trump administration.
North Korea’s stepped-up development of nuclear weapons and long-range ballistic missiles may present the Trump administration with its first great international challenge. In recent years, the North Koreans appear to have made substantial progress in producing such missiles and designing small nuclear warheads to fit on them. In 2016, the country conducted two underground nuclear tests (its fourth and fifth since 2006), along with numerous tests of various missile systems. On September 20th, it also tested a powerful rocket engine that some observers believe could be used as the first stage of an intercontinental ballistic missile (ICBM) that might someday be capable of delivering a nuclear warhead to the western United States.
North Korea’s erratic leader, Kim Jong-un, has repeatedly spoken of his determination to acquire nuclear weapons and the ability to use them in attacks on his adversaries, including the U.S. Following a series of missile tests last spring, he insisted that his country should continue to bolster its nuclear force “both in quality and quantity,” stressing “the need to get the nuclear warheads deployed for national defense always on standby so as to be fired at any moment.” This could mean, he added, using these weapons “in a preemptive attack.” On January 1st, Kim reiterated his commitment to future preemptive nuclear action, adding that his country would soon test-fire an ICBM.
President Obama responded by imposing increasingly tough economic sanctions and attempting — with only limited success — to persuade China, Pyongyang’s crucial ally, to use its political and economic clout to usher Kim into nuclear disarmament talks. None of this seemed to make the slightest difference, which means President Trump will be faced with an increasingly well-armed North Korea that may be capable of fielding usable ICBMs within the coming years.
How will Trump respond to this peril? Three options seem available to him: somehow persuade China to compel Pyongyang to abandon its nuclear quest; negotiate a disarmament deal directly with Kim, possibly even on a face-to-face basis; or engage in (presumably nonnuclear) preemptive strikes aimed at destroying the North’s nuclear and missile-production capabilities.
Imposing yet more sanctions and talking with China would look suspiciously like the Obama approach, while obtaining China’s cooperation would undoubtedly mean compromising on trade or the South China Sea (either of which would undoubtedly involve humiliating concessions for a man like Trump). Even were he to recruit Chinese President Xi as a helpmate, it’s unclear that Pyongyang would be deterred. As for direct talks with Kim, Trump, unlike every previous president, has already indicated that he’s willing. “I would have no problem speaking to him,” he told Reuters last May. But what exactly would he offer the North in return for its nuclear arsenal? The withdrawal of U.S. forces from South Korea? Any such solution would leave the president looking like a patsy (inconceivable for someone whose key slogan has been “Make America Great Again”).
That leaves a preemptive strike. Trump appears to have implicitly countenanced that option, too, in a recent tweet. (“North Korea just stated that it is in the final stages of developing a nuclear weapon capable of reaching parts of the U.S. It won’t happen!”) In other words, he is open to the military option, rejected in the past because of the high risk of triggering an unpredictable response from the North, including a cataclysmic invasion of South Korea (and potential attacks on U.S. troops stationed there). Under the circumstances, the unpredictability not just of Kim Jong-un but also of Donald Trump leaves North Korea in the highest alert category of global crises as the new era begins.
The South China Sea
The next most dangerous flashpoint? The ongoing dispute over control of the South China Sea, an area bounded by China, Vietnam, the Philippines, and the island of Borneo. Citing ancient ties to islands in those waters, China now claims the entire region as part of its national maritime territory. Some of the same islands are, however, also claimed by Brunei, Malaysia, Vietnam, and the Philippines. Although not claiming any territory in the region itself, the U.S. has a defense treaty with the Philippines, relies on free passage through the area to move its warships from bases in the Pacific to war zones in the Middle East, and of course considers itself the preeminent Pacific power and plans to keep it that way.
In the past, China has clashed with local powers over possession of individual islands, but more recently has sought control over all of them. As part of that process, it has begun to convert low-lying islets and atolls under its control into military bases, equipping them with airstrips and missile defense systems. This has sparked protests from Vietnam and the Philippines, which claim some of those islets, and from the United States, which insists that such Chinese moves infringe on its Navy’s “freedom of navigation” through international waters.
President Obama responded to provocative Chinese moves in the South China Sea by ordering U.S. warships to patrol in close proximity to the islands being militarized. For Trump, this has been far too minimal a response. “China’s toying with us,” he told David Sanger of the New York Times last March. “They are when they’re building in the South China Sea. They should not be doing that but they have no respect for our country and they have no respect for our president.” Asked if he was prepared to use military force in response to the Chinese buildup, he responded, “Maybe.”
The South China Sea may prove to be an early test of Trump’s promise to fight what he views as China’s predatory trade behavior and Beijing’s determination to resist bullying by Washington. Last month, Chinese sailors seized an American underwater surveillance drone near one of their atolls. Many observers interpreted the move as a response to Trump’s decision to take a phone call of congratulations from the president of Taiwan, Tsai Ing-wen, shortly after his election victory. That gesture, unique in recent American presidencies, was viewed in Beijing, which considers Taiwan a renegade province, as an insult to China. Any further moves by Trump to aggravate or punish China on the economic front could result in further provocations in the South China Sea, opening the possibility of a clash with U.S. air and naval forces in the region.
All this is worrisome enough, but the prospects for a clash in the South China Sea increased significantly on January 11th, thanks to comments made by Rex Tillerson, the former CEO of ExxonMobil and presumptive secretary of state, during his confirmation hearing in Washington. Testifying before the Senate Foreign Relations Committee, he said, “We’re going to have to send China a clear signal that, first, the island-building stops and, second, your access to those islands also is not going to be allowed.” Since the Chinese are unlikely to abandon those islands — which they consider part of their sovereign territory — just because Trump and Tillerson order them to do so, the only kind of “signal” that might carry any weight would be military action.
What form would such a confrontation take and where might it lead? At this point, no one can be sure, but once such a conflict began, room for maneuver could prove limited indeed. A U.S. effort to deny China access to the islands could involve anything from a naval blockade to air and missile attacks on the military installations built there to the sinking of Chinese warships. It’s hard to imagine that Beijing would refrain from taking retaliatory steps in response, and as one move tumbled onto the next, the two nuclear-armed countries might suddenly find themselves at the brink of full-scale war. So consider this our second global high alert.
The Baltic Sea Area
If Hillary Clinton had been elected, I would have placed the region adjoining the Baltic Sea at the top of my list of potential flashpoints, as it’s where Vladimir Putin would have been most likely to channel his hostility to her in particular and the West more generally. That’s because NATO forces have moved most deeply into the territory of the former Soviet Union in the Baltic states of Latvia, Estonia, and Lithuania. Those countries are also believed to be especially vulnerable to the kind of “hybrid” warfare — involving covert operations, disinformation campaigns, cyberattacks, and the like — that Russia perfected in Crimea and Ukraine. With Donald Trump promising to improve relations with Moscow, it’s now far less likely that Putin would launch such attacks, though the Russians continue to strengthen their military assets (including their nuclear war-fighting capabilities) in the region, and so the risk of a future clash cannot be ruled out.
The danger there arises from geography, history, and policy. The three Baltic republics only became independent after the breakup of the USSR in 1991; today, they are members of both the European Union and NATO. Two of them, Estonia and Latvia, share borders with Russia proper, while Lithuania and nearby Poland surround the Russian enclave of Kaliningrad. Through their NATO membership, they provide a theoretical bridgehead for a hypothetical Western invasion of Russia. By the same token, the meager forces of the three republics could easily be overwhelmed by superior Russian ones, leaving the rest of NATO to decide whether and in what fashion to confront a Russian assault on member nations.
Following Russia’s intervention in eastern Ukraine, which demonstrated both Moscow’s willingness and ability to engage in hybrid warfare against a neighboring European state, the NATO powers decided to bolster the alliance’s forward presence in the Baltic region. At a summit meeting in Warsaw in June 2016, the alliance agreed to deploy four reinforced multinational battalions in Poland and the three Baltic republics. Russia views this with alarm as a dangerous violation of promises made to Moscow in the wake of the Cold War that no NATO forces would be permanently garrisoned on the territory of the former Soviet Union. NATO has tried to deflect Russian complaints by insisting that, since the four battalions will be rotated in and out of the region, they are somehow not “permanent.” Nevertheless, from Moscow’s perspective, the NATO move represents a serious threat to Russian security and so justifies a comparable buildup of Russian forces in adjacent areas.
Adding to the obvious dangers of such a mutual build-up, NATO and Russian forces have been conducting military “exercises,” often in close proximity to each other. Last summer, for example, NATO oversaw Anaconda 2016 in Poland and Lithuania, the largest such maneuvers in the region since the end of the Cold War. As part of the exercise, NATO forces crossed from Poland to Lithuania, making clear their ability to encircle Kaliningrad, which was bound to cause deep unease in Moscow. Not that the Russians have been passive. During related NATO naval exercises in the Baltic Sea, Russian planes flew within a few feet of an American warship, the USS Donald Cook, nearly provoking a shooting incident that could have triggered a far more dangerous confrontation.
Will Putin ease up on the pressure he’s been exerting on the Baltic states once Trump is in power? Will Trump agree to cancel or downsize the U.S. and NATO deployments there in return for Russian acquiescence on other issues? Such questions will be on the minds of many in Eastern Europe in the coming months. It’s reasonable to predict a period of relative calm as Putin tests Trump’s willingness to forge a new relationship with Moscow, but the underlying stresses will remain as long as the Baltic states stay in NATO and Russia views that as a threat to its security. So chalk the region up as high alert three on a global scale.
The Middle East
The Middle East has long been a major flashpoint. President Obama, for instance, came to office hoping to end U.S. involvement in wars in Iraq and Afghanistan, yet U.S. troops are still fighting in both countries today. The question is: How might this picture change in the months ahead?
Given the convoluted history of the region and its demonstrated capacity for surprise, any predictions should be offered with caution. Trump has promised to intensify the war against ISIS, which will undoubtedly require the deployment of additional American air, sea, and ground forces in the region. As he put it during the election campaign, speaking of the Islamic State, “I would bomb the shit out of them.” So expect accelerated air strikes on ISIS-held locations, leading to more civilian casualties, desperate migrants, and heightened clashes between Shiites and Sunnis. As ISIS loses control of physical territory and returns to guerilla-style warfare, it will surely respond by increasing terrorist attacks on “soft” civilian targets in neighboring Iraq, Jordan, and Turkey, as well as in more distant locations. No one knows how all this will play out, but don’t be surprised if terrorist violence only increases and Washington once again finds itself drawn more deeply into an endless quagmire in the Greater Middle East and northern Africa.
The overriding question, of course, is how Donald Trump will behave toward Iran. He has repeatedly affirmed his opposition to the nuclear deal signed by the United States, the European Union, Russia, and China and insisted that he would either scrap it or renegotiate it, but it’s hard to imagine how that might come to pass. All of the other signatories are satisfied with the deal and seek to do business with Iran, so any new negotiations would have to proceed without those parties. As many U.S. strategists also see merit in the agreement, since it deprives Iran of a nuclear option for at least a decade or more, a decisive shift on the nuclear deal appears unlikely.
On the other hand, Trump could be pressured by his close associates — especially his pick for national security advisor, retired Lieutenant General Michael Flynn, a notoriously outspoken Iranophobe — to counter the Iranians on other fronts. This could take a variety of forms, including stepped-up sanctions, increased aid to Saudi Arabia in its war against the Iranian-backed Houthis in Yemen, or attacks on Iranian proxies in the Middle East. Any of these would no doubt prompt countermoves by Tehran, and from there a cycle of escalation could lead in numerous directions, all dangerous, including military action by the U.S., Israel, or Saudi Arabia. So mark this one as flash point four and take a deep breath.
Going on Watch
Starting on January 20th, as Donald Trump takes office, the clock will already be ticking in each of these flashpoint regions. No one knows which will be the first to erupt, or what will happen when it does, but don’t count on our escaping at least one, and possibly more, major international crises in the not-too-distant future.
Given the stakes involved, it’s essential to keep a close watch on all of them for signs of anything that might trigger a major conflagration and for indications of a prematurely violent Trumpian response (the moment to raise a hue and cry). Keeping the spotlight shining on these four potential flashpoints may not be much, but it’s the least we can do to avert Armageddon.
Scroll through Donald Trump’s campaign promises or listen to his speeches and you could easily conclude that his energy policy consists of little more than a wish list drawn up by the major fossil fuel companies: lift environmental restrictions on oil and natural gas extraction, build the Keystone XL and Dakota Access pipelines, open more federal lands to drilling, withdraw from the Paris climate agreement, kill Obama’s Clean Power Plan, revive the coal mining industry, and so on and so forth ad infinitum. In fact, many of his proposals have simply been lifted straight from the talking points of top energy industry officials and their lavishly financed allies in Congress.
If, however, you take a closer look at this morass of pro-carbon proposals, an obvious, if as yet unnoted, contradiction quickly becomes apparent. Were all Trump’s policies to be enacted — and the appointment of the climate-change denier and industry-friendly attorney general of Oklahoma, Scott Pruitt, to head the Environmental Protection Agency (EPA) suggests the attempt will be made — not all segments of the energy industry will flourish. Instead, many fossil fuel companies will be annihilated, thanks to the rock-bottom fuel prices produced by a colossal oversupply of oil, coal, and natural gas.
Indeed, stop thinking of Trump’s energy policy as primarily aimed at helping the fossil fuel companies (although some will surely benefit). Think of it instead as a nostalgic compulsion aimed at restoring a long-vanished America in which coal plants, steel mills, and gas-guzzling automobiles were the designated indicators of progress, while concern over pollution — let alone climate change — was yet to be an issue.
If you want confirmation that such a devastating version of nostalgia makes up the heart and soul of Trump’s energy agenda, don’t focus on his specific proposals or any particular combination of them. Look instead at his choice of ExxonMobil CEO Rex Tillerson as his secretary of state and former Governor Rick Perry from oil-soaked Texas as his secretary of energy, not to mention the carbon-embracing fervor that ran through his campaign statements and positions. According to his election campaign website, his top priority will be to “unleash America’s $50 trillion in untapped shale, oil, and natural gas reserves, plus hundreds of years in clean coal reserves.” In doing so, it affirmed, Trump would “open onshore and offshore leasing on federal lands, eliminate [the] moratorium on coal leasing, and open shale energy deposits.” In the process, any rule or regulation that stands in the way of exploiting these reserves will be obliterated.
If all of Trump’s proposals are enacted, U.S. greenhouse gas (GHG) emissions will soar, wiping out the declines of recent years and significantly increasing the pace of global warming. Given that other major GHG emitters, especially India and China, will feel less obliged to abide by their Paris commitments if the U.S. heads down that path, it’s almost certain that atmospheric warming will soar beyond the 2 degree Celsius rise over pre-industrial levels that scientists consider the maximum the planet can absorb without suffering catastrophic repercussions. And if, as promised, Trump also repeals a whole raft of environmental regulations and essentially dismantles the Environmental Protection Agency, much of the progress made over recent years in improving our air and water quality will simply be wiped away, and the skies over our cities and suburbs will once again turn gray with smog and toxic pollutants of all sorts.
Eliminating All Constraints on Carbon Extraction
To fully appreciate the dark, essentially delusional nature of Trump’s energy nostalgia, let’s start by reviewing his proposals. Aside from assorted tweets and one-liners, two speeches before energy groups represent the most elaborate expression of his views: the first was given on May 26th at the Williston Basin Petroleum Conference in Bismarck, North Dakota, to groups largely focused on extracting oil from shale through hydraulic fracturing (“fracking”) in the Bakken shale oil formation; the second on September 22nd addressed the Marcellus Shale Coalition in Pittsburgh, a group of Pennsylvania gas frackers.
At both events, Trump’s comments were designed to curry favor with this segment of the industry by promising the repeal of any regulations that stood in the way of accelerated drilling. But that was just a start for the then-candidate. He went on to lay out an “America-first energy plan” designed to eliminate virtually every impediment to the exploitation of oil, gas, and coal anywhere in the country or in its surrounding waters, ensuring America’s abiding status as the world’s leading producer of fossil fuels.
Much of this, Trump promised in Bismarck, would be set in motion in the first 100 days of his presidency. Among other steps, he pledged to:
* Cancel America’s commitment to the Paris Climate Agreement and stop all payments of U.S. tax dollars to U.N. global warming programs
* Lift any existing moratoriums on energy production in federal areas
* Ask TransCanada to renew its permit application to build the Keystone Pipeline
* Revoke policies that impose unwarranted restrictions on new drilling technologies
* Save the coal industry
The specifics of how all this might happen were not provided either by the candidate or, later, by his transition team. Nevertheless, the main thrust of his approach couldn’t be clearer: abolish all regulations and presidential directives that stand in the way of unrestrained fossil fuel extraction, including commitments made by President Obama in December 2015 under the Paris Climate Agreement. These would include, in particular, the EPA’s Clean Power Plan, with its promise to substantially reduce greenhouse gas emissions from coal-fired plants, along with mandated improvements in automotive fuel efficiency standards, requiring major manufacturers to achieve an average of 54.5 miles per gallon in all new cars by 2025. As these constitute the heart of America’s “intended nationally determined contributions” to the 2015 accord, they will undoubtedly be early targets for a Trump presidency and will represent a functional withdrawal from the Paris Agreement, even if an actual withdrawal isn’t instantly possible.
Just how quickly Trump will move on such promises, and with what degree of success, cannot be foreseen. However, because so many of the measures adopted by the Obama administration to address climate change were enacted as presidential directives or rules promulgated by the EPA — a strategy adopted to circumvent opposition from climate skeptics in the Republican-controlled House and Senate — Trump will be in a position to impose a number of his own priorities simply by issuing new executive orders nullifying Obama’s. Some of his goals will, however, be far harder to achieve. In particular, it will prove difficult indeed to “save” the coal industry if America’s electrical utilities retain their preference for cheap natural gas.
Ignoring Market Realities
This last point speaks to a major contradiction in the Trump energy plan. Seeking to boost the extraction of every carbon-based energy source inevitably spells doom for segments of the industry incapable of competing in the low-price environment of a supply-dominated Trumpian energy marketplace.
Take the competition between coal and natural gas in powering America’s electrical plants. As a result of the widespread deployment of fracking technology in the nation’s prolific shale fields, the U.S. gas output has skyrocketed in recent years, jumping from 18.1 trillion cubic feet in 2005 to 27.1 trillion in 2015. With so much additional gas on the market, prices have naturally declined — a boon for the electrical utility companies, which have converted many of their plants from coal to gas-combustion in order to benefit from the low prices. More than anything else, this is responsible for the decline of coal use, with total consumption dropping by 10% in 2015 alone.
In his speech to the Marcellus Coalition, Trump promised to facilitate the expanded output of both fuels. In particular, he pledged to eliminate federal regulations that, he claimed, “remain a major restriction to shale production.” (Presumably, this was a reference to Obama administration measures aimed at reducing the excessive leakage of methane, a major greenhouse gas, from fracking operations on federal lands.) At the same time, he vowed to “end the war on coal and the war on miners.”
As Trump imagines the situation, that “war on coal” is a White House-orchestrated drive to suppress its production and consumption through excessive regulation, especially the Clean Power Plan. But while that plan, if ever fully put into operation, would result in the accelerated decommissioning of existing coal plants, the real war against coal is being conducted by the very frackers Trump seeks to unleash. By encouraging the unrestrained production of natural gas, he will ensure continued low gas prices and so a depressed market for coal.
A similar contradiction lies at the heart of Trump’s approach to oil: rather than seeking to bolster core segments of the industry, he favors a supersaturated market approach that will end up hurting many domestic producers. Right now, in fact, the single biggest impediment to oil company growth and profitability is the low price environment brought on by a global glut of crude — itself largely a consequence of the explosion of shale oil production in the United States. With more petroleum entering the market all the time and insufficient world demand to soak it up, prices have remained at depressed levels for more than two years, severely affecting fracking operations as well. Many U.S. frackers, including some in the Bakken formation, have found themselves forced to suspend operations or declare bankruptcy because each new barrel of fracked oil costs more to produce than it can be sold for.
Trump’s approach to this predicament — pump out as much oil as possible here and in Canada — is potentially disastrous, even in energy industry terms. He has, for instance, threatened to open up yet more federal lands, onshore and off, for yet more oil drilling, including presumably areas previously protected on environmental grounds like the Arctic National Wildlife Refuge and the seabeds off the Atlantic and Pacific coasts. In addition, the construction of pipelines like the embattled one in North Dakota and other infrastructure needed to bring these added resources to market will clearly be approved and facilitated.
In theory, this drown-us-in-oil approach should help achieve a much-trumpeted energy “independence” for the United States, but under the circumstances, it will surely prove a calamity of the first order. And such a fantasy version of a future energy market will only grow yet more tumultuous thanks to Trump’s urge to help ensure the survival of that particularly carbon-dirty form of oil production, Canada’s tar sands industry.
Not surprisingly, that industry, too, is under enormous pressure from low oil prices, as tar sands are far more costly to produce than conventional oil. At the moment, adequate pipeline capacity is also lacking for the delivery of their thick, carbon-heavy crude to refineries on the American Gulf Coast where they can be processed into gasoline and other commercial products. So here’s yet one more Trumpian irony to come: by favoring construction of the Keystone XL pipeline, Trump would throw yet another monkey wrench into his own planning. Sending such a life preserver to the Canadian industry — allowing it to better compete with American crude — would be another strike against his own “America-first energy plan.”
Seeking the Underlying Rationale
In other words, Trump’s plan will undoubtedly prove to be an enigma wrapped in a conundrum inside a roiling set of contradictions. Although it appears to offer boom times for every segment of the fossil fuel industry, only carbon as a whole will benefit, while many individual companies and sectors of the market will suffer. What could possibly be the motivation for such a bizarre and planet-enflaming outcome?
To some degree, no doubt, it comes, at least in part, from the president-elect’s deep and abiding nostalgia for the fast-growing (and largely regulation-free) America of the 1950s. When Trump was growing up, the United States was on an extraordinary expansionist drive and its output of basic goods, including oil, coal, and steel, was swelling by the day. The country’s major industries were heavily unionized; the suburbs were booming; apartment buildings were going up all over the borough of Queens in New York City where Trump got his start; cars were rolling off the assembly lines in what was then anything but the “Rust Belt”; and refineries and coal plants were pouring out the massive amounts of energy needed to make it all happen.
Having grown up in the Bronx, just across Long Island Sound from Trump’s home borough, I can still remember the New York of that era: giant smokestacks belching out thick smoke on every horizon and highways jammed with cars adding to the miasma, but also to that sense of explosive growth. Builders and automobile manufacturers didn’t have to seriously worry about regulations back then, and certainly not about environmental ones, which made life — for them — so much simpler.
It’s that carbon-drenched era to which Trump dreams of returning, even if it’s already clear enough that the only conceivable kind of dream that can ever come from his set of policies will be a nightmare of the first order, with temperatures exceeding all records, coastal cities regularly under water, our forests in flame and our farmlands turned to dust.
And don’t forget one other factor: Trump’s vindictiveness — in this case, not just toward his Democratic opponent in the recent election campaign but toward those who voted against him. The Donald is well aware that most Americans who care about climate change and are in favor of a rapid transformation to a green energy America did not vote for him, including prominent figures in Hollywood and Silicon Valley who contributed lavishly to Hillary Clinton’s coffers on the promise that the country would be transformed into a “clean energy superpower.”
Given his well-known penchant for attacking anyone who frustrates his ambitions or speaks negatively of him, and his urge to punish greens by, among other things, obliterating every measure adopted by President Obama to speed the utilization of renewable energy, expect him to rip the EPA apart and do his best to shred any obstacles to fossil fuel exploitation. If that means hastening the incineration of the planet, so be it. He either doesn’t care (since at 70 he won’t live to see it happen), truly doesn’t believe in the science, or doesn’t think it will hurt his company’s business interests over the next few decades.
One other factor has to be added into this witch’s brew: magical thinking. Like so many leaders of recent times, he seems to equate mastery over oil in particular, and fossil fuels in general, with mastery over the world. In this, he shares a common outlook with President Vladimir Putin of Russia, who wrote his Ph.D. dissertation on harnessing Russia’s oil and gas reserves in order to restore the country’s global power, and with ExxonMobil CEO Rex Tillerson, said to be Trump’s top choice for Secretary of State and a long-term business partner of the Putin regime. For these and other politicians and tycoons — and, of course, we’re talking almost exclusively about men here — the possession of giant oil reserves is thought to bestow a kind of manly vigor. Think of it as the national equivalent of Viagra.
Back in 2002, Robert Ebel of the Center for Strategic and International Studies put the matter succinctly: “Oil fuels more than automobiles and airplanes. Oil fuels military power, national treasuries, and international politics… [It is] a determinant of well being, national security, and international power for those who possess [it] and the converse for those who do not.”
Trump seems to have fully absorbed this line of thinking. “American energy dominance will be declared a strategic economic and foreign policy goal of the United States,” he declared at the Williston forum in May. “We will become, and stay, totally independent of any need to import energy from the OPEC cartel or any nations hostile to our interests.” He seems firmly convinced that the accelerated extraction of oil and other carbon-based fuels will “make America great again.”
This is delusional, but as president he will undoubtedly be able to make enough of his energy program happen to achieve both short term and long term energy mayhem. He won’t actually be able to reverse the global shift to renewable energy now under way or leverage increased American fossil fuel production to achieve significant foreign policy advantages. What his efforts are, however, likely to ensure is the surrender of American technological leadership in green energy to countries like China and Germany, already racing ahead in the development of renewable systems. And in the process, he will also guarantee that all of us are going to experience yet more extreme climate events. He will never recreate the dreamy America of his memory or return us to the steamy economic cauldron of the post-World War II period, but he may succeed in restoring the smoggy skies and poisoned rivers that so characterized that era and, as an added bonus, bring planetary climate disaster in his wake. His slogan should be: Make America Smoggy Again.
Copyright 2016 Michael T. Klare
Drowning the World in Oil
Once upon a time, when choosing a new president, a factor for many voters was the perennial question: “Whose finger do you want on the nuclear button?” Of all the responsibilities of America’s top executive, none may be more momentous than deciding whether, and under what circumstances, to activate the “nuclear codes” — the secret alphanumeric messages that would inform missile officers in silos and submarines that the fearful moment had finally arrived to launch their intercontinental ballistic missiles (ICBMs) toward a foreign adversary, igniting a thermonuclear war.
Until recently in the post-Cold War world, however, nuclear weapons seemed to drop from sight, and that question along with it. Not any longer. In 2016, the nuclear issue is back big time, thanks both to the rise of Donald Trump (including various unsettling comments he’s made about nuclear weapons) and actual changes in the global nuclear landscape.
With passions running high on both sides in this year’s election and rising fears about Donald Trump’s impulsive nature and Hillary Clinton’s hawkish one, it’s hardly surprising that the “nuclear button” question has surfaced repeatedly throughout the campaign. In one of the more pointed exchanges of the first presidential debate, Hillary Clinton declared that Donald Trump lacked the mental composure for the job. “A man who can be provoked by a tweet,” she commented, “should not have his fingers anywhere near the nuclear codes.” Donald Trump has reciprocated by charging that Clinton is too prone to intervene abroad. “You’re going to end up in World War III over Syria,” he told reporters in Florida last month.
For most election observers, however, the matter of personal character and temperament has dominated discussions of the nuclear issue, with partisans on each side insisting that the other candidate is temperamentally unfit to exercise control over the nuclear codes. There is, however, a more important reason to worry about whose finger will be on that button this time around: at this very moment, for a variety of reasons, the “nuclear threshold” — the point at which some party to a “conventional” (non-nuclear) conflict chooses to employ atomic weapons — seems to be moving dangerously lower.
Not so long ago, it was implausible that a major nuclear power — the United States, Russia, or China — would consider using atomic weapons in any imaginable conflict scenario. No longer. Worse yet, this is likely to be our reality for years to come, which means that the next president will face a world in which a nuclear decision-making point might arrive far sooner than anyone would have thought possible just a year or two ago — with potentially catastrophic consequences for us all.
No less worrisome, the major nuclear powers (and some smaller ones) are all in the process of acquiring new nuclear arms, which could, in theory, push that threshold lower still. These include a variety of cruise missiles and other delivery systems capable of being used in “limited” nuclear wars — atomic conflicts that, in theory at least, could be confined to just a single country or one area of the world (say, Eastern Europe) and so might be even easier for decision-makers to initiate. The next president will have to decide whether the U.S. should actually produce weapons of this type and also what measures should be taken in response to similar decisions by Washington’s likely adversaries.
Lowering the Nuclear Threshold
During the dark days of the Cold War, nuclear strategists in the United States and the Soviet Union conjured up elaborate conflict scenarios in which military actions by the two superpowers and their allies might lead from, say, minor skirmishing along the Iron Curtain to full-scale tank combat to, in the end, the use of “battlefield” nuclear weapons, and then city-busting versions of the same to avert defeat. In some of these scenarios, strategists hypothesized about wielding “tactical” or battlefield weaponry — nukes powerful enough to wipe out a major tank formation, but not Paris or Moscow — and claimed that it would be possible to contain atomic warfare at such a devastating but still sub-apocalyptic level. (Henry Kissinger, for instance, made his reputation by preaching this lunatic doctrine in his first book, Nuclear Weapons and Foreign Policy.) Eventually, leaders on both sides concluded that the only feasible role for their atomic arsenals was to act as deterrents to the use of such weaponry by the other side. This was, of course, the concept of “mutually assured destruction,” or — in one of the most classically apt acronyms of all times: MAD. It would, in the end, form the basis for all subsequent arms control agreements between the two superpowers.
Anxiety over the escalatory potential of tactical nuclear weapons peaked in the 1970s when the Soviet Union began deploying the SS-20 intermediate-range ballistic missile (capable of striking cities in Europe, but not the U.S.) and Washington responded with plans to deploy nuclear-armed, ground-launched cruise missiles and the Pershing-II ballistic missile in Europe. The announcement of such plans provoked massive antinuclear demonstrations across Europe and the United States. On December 8, 1987, at a time when worries had been growing about how a nuclear conflagration in Europe might trigger an all-out nuclear exchange between the superpowers, President Ronald Reagan and Soviet leader Mikhail Gorbachev signed the Intermediate-Range Nuclear Forces (INF) Treaty.
That historic agreement — the first to eliminate an entire class of nuclear delivery systems — banned the deployment of ground-based cruise or ballistic missiles with a range of 500 and 5,500 kilometers and required the destruction of all those then in existence. After the collapse of the Soviet Union, the Russian Federation inherited the USSR’s treaty obligations and pledged to uphold the INF along with other U.S.-Soviet arms control agreements. In the view of most observers, the prospect of a nuclear war between the two countries practically vanished as both sides made deep cuts in their atomic stockpiles in accordance with already existing accords and then signed others, including the New START, the Strategic Arms Reduction Treaty of 2010.
Today, however, this picture has changed dramatically. The Obama administration has concluded that Russia has violated the INF treaty by testing a ground-launched cruise missile of prohibited range, and there is reason to believe that, in the not-too-distant future, Moscow might abandon that treaty altogether. Even more troubling, Russia has adopted a military doctrine that favors the early use of nuclear weapons if it faces defeat in a conventional war, and NATO is considering comparable measures in response. The nuclear threshold, in other words, is dropping rapidly.
Much of this is due, it seems, to Russian fears about its military inferiority vis-à-vis the West. In the chaotic years following the collapse of the USSR, Russian military spending plummeted and the size and quality of its forces diminished accordingly. In an effort to restore Russia’s combat capabilities, President Vladimir Putin launched a multi-year, multi-billion-dollar expansion and modernization program. The fruits of this effort were apparent in the Crimea and Ukraine in 2014, when Russian forces, however disguised, demonstrated better fighting skills and wielded better weaponry than in the Chechnya wars a decade earlier. Even Russian analysts acknowledge, however, that their military in its current state would be no match for American and NATO forces in a head-on encounter, given the West’s superior array of conventional weaponry. To fill the breach, Russian strategic doctrine now calls for the early use of nuclear weapons to offset an enemy’s superior conventional forces.
To put this in perspective, Russian leaders ardently believe that they are the victims of a U.S.-led drive by NATO to encircle their country and diminish its international influence. They point, in particular, to the build-up of NATO forces in the Baltic countries, involving the semi-permanent deployment of combat battalions in what was once the territory of the Soviet Union, and in apparent violation of promises made to Gorbachev in 1990 that NATO would not do so. As a result, Russia has been bolstering its defenses in areas bordering Ukraine and the Baltic states, and training its troops for a possible clash with the NATO forces stationed there.
This is where the nuclear threshold enters the picture. Fearing that it might be defeated in a future clash, its military strategists have called for the early use of tactical nuclear weapons, some of which no doubt would violate the INF Treaty, in order to decimate NATO forces and compel them to quit fighting. Paradoxically, in Russia, this is labeled a “de-escalation” strategy, as resorting to strategic nuclear attacks on the U.S. under such circumstances would inevitably result in Russia’s annihilation. On the other hand, a limited nuclear strike (so the reasoning goes) could potentially achieve success on the battlefield without igniting all-out atomic war. As Eugene Rumer of the Carnegie Endowment of International Peace explains, this strategy assumes that such supposedly “limited” nuclear strikes “will have a sobering effect on the enemy, which will then cease and desist.”
To what degree tactical nuclear weapons have been incorporated into Moscow’s official military doctrine remains unknown, given the degree of secrecy surrounding such matters. It is apparent, however, that the Russians have been developing the means with which to conduct such “limited” strikes. Of greatest concern to Western analysts in this regard is their deployment of the Iskander-M short-range ballistic missile, a modern version of the infamous Soviet-era “Scud” missile (used by Saddam Hussein’s forces during the Iran-Iraq war of 1980-1988 and the Persian Gulf War of 1990-1991). Said to have a range of 500 kilometers (just within the INF limit), the Iskander can carry either a conventional or a nuclear warhead. As a result, a targeted country or a targeted military could never be sure which type it might be facing (and might simply assume the worst). Adding to such worries, the Russians have deployed the Iskander in Kaliningrad, a tiny chunk of Russian territory wedged between Poland and Lithuania that just happens to put it within range of many western European cities.
In response, NATO strategists have discussed lowering the nuclear threshold themselves, arguing — ominously enough — that the Russians will only be fully dissuaded from employing their limited-nuclear-war strategy if they know that NATO has a robust capacity to do the same. At the very least, what’s needed, some of them claim, is a more frequent inclusion of nuclear-capable or dual-use aircraft in exercises on Russia’s frontiers to “signal” NATO’s willingness to resort to limited nuclear strikes, too. Again, such moves are not yet official NATO strategy, but it’s clear that senior officials are weighing them seriously.
Just how all of this might play out in a European crisis is, of course, unknown, but both sides in an increasingly edgy standoff are coming to accept that nuclear weapons might have a future military role, which is, of course, a recipe for almost unimaginable escalation and disaster of an apocalyptic sort. This danger is likely to become more pronounced in the years ahead because both Washington and Moscow seem remarkably intent on developing and deploying new nuclear weapons designed with just such needs in mind.
The New Nuclear Armaments
Both countries are already in the midst of ambitious and extremely costly efforts to “modernize” their nuclear arsenals. Of all the weapons now being developed, the two generating the most anxiety in terms of that nuclear threshold are a new Russian ground-launched cruise missile (GLCM) and an advanced U.S. air-launched cruise missile (ALCM). Unlike ballistic missiles, which exit the Earth’s atmosphere before returning to strike their targets, such cruise missiles remain within the atmosphere throughout their flight.
American officials claim that the Russian GLCM, reportedly now being deployed, is of a type outlawed by the INF Treaty. Without providing specifics, the State Department indicated in a 2014 memo that it had “a range capability of 500 km [kilometers] to 5,500 km,” which would indeed put it in violation of that treaty by allowing Russian combat forces to launch nuclear warheads against cities throughout Europe and the Middle East in a “limited” nuclear war.
The GLCM is likely to prove one of the most vexing foreign policy issues the next president will face. So far, the White House has been reluctant to press Moscow too hard, fearing that the Russians might respond by exiting the INF Treaty altogether and so eliminate remaining constraints on its missile program. But many in Congress and among Washington’s foreign policy elite are eager to see the next occupant of the Oval Office take a tougher stance if the Russians don’t halt deployment of the missile, threatening Moscow with more severe economic sanctions or moving toward countermeasures like the deployment of enhanced anti-missile systems in Europe. The Russians would, in turn, undoubtedly perceive such moves as threats to their strategic deterrent forces and so an invitation for further weapons acquisitions, setting off a fresh round in the long-dormant Cold War nuclear arms race.
On the American side, the weapon of immediate concern is a new version of the AGM-86B air-launched cruise missile, usually carried by B-52 bombers. Also known as the Long-Range Standoff Weapon (LRSO), it is, like the Iskander-M, expected to be deployed in both nuclear and conventional versions, leaving those on the potential receiving end unsure what might be heading their way. In other words, as with the Iskander-M, the intended target might assume the worst in a crisis, leading to the early use of nuclear weapons. Put another way, such missiles make for twitchy trigger fingers and are likely to lead to a heightened risk of nuclear war, which, once started, might in turn take Washington and Moscow right up the escalatory ladder to a planetary holocaust.
No wonder former Secretary of Defense William J. Perry called on President Obama to cancel the ALCM program in a recent Washington Post op-ed piece. “Because they… come in both nuclear and conventional variants,” he wrote, “cruise missiles are a uniquely destabilizing type of weapon.” And this issue is going to fall directly into the lap of the next president.
The New Nuclear Era
Whoever is elected on November 8th, we are evidently all headed into a world in which Trumpian-style itchy trigger fingers could be the norm. It already looks like both Moscow and Washington will contribute significantly to this development — and they may not be alone. In response to Russian and American moves in the nuclear arena, China is reported to be developing a “hypersonic glide vehicle,” a new type of nuclear warhead better able to evade anti-missile defenses — something that, at a moment of heightened crisis, might make a nuclear first strike seem more attractive to Washington. And don’t forget Pakistan, which is developing its own short-range “tactical” nuclear missiles, increasing the risk of the quick escalation of any future Indo-Pakistani confrontation to a nuclear exchange. (To put such “regional” dangers in perspective, a local nuclear war in South Asia could cause a global nuclear winter and, according to one study, possibly kill a billion people worldwide, thanks to crop failures and the like.)
And don’t forget North Korea, which is now testing a nuclear-armed ICBM, the Musudan, intended to strike the Western United States. That prompted a controversial decision in Washington to deploy THAAD (Terminal High Altitude Area Defense) anti-missile batteries in South Korea (something China bitterly opposes), as well as the consideration of other countermeasures, including undoubtedly scenarios involving first strikes against the North Koreans.
It’s clear that we’re on the threshold of a new nuclear era: a time when the actual use of atomic weapons is being accorded greater plausibility by military and political leaders globally, while war plans are being revised to allow the use of such weapons at an earlier stage in future armed clashes.
As a result, the next president will have to grapple with nuclear weapons issues — and possible nuclear crises — in a way unknown since the Cold War era. Above all else, this will require both a cool head and a sufficient command of nuclear matters to navigate competing pressures from allies, the military, politicians, pundits, and the foreign policy establishment without precipitating a nuclear conflagration. On the face of it, that should disqualify Donald Trump. When questioned on nuclear issues in the first debate, he exhibited a striking ignorance of the most basic aspects of nuclear policy. But even Hillary Clinton, for all her experience as secretary of state, is likely to have a hard time grappling with the pressures and dangers that are likely to arise in the years ahead, especially given that her inclination is to toughen U.S. policy toward Russia.
In other words, whoever enters the Oval Office, it may be time for the rest of us to take up those antinuclear signs long left to molder in closets and memories, and put some political pressure on leaders globally to avoid strategies and weapons that would make human life on this planet so much more precarious than it already is.
Election 2016 and the Growing Global Nuclear Threat
In a year of record-setting heat on a blistered globe, with fast-warming oceans, fast-melting ice caps, and fast-rising sea levels, ratification of the December 2015 Paris climate summit agreement — already endorsed by most nations — should be a complete no-brainer. That it isn’t tells you a great deal about our world. Global geopolitics and the possible rightward lurch of many countries (including a potential deal-breaking election in the United States that could put a climate denier in the White House) spell bad news for the fate of the Earth. It’s worth exploring how this might come to be.
The delegates to that 2015 climate summit were in general accord about the science of climate change and the need to cap global warming at 1.5 to 2.0 degrees Celsius (or 2.6 to 3.5 degrees Fahrenheit) before a planetary catastrophe ensues. They disagreed, however, about much else. Some key countries were in outright conflict with other states (Russia with Ukraine, for example) or deeply hostile to each other (as with India and Pakistan or the U.S. and Iran). In recognition of such tensions and schisms, the assembled countries crafted a final document that replaced legally binding commitments with the obligation of each signatory state to adopt its own unique plan, or “nationally determined contribution” (NDC), for curbing climate-altering greenhouse gas emissions.
As a result, the fate of the planet rests on the questionable willingness of each of those countries to abide by that obligation, however sour or bellicose its relations with other signatories may be. As it happens, that part of the agreement has already been buffeted by geopolitical headwinds and is likely to face increasing turbulence in the years to come.
That geopolitics will play a decisive role in determining the success or failure of the Paris Agreement has become self-evident in the short time since its promulgation. While some progress has been made toward its formal adoption — the agreement will enter into force only after no fewer than 55 countries, accounting for at least 55% of global greenhouse gas emissions, have ratified it — it has also encountered unexpected political hurdles, signaling trouble to come.
On the bright side, in a stunning diplomatic coup, President Obama persuaded Chinese President Xi Jinping to sign the accord with him during a recent meeting of the G-20 group of leading economies in Hangzhou. Together, the two countries are responsible for a striking 40% of global emissions. “Despite our differences on other issues,” Obama noted during the signing ceremony, “we hope our willingness to work together on this issue will inspire further ambition and further action around the world.”
Brazil, the planet’s seventh largest emitter, just signed on as well, and a number of states, including Japan and New Zealand, have announced their intention to ratify the agreement soon. Many others are expected to do so before the next major U.N. climate summit in Marrakesh, Morocco, this November.
On the dark side, however, Great Britain’s astonishing Brexit vote has complicated the task of ensuring the European Union’s approval of the agreement, as European solidarity on the climate issue — a major factor in the success of the Paris negotiations — can no longer be assured. “There is a risk that this could kick EU ratification of the Paris Agreement into the long grass,” suggests Jonathan Grant, director of sustainability at PricewaterhouseCoopers.
The Brexit campaign itself was spearheaded by politicians who were also major critics of climate science and strong opponents of efforts to promote a transition from carbon-based fuels to green sources of energy. For example, the chair of the Vote Leave campaign, former Chancellor of the Exchequer Nigel Lawson, is also chairman of the Global Warming Policy Foundation, a think-tank devoted to sabotaging government efforts to speed the transition to green energy. Many other top Leave campaigners, including former Conservative ministers John Redwood and Owen Paterson, were also vigorous climate deniers.
In explaining the strong link between these two camps, analysts at the Economist noted that both oppose British submission to international laws and norms: “Brexiteers dislike EU regulations and know that any effective action to tackle climate change will require some kind of global cooperation: carbon taxes or binding targets on emissions. The latter would be the EU writ large and Britain would have even less say in any global agreement, involving some 200 nations, than in an EU regime involving 28.”
Keep in mind as well that Angela Merkel and François Hollande, the leaders of the other two anchors of the European Union, Germany and France, are both embattled by right-wing anti-immigrant parties likely to be similarly unfriendly to such an agreement. And in what could be the deal-breaker of history, this same strain of thought, combining unbridled nationalism, climate denialism, fierce hostility to immigration, and unwavering support for domestic fossil fuel production, also animates Donald Trump’s campaign for the American presidency.
In his first major speech on energy, delivered in May, Trump — who has called global warming a Chinese hoax — pledged to “cancel the Paris climate agreement” and scrap the various measures announced by President Obama to ensure U.S. compliance with its provisions. Echoing the views of his Brexit counterparts, he complained that “this agreement gives foreign bureaucrats control over how much energy we use on our land, in our country. No way.” He also vowed to revive construction of the Keystone XL pipeline (which would bring carbon-heavy Canadian tar sands oil to refineries on the U.S. Gulf Coast), to reverse any climate-friendly Obama administration acts, and to promote the coal industry. “Regulations that shut down hundreds of coal-fired power plants and block the construction of new ones — how stupid is that?” he said, mockingly.
In Europe, ultra-nationalist parties on the right are riding a wave of Islamaphobia, anti-immigrant sentiment, and disgust with the European Union. In France, for instance, former president Nicolas Sarkozy announced his intention to run for that post again, promising even more stringent controls on migrants and Muslims and a greater focus on French “identity.” Even further to the right, the rabidly anti-Muslim Marine Le Pen is also in the race at the head of her National Front Party. Like-minded candidates have already made gains in national elections in Austria and most recently in a state election in Germany that stunned Merkel’s ruling party. In each case, they surged by disavowing relatively timid efforts by the European Union to resettle refugees from Syria and other war-torn countries. Although climate change is not a defining issue in these contests as it is in the U.S. and Britain, the growing opposition to anything associated with the EU and its regulatory system poses an obvious threat to future continent-wide efforts to cap greenhouse gas emissions.
Elsewhere in the world, similar strands of thinking are spreading, raising serious questions about the ability of governments to ratify the Paris Agreement or, more importantly, to implement its provisions. Take India, for example.
Prime Minister Narendra Modi of the Hindu nationalist Bharatiya Janata Party (BJP) has indeed voiced support for the Paris accord and promised a vast expansion of solar power. He has also made no secret of his determination to promote economic growth at any cost, including greatly increased reliance on coal-powered electricity. That spells trouble. According to the Energy Information Administration of the U.S. Department of Energy, India is likely to double its coal consumption over the next 25 years, making it the world’s second largest coal consumer after China. Combined with an increase in oil and natural gas consumption, such a surge in coal use could result in a tripling of India’s carbon dioxide emissions at a time when most countries (including the U.S. and China) are expected to experience a peak or decline in theirs.
Prime Minister Modi is well aware that his devotion to coal has generated resentment among environmentalists in India and elsewhere who seek to slow the growth of carbon emissions. He nonetheless insists that, as a major developing nation, India should enjoy a special right to achieve economic growth in any way it can, even if this means endangering the environment. “The desire to improve one’s lot has been the primary driving force behind human progress,” his government affirmed in its emissions-reduction pledge to the Paris climate summit. “Nations that are now striving to fulfill this ‘right to grow’ of their teeming millions cannot be made to feel guilty [about] their development agenda as they attempt to fulfill this legitimate aspiration.”
Russia is similarly likely to put domestic economic needs (and the desire to remain a great power, militarily and otherwise) ahead of its global climate obligations. Although President Vladimir Putin attended the Paris summit and assured the gathered nations of Russian compliance with its outcome, he has also made it crystal clear that his country has no intention of giving up its reliance on oil and natural gas exports for a large share of its national income. According to the Energy Information Administration, Russia’s government relies on such exports for a staggering 50% of its operating revenue, a share it dare not jeopardize at a time when its economy — already buffeted by European Union and U.S. sanctions — is in deep recession. To ensure the continued flow of hydrocarbon income, in fact, Moscow has announced multibillion dollar plans to develop new oil and gas fields in Siberia and the Arctic, even if such efforts fly in the face of commitments to reduce future carbon emissions.
From Reform and Renewal to Rivalry
Such nationalistic exceptionalism could become something of the norm if Donald Trump wins in November, or other nations join those already eager to put the needs of a fossil fuel-based domestic growth agenda ahead of global climate commitments. With that in mind, consider the assessment of future energy trends that the Norwegian energy giant Statoil recently produced. In it is a chilling scenario focused on just this sort of dystopian future.
The second-biggest producer of natural gas in Europe after Russia’s Gazprom, Statoil annually issues Energy Perspectives, a report that explores possible future energy trends. Previous editions included scenarios labeled “reform” (predicated on coordinated but gradual international efforts to shift from carbon fuels to green energy technology) and “renewal” (positing a more rapid transition). The 2016 edition, however, added a grim new twist: “rivalry.” It depicts a realistically downbeat future in which international strife and geopolitical competition discourage significant cooperation in the climate field.
According to the document, the new section is “driven” by real-world developments — by, that is, “a series of political crises, growing protectionism, and a general fragmentation of the state system, resulting in a multipolar world developing in different directions. In this scenario, there is growing disagreement about the rules of the game and a decreasing ability to manage crises in the political, economic, and environmental arenas.”
In such a future, Statoil suggests, the major powers would prove to be far more concerned with satisfying their own economic and energy requirements than pursuing collaborative efforts aimed at slowing the pace of climate change. For many of them, this would mean maximizing the cheapest and most accessible fuel options available — often domestic supplies of fossil fuels. Under such circumstances, the report suggests, the use of coal would rise, not fall, and its share of global energy consumption would actually increase from 29% to 32%.
In such a world, forget about those “nationally determined contributions” agreed to in Paris and think instead about a planet whose environment will grow ever less friendly to life as we know it. In its rivalry scenario, writes Statoil, “the climate issue has low priority on the regulatory agenda. While local pollution issues are attended to, large-scale international climate agreements are not the chosen way forward. As a consequence, the current NDCs are only partly implemented. Climate finance ambitions are not met, and carbon pricing to stimulate cost-efficient reductions in countries and across national borders are limited.”
Coming from a major fossil fuel company, this vision of how events might play out on an increasingly tumultuous planet makes for peculiar reading: more akin to Eaarth — Bill McKibben’s dystopian portrait of a climate-ravaged world — than the usual industry-generated visions of future world health and prosperity. And while “rivalry” is only one of several scenarios Statoil’s authors considered, they clearly found it unnervingly convincing. Hence, in a briefing on the report, the company’s chief economist Eirik Wærness indicated that Great Britain’s looming exit from the EU was exactly the sort of event that would fit the proposed model and might multiply in the future.
Climate Change in a World of Geopolitical Exceptionalism
Indeed, the future pace of climate change will be determined as much by geopolitical factors as by technological developments in the energy sector. While it is evident that immense progress is being made in bringing down the price of wind and solar power in particular — far more so than all but a few analysts anticipated until recently — the political will to turn such developments into meaningful global change and so bring carbon emissions to heel before the planet is unalterably transformed may, as the Statoil authors suggest, be dematerializing before our eyes. If so, make no mistake about it: we will be condemning Earth’s future inhabitants, our own children and grandchildren, to unmitigated disaster.
As President Obama’s largely unheralded success in Hangzhou indicates, such a fate is not etched in stone. If he could persuade the fiercely nationalistic leader of a country worried about its economic future to join him in signing the climate agreement, more such successes are possible. His ability to achieve such outcomes is, however, diminishing by the week, and few other leaders of his stature and determination appear to be waiting in the wings.
To avoid an Eaarth (as both Bill McKibben and the Statoil authors imagine it) and preserve the welcoming planet in which humanity grew and thrived, climate activists will have to devote at least as much of their energy and attention to the international political arena as to the technology sector. At this point, electing green-minded leaders, stopping climate deniers (or ignorers) from capturing high office, and opposing fossil-fueled ultra-nationalism is the only realistic path to a habitable planet.
Will Trumpism, Brexit, and Geopolitical Exceptionalism Sink the Planet?
Here’s the good news: wind power, solar power, and other renewable forms of energy are expanding far more quickly than anyone expected, ensuring that these systems will provide an ever-increasing share of our future energy supply. According to the most recent projections from the Energy Information Administration (EIA) of the U.S. Department of Energy, global consumption of wind, solar, hydropower, and other renewables will double between now and 2040, jumping from 64 to 131 quadrillion British thermal units (BTUs).
And here’s the bad news: the consumption of oil, coal, and natural gas is also growing, making it likely that, whatever the advances of renewable energy, fossil fuels will continue to dominate the global landscape for decades to come, accelerating the pace of global warming and ensuring the intensification of climate-change catastrophes.
The rapid growth of renewable energy has given us much to cheer about. Not so long ago, energy analysts were reporting that wind and solar systems were too costly to compete with oil, coal, and natural gas in the global marketplace. Renewables would, it was then assumed, require pricey subsidies that might not always be available. That was then and this is now. Today, remarkably enough, wind and solar are already competitive with fossil fuels for many uses and in many markets.
If that wasn’t predicted, however, neither was this: despite such advances, the allure of fossil fuels hasn’t dissipated. Iindividuals, governments, whole societies continue to opt for such fuels even when they gain no significant economic advantage from that choice and risk causing severe planetary harm. Clearly, something irrational is at play. Think of it as the fossil-fuel equivalent of an addictive inclination writ large.
The contradictory and troubling nature of the energy landscape is on clear display in the 2016 edition of the International Energy Outlook, the annual assessment of global trends released by the EIA this May. The good news about renewables gets prominent attention in the report, which includes projections of global energy use through 2040. “Renewables are the world’s fastest-growing energy source over the projection period,” it concludes. Wind and solar are expected to demonstrate particular vigor in the years to come, their growth outpacing every other form of energy. But because renewables start from such a small base — representing just 12% of all energy used in 2012 — they will continue to be overshadowed in the decades ahead, explosive growth or not. In 2040, according to the report’s projections, fossil fuels will still have a grip on a staggering 78% of the world energy market, and — if you don’t mind getting thoroughly depressed — oil, coal, and natural gas will each still command larger shares of the market than all renewables combined.
Keep in mind that total energy consumption is expected to be much greater in 2040 than at present. At that time, humanity will be using an estimated 815 quadrillion BTUs (compared to approximately 600 quadrillion today). In other words, though fossil fuels will lose some of their market share to renewables, they will still experience striking growth in absolute terms. Oil consumption, for example, is expected to increase by 34% from 90 million to 121 million barrels per day by 2040. Despite all the negative publicity it’s been getting lately, coal, too, should experience substantial growth, rising from 153 to 180 quadrillion BTUs in “delivered energy” over this period. And natural gas will be the fossil-fuel champ, with global demand for it jumping by 70%. Put it all together and the consumption of fossil fuels is projected to increase by 177 quadrillion BTUs, or 38%, over the period the report surveys.
Anyone with even the most rudimentary knowledge of climate science has to shudder at such projections. After all, emissions from the combustion of fossil fuels account for approximately three-quarters of the greenhouse gases humans are putting into the atmosphere. An increase in their consumption of such magnitude will have a corresponding impact on the greenhouse effect that is accelerating the rise in global temperatures.
At the United Nations Climate Summit in Paris last December, delegates from more than 190 countries adopted a plan aimed at preventing global warming from exceeding 2 degrees Celsius (about 3.6 degrees Fahrenheit) above the pre-industrial level. This target was chosen because most scientists believe that any warming beyond that will result in catastrophic and irreversible climate effects, including the melting of the Greenland and Antarctic ice caps (and a resulting sea-level rise of 10-20 feet). Under the Paris Agreement, the participating nations signed onto a plan to take immediate steps to halt the growth of greenhouse gas emissions and then move to actual reductions. Although the agreement doesn’t specify what measures should be taken to satisfy this requirement — each country is obliged to devise its own “intended nationally determined contributions” to the overall goal — the only practical approach for most countries would be to reduce fossil fuel consumption.
As the 2016 EIA report makes eye-poppingly clear, however, the endorsers of the Paris Agreement aren’t on track to reduce their consumption of oil, coal, and natural gas. In fact, greenhouse gas emissions are expected to rise by an estimated 34% between 2012 and 2040 (from 32.3 billion to 43.2 billion metric tons). That net increase of 10.9 billion metric tons is equal to the total carbon emissions of the United States, Canada, and Europe in 2012. If such projections prove accurate, global temperatures will rise, possibly significantly above that 2 degree mark, with the destructive effects of climate change we are already witnessing today — the fires, heat waves, floods, droughts, storms, and sea level rise — only intensifying.
Exploring the Roots of Addiction
How to explain the world’s tenacious reliance on fossil fuels, despite all that we know about their role in global warming and those lofty promises made in Paris?
To some degree, it is undoubtedly the product of built-in momentum: our existing urban, industrial, and transportation infrastructure was largely constructed around fossil fuel-powered energy systems, and it will take a long time to replace or reconfigure them for a post-carbon future. Most of our electricity, for example, is provided by coal- and gas-fired power plants that will continue to operate for years to come. Even with the rapid growth of renewables, coal and natural gas are projected to supply 56% of the fuel for the world’s electrical power generation in 2040 (a drop of only 5% from today). Likewise, the overwhelming majority of cars and trucks on the road are now fueled by gasoline and diesel. Even if the number of new ones running on electricity were to spike, it would still be many years before oil-powered vehicles lost their commanding position. As history tells us, transitions from one form of energy to another take time.
Then there’s the problem — and what a problem it is! — of vested interests. Energy is the largest and most lucrative business in the world, and the giant fossil fuel companies have long enjoyed a privileged and highly profitable status. Oil corporations like Chevron and ExxonMobil, along with their state-owned counterparts like Gazprom of Russia and Saudi Aramco, are consistently ranked among the world’s most valuable enterprises. These companies — and the governments they’re associated with — are not inclined to surrender the massive profits they generate year after year for the future wellbeing of the planet.
As a result, it’s a guarantee that they will employ any means at their disposal (including well-established, well-funded ties to friendly politicians and political parties) to slow the transition to renewables. In the United States, for example, the politicians of coal-producing states are now at work on plans to block the Obama administration’s “clean power” drive, which might indeed lead to a sharp reduction in coal consumption. Similarly, Exxon has recruited friendly Republican officials to impede the efforts of some state attorney generals to investigate that company’s past suppression of information on the links between fossil fuel use and climate change. And that’s just to scratch the surface of corporate efforts to mislead the public that have included the funding of the Heartland Institute and other climate-change-denying think tanks.
Of course, nowhere is the determination to sustain fossil fuels fiercer than in the “petro-states” that rely on their production for government revenues, provide energy subsidies to their citizens, and sometimes sell their products at below-market rates to encourage their use. According to the International Energy Agency (IEA), in 2014 fossil fuel subsidies of various sorts added up to a staggering $493 billion worldwide — far more than those for the development of renewable forms of energy. The G-20 group of leading industrial powers agreed in 2009 to phase out such subsidies, but a meeting of G-20 energy ministers in Beijing in June failed to adopt a timeline to complete the phase-out process, suggesting that little progress will be made when the heads of state of those countries meet in Hangzhou, China, this September.
None of this should surprise anyone, given the global economy’s institutionalized dependence on fossil fuels and the amounts of money at stake. What it doesn’t explain, however, is the projected growth in global fossil fuel consumption. A gradual decline, accelerating over time, would be consistent with a broad-scale but slow transition from carbon-based fuels to renewables. That the opposite seems to be happening, that their use is actually expanding in most parts of the world, suggests that another factor is in play: addiction.
We all know that smoking tobacco, snorting cocaine, or consuming too much alcohol is bad for us, but many of us persist in doing so anyway, finding the resulting thrill, the relief, or the dulling of the pain of everyday life simply too great to resist. In the same way, much of the world now seems to find it easier to fill up the car with the usual tankful of gasoline or flip the switch and receive electricity from coal or natural gas than to begin to shake our addiction to fossil fuels. As in everyday life, so at a global level, the power of addiction seems regularly to trump the obvious desirability of embarking on another, far healthier path.
On a Fossil Fuel Bridge to Nowhere
Without acknowledging any of this, the 2016 EIA report indicates just how widespread and prevalent our fossil-fuel addiction remains. In explaining the rising demand for oil, for example, it notes that “in the transportation sector, liquid fuels [predominantly petroleum] continue to provide most of the energy consumed.” Even though “advances in nonliquids-based [electrical] transportation technologies are anticipated,” they will not prove sufficient “to offset the rising demand for transportation services worldwide,” and so the demand for gasoline and diesel will continue to grow.
Most of the increase in demand for petroleum-based fuels is expected to occur in the developing world, where hundreds of millions of people are entering the middle class, buying their first gas-powered cars, and about to be hooked on an energy way of life that should be, but isn’t, dying. Oil use is expected to grow in China by 57% between 2012 and 2040, and at a faster rate (131%!) in India. Even in the United States, however, a growing preference for sport utility vehicles and pickup trucks continues to mean higher petroleum use. In 2016, according to Edmunds.com, a car shopping and research site, nearly 75% of the people who traded in a hybrid or electric car to a dealer replaced it with an all-gas car, typically a larger vehicle like an SUV or a pickup.
The rising demand for coal follows a depressingly similar pattern. Although it remains a major source of the greenhouse gases responsible for climate change, many developing nations, especially in Asia, continue to favor it when adding electricity capacity because of its low cost and familiar technology. Although the demand for coal in China — long the leading consumer of that fuel — is slowing, that country is still expected to increase its usage by 12% by 2035. The big story here, however, is India: according to the EIA, its coal consumption will grow by 62% in the years surveyed, eventually making it, not the United States, the world’s second largest consumer. Most of that extra coal will go for electricity generation, once again to satisfy an “expanding middle class using more electricity-consuming appliances.”
And then there’s the mammoth expected increase in the demand for natural gas. According to the latest EIA projections, its consumption will rise faster than any fuel except renewables. Given the small base from which renewables start, however, gas will experience the biggest absolute increase of any fuel, 87 quadrillion BTUs between 2012 and 2040. (In contrast, renewables are expected to grow by 68 quadrillion and oil by 62 quadrillion BTUs during this period.)
At present, natural gas appears to enjoy an enormous advantage in the global energy marketplace. “In the power sector, natural gas is an attractive choice for new generating plants given its moderate capital cost and attractive pricing in many regions as well as the relatively high fuel efficiency and moderate capital cost of gas-fired plants,” the EIA notes. It is also said to benefit from its “clean” reputation (compared to coal) in generating electricity. “As more governments begin implementing national or regional plans to reduce carbon dioxide emissions, natural gas may displace consumption of the more carbon-intensive coal and liquid fuels.”
Unfortunately, despite that reputation, natural gas remains a carbon-based fossil fuel, and its expanded consumption will result in a significant increase in global greenhouse gas emissions. In fact, the EIA claims that it will generate a larger increase in such emissions over the next quarter-century than either coal or oil — a disturbing note for those who contend that natural gas provides a “bridge” to a green energy future.
If you were to read through the EIA’s latest report as I did, you, too, might end up depressed by humanity’s addictive need for its daily fossil fuel hit. While the EIA’s analysts add the usual caveats, including the possibility that a more sweeping than expected follow-up climate agreement or strict enforcement of the one adopted last December could alter their projections, they detect no signs of the beginning of a determined move away from the reliance on fossil fuels.
If, indeed, addiction is a big part of the problem, any strategies undertaken to address climate change must incorporate a treatment component. Simply saying that global warming is bad for the planet, and that prudence and morality oblige us to prevent the worst climate-related disasters, will no more suffice than would telling addicts that tobacco and hard drugs are bad for them. Success in any global drive to avert climate catastrophe will involve tackling addictive behavior at its roots and promoting lasting changes in lifestyle. To do that, it will be necessary to learn from the anti-drug and anti-tobacco communities about best practices, and apply them to fossil fuels.
Consider, for example, the case of anti-smoking efforts. It was the medical community that first took up the struggle against tobacco and began by banning smoking in hospitals and other medical facilities. This effort was later extended to public facilities — schools, government buildings, airports, and so on — until vast areas of the public sphere became smoke-free. Anti-smoking activists also campaigned to have warning labels displayed in tobacco advertising and cigarette packaging.
Such approaches helped reduce tobacco consumption around the world and can be adapted to the anti-carbon struggle. College campuses and town centers could, for instance, be declared car-free — a strategy already embraced by London’s newly elected mayor, Sadiq Khan. Express lanes on major streets and highways can be reserved for hybrids, electric cars, and other alternative vehicles. Gas station pumps and oil advertising can be made to incorporate warning signs saying something like, “Notice: consumption of this product increases your exposure to asthma, heat waves, sea level rise, and other threats to public health.” Once such an approach began to be seriously considered, there would undoubtedly be a host of other ideas for how to begin to put limits on our fossil fuel addiction.
Such measures would have to be complemented by major moves to combat the excessive influence of the fossil fuel companies and energy states when it comes to setting both local and global policy. In the U.S., for instance, severely restricting the scope of private donations in campaign financing, as Senator Bernie Sanders advocated in his presidential campaign, would be a way to start down this path. Another would step up legal efforts to hold giant energy companies like ExxonMobil accountable for malfeasance in suppressing information about the links between fossil fuel combustion and global warming, just as, decades ago, anti-smoking activists tried to expose tobacco company criminality in suppressing information on the links between smoking and cancer.
Without similar efforts of every sort on a global level, one thing seems certain: the future projected by the EIA will indeed come to pass and human suffering of a previously unimaginable sort will be the order of the day.
Copyright 2016 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
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.
These states vary in both their willingness and ability to respond to this new reality effectively. Some are too deeply committed to their existing business model (and its associated leadership system) to consider significant changes; others, increasingly aware of the need to do something, find almost insuperable structural roadblocks in the way; and a third group, recognizing the desperate need for change, is attempting a total economic overhaul of its oil economies. In recent weeks, examples of all three types – Venezuela for the first, Nigeria the second, and Saudi Arabia the third — have surfaced in the news.
Venezuela: A Nation on the Brink
Venezuela claims the world’s largest proven reserves of petroleum, an estimated 298 billion barrels of oil. In past decades, the exploitation of this vast fossil fuel patrimony has ensured incredible wealth for foreign companies and Venezuelan elites alike. After assuming the presidency in 1999, however, Hugo Chávez sought to channel the bulk of this wealth to Venezuela’s poor and working classes by forcing foreign firms to partner with the state-owned oil firm PdVSA and redirecting that company’s profits to government spending programs. Billions of dollars were funneled into state-directed “missions” to the poor, lifting millions of Venezuelans out of poverty. In 2002, when the company’s long-serving managers rebelled against these moves, Chávez simply replaced them with his own party loyalists and the diversion of funds continued.
In the wake of the ousting of that original management team, the country’s oil production began to decline. With prices running at or above $100 per barrel, this initially seemed to make little difference as money continued to pour into government coffers and those missions to the poor kept right on going. What Chavez didn’t do, however, was create the national equivalent of a rainy-day fund. Little of the oil money was channeled into a sovereign wealth fund for more problematic moments, nor was any invested in other kinds of industries that might in time have generated streams of non-fossil-fuel income for the government.
As a result, when prices began to drop in the fall of 2014, Chavez’s presidential successor, Nicolás Maduro, faced a triple calamity: diminished revenues for social services, scant savings to draw upon, and no alternative sources of income. Not surprisingly, as a new impoverishment spread, many former Chavistas lost faith in the regime and, in last December’s parliamentary elections, voted for emboldened opposition candidates.
Today, Venezuela is a nation living under an officially declared “state of emergency,” politically riven, experiencing food riots and other violence, and possibly on the brink of collapse. According to the IMF, the economy contracted by 5.7% in 2015 and is expected to diminish by another 8% this year — more, that is, than any other country on the planet. Inflation is out of control, unemployment and crime are soaring, and what little money Venezuela had in its rainy-day account has largely been spent. Only China has been willing to lend it money to pay off its debts. If Beijing chooses to hold back when the next payments come due this fall, the country could face default. Opposition leaders in the National Assembly seek to oust Maduro and move ahead with various reforms, but the government is using its control of the courts to block such efforts, and the nation remains in a state of paralysis.
Nigeria: Continuing Disorder
Nigeria possesses the largest oil and natural gas reserves in sub-Saharan Africa. The exploitation of those reserves has long proved immensely profitable for foreign companies like Royal Dutch Shell and Chevron and also for well-connected Nigerian elites. Very little of this wealth, however, has trickled down to those living in the Niger Delta region in the south of the country where most of the oil and gas is produced. Opposition to the central government in Abuja, the capital, to which the oil income flows, has long been strong in the Delta, leading to periodic outbursts of violence. Successive federal administrations have promised a more equitable allocation of oil revenues, but a promise this has remained.
From 2006 to 2009, Nigeria was wracked by an insurgency spearheaded by the Movement for the Emancipation of the Niger Delta, a militant group seeking to redirect oil revenues to the country’s impoverished southern states. In 2009, when President Umaru Musa Yar’Adua offered the militants an amnesty and monthly cash payments, the insurgency died down. His successor, Goodluck Jonathan, a southerner, promised to respect the amnesty and channel more funds to the region.
For a while, high oil prices enabled Jonathan to make good on some of his promises, even as entrenched elites in Abuja continued to pocket a substantial percentage of the country’s petroleum income. When prices began to plummet, however, he was confronted with mounting challenges. Pervasive corruption turned people against the government, feeding recruits into Boko Haram, the terror movement then growing in the country’s northern reaches; money intended for soldiers in the Nigerian army disappeared into the pockets of military elites, subverting efforts to fight the insurgents. In national elections held a year ago, Muhammadu Buhari, a former general who vowed to crack down on corruption, rescue the economy, and defeat Boko Haram, took the presidency from Jonathan.
Since assuming office, Buhari has demonstrated a grasp of Nigeria’s structural weaknesses, especially its overwhelming dependency on oil monies, along with a determination to overcome them. As promised, he has launched a serious crackdown on the sort of corruption that is a commonplace feature of petro-states, firing officials accused of blatant thievery. At the same time, he has stepped up military pressure on Boko Haram, for the first time putting a crimp in that group’s brutal activities. Crucially, he has announced plans to diversify the economy, placing more emphasis on agriculture and non-fossil-fuel-related industries, which might, if pursued seriously, help diminish Nigeria’s increasingly disastrous reliance on oil.
In the cold light of day, however, the country still needs those oil revenues for the lion’s share of its income, which means that in the current low-price environment it has ever less money to fight Boko Haram, pay for social services, or pursue alternative investment schemes. In addition, Buhari has been accused of disproportionately targeting southerners in his fight against corruption, sparking not just fresh discontent in the Delta region but the rise of a new militant group — the Niger Delta Avengers — that poses a threat to oil production. On May 4th, the Avengers attacked an offshore oil platform operated by Chevron and the Nigerian National Petroleum Corporation, forcing the companies to shut down production of about 90,000 barrels per day. Add that to other insurgent attacks on the country’s oil infrastructure and the Nigerian government is expected to lose $1 billion in May alone. If repairs are not completed on time, it may lose an equal amount in June. It remains a nation on edge, in danger of devastating impoverishment, and with few genuine alternatives available.
Saudi Arabia: Seeking a New Vision
With the world’s second largest reserves of oil, Saudi Arabia is also the planet’s leading producer, pumping out a staggering 10.2 million barrels daily. Originally, those massive energy reserves were owned by a consortium of American companies operating under the umbrella of the Arabian-American Oil Company (Aramco). In the 1970s, however, Aramco was nationalized and is now owned by the Saudi state — which is to say, the Saudi monarchy. Today, it is the world’s most valuable company, worth by some estimates as much as $10 trillion (10 times more than Apple), and so a source of almost unimaginable wealth for the Saudi royal family.
For decades, the country’s leadership pursued a consistent political-economic business plan: sell as much oil as possible and use the proceeds to enrich the numerous princes and princesses of the realm; provide lavish social benefits to the rest of the population, thereby averting popular unrest of the “Arab Spring” variety; finance the ultra-conservative Wahhabi clergy so as to ensure its loyalty to the regime; finance like-minded states in the region; and put aside money for those rainy-day periods of low oil prices.
Saudi leaders have recently come to recognize that this plan is no longer sustainable. In 2016, the Saudi budget has, for the first time in recent memory, moved into deficit territory and the monarchy has had to cut back on both its usual subsidies to and social programs for its people. Unlike the Venezuelans or the Nigerians, the Saudi royals socked away enough money in the country’s sovereign wealth fund to cover deficit spending for at least a couple of years. It is now, however, burning through those funds at a prodigious rate, in part to finance a brutal and futile war in Yemen. At some point, it will have to sharply curtail government spending. Given the youthfulness of the Saudi population — 70% of its citizens are under 30 — and its long dependence on government handouts, such moves could, in the view of many analysts, lead to widespread civil unrest.
Historically, Saudi leaders have been slow to initiate change. But recently, the royal family has defied expectations, taking radical steps to prepare the country for a transition to what’s being termed a post-petroleum economy. On April 25th, the powerful Deputy Crown Prince, Mohammed bin Salman, unveiled “Saudi Vision 2030,” a somewhat hazy blueprint for the kingdom’s economic diversification and modernization. Prince Mohammed also indicated that the country will soon begin to offer public shares in Saudi Aramco, with the intention of raising massive funds to invest in and create non-oil-related Saudi industries and revenue streams. On May 7th, the monarchy also abruptly dismissed its long-serving oil minister, Ali al-Naimi, and replaced him with the head of Saudi Aramco, Khalid al-Falih, a figure deemed more subservient to Prince Mohammed. Falih’s job title was also changed to minister of energy, industry, and mineral resources, which was (so the experts speculated) a signal from the monarchy of its determination to move beyond exclusive reliance on oil as a source of income.
This is all so unprecedented that there is no way of predicting whether the Saudi royals are actually capable of bringing anything like Saudi Vision 2030 to fruition, no less moving away in a serious fashion from its reliance on oil. Many obstacles remain, including the possibility that jealous royals will push Prince Mohammed (and his vision) aside when his father, King Salman, now 80, passes from the scene. (There are regular rumors that some members of the royal family resent the meteoric rise of the 31-year-old prince.) Nevertheless, his dramatic statements about the need to diversify the kingdom’s economy do show that even Saudi Arabia — the petro-state par excellence — now recognizes that some kind of new identity is now a necessity.
The Stakes for Us All
You may not live in a petro-state, but that doesn’t mean you don’t have a stake in the evolution of this unique political life form. From at least the “oil shock” of 1973, when the Arab OPEC members announced an “oil boycott” against the U.S. for its involvement in the Yom Kippur War, such countries have played an outsized role on the world stage, distorting international relations, and — in the Greater Middle East — involving themselves (and their financial resources) in one conflict after another from the Iran-Iraq War of 1980-1988 to the wars in Yemen and Syria today.
Their fervent support for and financing of favored causes — whether it be Wahhabism and associated jihadist groups (Saudi Arabia), anti-Westernism (Russia), or the survival of the Assad regime in Syria (Iran) — has provoked widespread disorder and misery. It will hardly be a tragedy if a lack of funds forces such states to pull back from efforts of this sort. But given the centrality of fossil fuels to our world for the last century or more, the chaos that could ensue in the oil heartlands of the planet from low oil prices and high supply is likely to create unpredictable new nightmares of its own.
And the greatest nightmares of all lurk not in any of this but in the inability of these states and those they supply to liberate themselves from reliance on fossil fuels fast enough. Looking into the future, the demise of petro-states as we’ve known them could have a profound impact on the struggle to avert catastrophic climate change. Although these states are not primarily responsible for the actual combustion of fossil fuels — that’s something we in the oil-importing countries must take responsibility for — their pivotal role in fueling the global petroleum economy has made them largely resistant to international efforts to curb emissions of carbon dioxide. As they try to repair their busted business model or collapse under the weight of its failures, we can only hope that the path they follow will entail significantly less dependence on oil exports as well as a determination to speed up the conclusion of the fossil fuel era and so diminish its legacy of climate disaster.
Copyright 2016 Michael T. Klare
The Desperate Plight of Petro-States
Sunday, April 17th was the designated moment. The world’s leading oil producers were expected to bring fresh discipline to the chaotic petroleum market and spark a return to high prices. Meeting in Doha, the glittering capital of petroleum-rich Qatar, the oil ministers of the Organization of the Petroleum Exporting Countries (OPEC), along with such key non-OPEC producers as Russia and Mexico, were scheduled to ratify a draft agreement obliging them to freeze their oil output at current levels. In anticipation of such a deal, oil prices had begun to creep inexorably upward, from $30 per barrel in mid-January to $43 on the eve of the gathering. But far from restoring the old oil order, the meeting ended in discord, driving prices down again and revealing deep cracks in the ranks of global energy producers.
It is hard to overstate the significance of the Doha debacle. At the very least, it will perpetuate the low oil prices that have plagued the industry for the past two years, forcing smaller firms into bankruptcy and erasing hundreds of billions of dollars of investments in new production capacity. It may also have obliterated any future prospects for cooperation between OPEC and non-OPEC producers in regulating the market. Most of all, however, it demonstrated that the petroleum-fueled world we’ve known these last decades — with oil demand always thrusting ahead of supply, ensuring steady profits for all major producers — is no more. Replacing it is an anemic, possibly even declining, demand for oil that is likely to force suppliers to fight one another for ever-diminishing market shares.
The Road to Doha
Before the Doha gathering, the leaders of the major producing countries expressed confidence that a production freeze would finally halt the devastating slump in oil prices that began in mid-2014. Most of them are heavily dependent on petroleum exports to finance their governments and keep restiveness among their populaces at bay. Both Russia and Venezuela, for instance, rely on energy exports for approximately 50% of government income, while for Nigeria it’s more like 75%. So the plunge in prices had already cut deep into government spending around the world, causing civil unrest and even in some cases political turmoil.
No one expected the April 17th meeting to result in an immediate, dramatic price upturn, but everyone hoped that it would lay the foundation for a steady rise in the coming months. The leaders of these countries were well aware of one thing: to achieve such progress, unity was crucial. Otherwise they were not likely to overcome the various factors that had caused the price collapse in the first place. Some of these were structural and embedded deep in the way the industry had been organized; some were the product of their own feckless responses to the crisis.
On the structural side, global demand for energy had, in recent years, ceased to rise quickly enough to soak up all the crude oil pouring onto the market, thanks in part to new supplies from Iraq and especially from the expanding shale fields of the United States. This oversupply triggered the initial 2014 price drop when Brent crude — the international benchmark blend — went from a high of $115 on June 19th to $77 on November 26th, the day before a fateful OPEC meeting in Vienna. The next day, OPEC members, led by Saudi Arabia, failed to agree on either production cuts or a freeze, and the price of oil went into freefall.
The failure of that November meeting has been widely attributed to the Saudis’ desire to kill off new output elsewhere — especially shale production in the United States — and to restore their historic dominance of the global oil market. Many analysts were also convinced that Riyadh was seeking to punish regional rivals Iran and Russia for their support of the Assad regime in Syria (which the Saudis seek to topple).
The rejection, in other words, was meant to fulfill two tasks at the same time: blunt or wipe out the challenge posed by North American shale producers and undermine two economically shaky energy powers that opposed Saudi goals in the Middle East by depriving them of much needed oil revenues. Because Saudi Arabia could produce oil so much more cheaply than other countries — for as little as $3 per barrel — and because it could draw upon hundreds of billions of dollars in sovereign wealth funds to meet any budget shortfalls of its own, its leaders believed it more capable of weathering any price downturn than its rivals. Today, however, that rosy prediction is looking grimmer as the Saudi royals begin to feel the pinch of low oil prices, and find themselves cutting back on the benefits they had been passing on to an ever-growing, potentially restive population while still financing a costly, inconclusive, and increasingly disastrous war in Yemen.
Many energy analysts became convinced that Doha would prove the decisive moment when Riyadh would finally be amenable to a production freeze. Just days before the conference, participants expressed growing confidence that such a plan would indeed be adopted. After all, preliminary negotiations between Russia, Venezuela, Qatar, and Saudi Arabia had produced a draft document that most participants assumed was essentially ready for signature. The only sticking point: the nature of Iran’s participation.
The Iranians were, in fact, agreeable to such a freeze, but only after they were allowed to raise their relatively modest daily output to levels achieved in 2012 before the West imposed sanctions in an effort to force Tehran to agree to dismantle its nuclear enrichment program. Now that those sanctions were, in fact, being lifted as a result of the recently concluded nuclear deal, Tehran was determined to restore the status quo ante. On this, the Saudis balked, having no wish to see their arch-rival obtain added oil revenues. Still, most observers assumed that, in the end, Riyadh would agree to a formula allowing Iran some increase before a freeze. “There are positive indications an agreement will be reached during this meeting… an initial agreement on freezing production,” said Nawal Al-Fuzaia, Kuwait’s OPEC representative, echoing the views of other Doha participants.
But then something happened. According to people familiar with the sequence of events, Saudi Arabia’s Deputy Crown Prince and key oil strategist, Mohammed bin Salman, called the Saudi delegation in Doha at 3:00 a.m. on April 17th and instructed them to spurn a deal that provided leeway of any sort for Iran. When the Iranians — who chose not to attend the meeting — signaled that they had no intention of freezing their output to satisfy their rivals, the Saudis rejected the draft agreement it had helped negotiate and the assembly ended in disarray.
Geopolitics to the Fore
Most analysts have since suggested that the Saudi royals simply considered punishing Iran more important than raising oil prices. No matter the cost to them, in other words, they could not bring themselves to help Iran pursue its geopolitical objectives, including giving yet more support to Shiite forces in Iraq, Syria, Yemen, and Lebanon. Already feeling pressured by Tehran and ever less confident of Washington’s support, they were ready to use any means available to weaken the Iranians, whatever the danger to themselves.
“The failure to reach an agreement in Doha is a reminder that Saudi Arabia is in no mood to do Iran any favors right now and that their ongoing geopolitical conflict cannot be discounted as an element of the current Saudi oil policy,” said Jason Bordoff of the Center on Global Energy Policy at Columbia University.
Many analysts also pointed to the rising influence of Deputy Crown Prince Mohammed bin Salman, entrusted with near-total control of the economy and the military by his aging father, King Salman. As Minister of Defense, the prince has spearheaded the Saudi drive to counter the Iranians in a regional struggle for dominance. Most significantly, he is the main force behind Saudi Arabia’s ongoing intervention in Yemen, aimed at defeating the Houthi rebels, a largely Shia group with loose ties to Iran, and restoring deposed former president Abd Rabbuh Mansur Hadi. After a year of relentless U.S.-backed airstrikes (including the use of cluster bombs), the Saudi intervention has, in fact, failed to achieve its intended objectives, though it has produced thousands of civilian casualties, provoking fierce condemnation from U.N. officials, and created space for the rise of al-Qaeda in the Arabian Peninsula. Nevertheless, the prince seems determined to keep the conflict going and to counter Iranian influence across the region.
For Prince Mohammed, the oil market has evidently become just another arena for this ongoing struggle. “Under his guidance,” the Financial Times noted in April, “Saudi Arabia’s oil policy appears to be less driven by the price of crude than global politics, particularly Riyadh’s bitter rivalry with post-sanctions Tehran.” This seems to have been the backstory for Riyadh’s last-minute decision to scuttle the talks in Doha. On April 16th, for instance, Prince Mohammed couldn’t have been blunter to Bloomberg, even if he didn’t mention the Iranians by name: “If all major producers don’t freeze production, we will not freeze production.”
With the proposed agreement in tatters, Saudi Arabia is now expected to boost its own output, ensuring that prices will remain bargain-basement low and so deprive Iran of any windfall from its expected increase in exports. The kingdom, Prince Mohammed told Bloomberg, was prepared to immediately raise production from its current 10.2 million barrels per day to 11.5 million barrels and could add another million barrels “if we wanted to” in the next six to nine months. With Iranian and Iraqi oil heading for market in larger quantities, that’s the definition of oversupply. It would certainly ensure Saudi Arabia’s continued dominance of the market, but it might also wound the kingdom in a major way, if not fatally.
A New Global Reality
No doubt geopolitics played a significant role in the Saudi decision, but that’s hardly the whole story. Overshadowing discussions about a possible production freeze was a new fact of life for the oil industry: the past would be no predictor of the future when it came to global oil demand. Whatever the Saudis think of the Iranians or vice versa, their industry is being fundamentally transformed, altering relationships among the major producers and eroding their inclination to cooperate.
Until very recently, it was assumed that the demand for oil would continue to expand indefinitely, creating space for multiple producers to enter the market, and for ones already in it to increase their output. Even when supply outran demand and drove prices down, as has periodically occurred, producers could always take solace in the knowledge that, as in the past, demand would eventually rebound, jacking prices up again. Under such circumstances and at such a moment, it was just good sense for individual producers to cooperate in lowering output, knowing that everyone would benefit sooner or later from the inevitable price increase.
But what happens if confidence in the eventual resurgence of demand begins to wither? Then the incentives to cooperate begin to evaporate, too, and it’s every producer for itself in a mad scramble to protect market share. This new reality — a world in which “peak oil demand,” rather than “peak oil,” will shape the consciousness of major players — is what the Doha catastrophe foreshadowed.
At the beginning of this century, many energy analysts were convinced that we were at the edge of the arrival of “peak oil”; a peak, that is, in the output of petroleum in which planetary reserves would be exhausted long before the demand for oil disappeared, triggering a global economic crisis. As a result of advances in drilling technology, however, the supply of oil has continued to grow, while demand has unexpectedly begun to stall. This can be traced both to slowing economic growth globally and to an accelerating “green revolution” in which the planet will be transitioning to non-carbon fuel sources. With most nations now committed to measures aimed at reducing emissions of greenhouse gases under the just-signed Paris climate accord, the demand for oil is likely to experience significant declines in the years ahead. In other words, global oil demand will peak long before supplies begin to run low, creating a monumental challenge for the oil-producing countries.
This is no theoretical construct. It’s reality itself. Net consumption of oil in the advanced industrialized nations has already dropped from 50 million barrels per day in 2005 to 45 million barrels in 2014. Further declines are in store as strict fuel efficiency standards for the production of new vehicles and other climate-related measures take effect, the price of solar and wind power continues to fall, and other alternative energy sources come on line. While the demand for oil does continue to rise in the developing world, even there it’s not climbing at rates previously taken for granted. With such countries also beginning to impose tougher constraints on carbon emissions, global consumption is expected to reach a peak and begin an inexorable decline. According to experts Thijs Van de Graaf and Aviel Verbruggen, overall world peak demand could be reached as early as 2020.
In such a world, high-cost oil producers will be driven out of the market and the advantage — such as it is — will lie with the lowest-cost ones. Countries that depend on petroleum exports for a large share of their revenues will come under increasing pressure to move away from excessive reliance on oil. This may have been another consideration in the Saudi decision at Doha. In the months leading up to the April meeting, senior Saudi officials dropped hints that they were beginning to plan for a post-petroleum era and that Deputy Crown Prince bin Salman would play a key role in overseeing the transition.
On April 1st, the prince himself indicated that steps were underway to begin this process. As part of the effort, he announced, he was planning an initial public offering of shares in state-owned Saudi Aramco, the world’s number one oil producer, and would transfer the proceeds, an estimated $2 trillion, to its Public Investment Fund (PIF). “IPOing Aramco and transferring its shares to PIF will technically make investments the source of Saudi government revenue, not oil,” the prince pointed out. “What is left now is to diversify investments. So within 20 years, we will be an economy or state that doesn’t depend mainly on oil.”
For a country that more than any other has rested its claim to wealth and power on the production and sale of petroleum, this is a revolutionary statement. If Saudi Arabia says it is ready to begin a move away from reliance on petroleum, we are indeed entering a new world in which, among other things, the titans of oil production will no longer hold sway over our lives as they have in the past.
This, in fact, appears to be the outlook adopted by Prince Mohammed in the wake of the Doha debacle. In announcing the kingdom’s new economic blueprint on April 25th, he vowed to liberate the country from its “addiction” to oil.” This will not, of course, be easy to achieve, given the kingdom’s heavy reliance on oil revenues and lack of plausible alternatives. The 30-year-old prince could also face opposition from within the royal family to his audacious moves (as well as his blundering ones in Yemen and possibly elsewhere). Whatever the fate of the Saudi royals, however, if predictions of a future peak in world oil demand prove accurate, the debacle in Doha will be seen as marking the beginning of the end of the old oil order.
Copyright 2016 Michael T. Klare