Russia’s monthly revenues from oil exports rose by $1.7 billion to $15 billion in April, the International Energy Agency reported this week.
The combination of shipments to China and India, which are taking about 80% of Russian oil, and of sanctions-avoiding tricks by European and other shipping companies, means that the western powers’ price cap on Russian oil is causing few problems.
The IEA’s monthly Oil Market Report showed that in March, Russian oil exports were at 8.1 million barrels per day (bpd), their highest level since April 2020. In April they went up even further, to 8.3 million bpd.
School students march with Fridays for Future Germany, in a joint action with public transport workers demanding action on climate change, and collective bargaining rights and investment in public transport, on 3 March 2023. Photo from FFF Germany twitter feed
What is going on, 15 months after Russia’s murderous full-scale invasion of Ukraine?
In this article – based on a talk I gave at the Berlin School of Economics and Law last week – I look at (i) the background, (ii) oil and sanctions, (iii) gas and the Kremlin’s self-sanctioning, and (iv) what this all means in terms of cutting fossil fuel use and climate policy.
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1. Background
The character of the war
To understand the economic aspects of this biggest military conflict in Europe since the second world war, we need to understand its political character.
The primary target of the Russian military operation is Ukraine’s civilian population – and, to underline this, it’s worth summarising the main points from the Organisation for Security and Cooperation in Europe’s Office for Democratic Institutions and Human Rights interim report (December 2022).
The actions by the Russian Federation that “may amount to war crimes and crimes against humanity” included:
□ “Repeated and apparently indiscriminate strikes in densely populated areas using explosive weapons with wide area effects, resulting in widespread civilian death and injury”;
□ “Devastating and intensified attacks reportedly carried out against civilian infrastructure, […] resulting in high numbers of civilian casualties and loss of access to critical infrastructure for millions”.
This article by ROB CALLENDER of Jubilee Climate has been discussed widely among Extinction Rebellion (XR) members. It starts with a message responding to a facebook post by Roger Hallam, one of the founders of XR. It is published here with Rob’s permission. Answers to the question at the end – “what do you think?” – are welcome.
Dear Roger, Just stop using white power narratives and white power tactics with a white power vision of how to tackle a crisis that was made by white power. It will fail. Again. We can’t afford to keep failing. It is likely to make things worse for many many people, if not for you, and that is horrifying to have on your hands. Yes, your hands. We need to do the hard work. You’re distracting and dividing people. Hang up your ego and get involved. Love, Rob
WHITE POWER FORGETS
Many within environmental movements like Extinction Rebellion are unconscious of how white power has characterised these movements’ tactics and strategies. It is why we are failing, and why we will continue to fail unless we learn and evolve.
If oil is stopped, then what? The climate crisis will not have gone away. We are struggling against a monstrous hydra with many many vicious heads, all destroying ecosystems and the liveable climate. We need to strike at the root, the heart of the monster, not at one single element. Greenpeace has had many campaigns, some daring and with success. But Greenpeace is now 50 years old. We don’t have 50 more years. After oil, then what?
Demonstrators in London demanding reparations to the global south for ecocide and genocide (maangamizi) by rich countries. Photo by Andrea Domeniconi/Alamy Live News
After every action, movement and rebellion, some fill the pause with strategising. Every time a single conversation that dominates others has gone something like this: “we haven’t got the narrative right, it’s not appealing to ‘the people’, because we’re using leftist jargon and talking about ‘justice’. We need to have a vision of what the future will look like for ordinary people – a nation they can buy into and want to build – it needs a sense of let’s all come together now to fix the climate for our children and grandchildren”. Sound good?
This is white power. People shaped by white power live in a loop in which they believe that their vision, this time, must succeed, if only everyone got behind it. Their conviction comes from the privileged lived experience of whiteness which brings them closer to the establishment and a reformist mindset (despite what they say and the vehemence of the tactics they employ) and farther from communities outside of the establishment. The powerful conviction coming from the individual person creates obliviousness, forgetfulness – amnesia.
No sooner had politicians signed the Glasgow Climate Pact in November, than the US government paved the way for new oil and gas output, by selling $191 million of new drilling licences.
The sale came after the Joe Biden administration’s moratorium on new drilling was overturned in the courts. Earthjustice said the sale was a “climate bombshell”: if all that production goes ahead, an extra 600 million tonnes of carbon dioxide goes into the atmosphere.
On the plus side, the UK’s biggest new oil project, Cambo, suffered a blow, as Shell pulled out, after forceful mobilisation by climate campaigners. Siccar Point Energy, which owns 70% of the project, then said it is pausing work.
Extinction Rebellion in London, September 2020. Photo by Steve Eason
Cambo could still go ahead, though, and if it does, that will be thanks in part to the UK’s lavish tax breaks for North Sea producers. Siccar Point says the project is “not forecasted to pay taxes for many years”.
The company-friendly tax regime means that in 2020 the treasury collected a paltry £255 million from oil and gas producers, while handing rebates of £39 million to BP and £110 million to Shell.
These tax breaks are just one part of a multi-billion-dollar mountain of subsidies for fossil fuel producers from rich countries’ governments.
And those subsidies form the background to COP26’s failure to tackle global heating, and to the decisions made there, which Climate Action Tracker estimates will lead to 2.1-2.7 degrees of warming, far above the 1.5 degree target.
TERRY BROTHERSTONE reviews Crude Britannia: How Oil Shaped a Nation, by James Marriott and Terry Macalister (London, Pluto Press, 2021)
Even Alok Sharma – Boris Johnson loyalist, former Tory cabinet minister, now president of the COP 26 UN climate summit in Glasgow in November – says he recognises it: the planet is in the last-chance saloon. Indeed, the scientists on the Intergovernmental Panel on Climate Change (IPCC) warn, the clock – to borrow George Orwell’s opening to 1984 – has already struck thirteen. “Human activity,” reported The Guardian,“is changing the Earth’s climate in ways unprecedented in … hundreds of thousands of years”: some potentially disastrous consequences are “inevitable and ‘irreversible’”.
Only the worst effects can now be alleviated, and that only by decisive action drastically to reduce greenhouse gas emissions. Without a serious move to end reliance on fossil fuels, human society as we know it faces extinction. And, argues this book, Britain is a nation the modern existence of which has been shaped by oil. What hope is there for the future?
The publication of Crude Britannia: How Oil Shaped a Nation is timely indeed. That James Marriott and Terry Macalister had fun researching it resonates in their writing, but it must have been hard work too. It took them about three years longer than planned, when the instability that afflicted Britain in the years following the 2007-09 financial crash prompted their project. The effects of austerity; the near-miss 2014 Scottish independence referendum that raised the now immanent possibility that the 314-year-old union with England could end, and with it the fragile constitutional underpinnings of the United Kingdom; “Brexit”; growing fears of climate catastrophe … it all made the nation look unprecedentedly insecure.
A protest against new oil field development in Scotland. Photo by Craig Maclean
Experts in their different ways in the central socio-economic role of oil in the modern world, Marriott and Macalister decided to investigate the part it had played in holding the Britain of recent decades together – and is now playing in tearing it apart. They would travel the country, researching its post-World-War-II relationship with the industry. Then, as they were reaching their journey’s end, the Covid-19 pandemic dealt the final blow to what to them – children, as they introduce themselves, of the years in which oil replaced coal in the engine-room of British prosperity and sustained the underlying certainties of the country’s political economy and social life – had seemed an “era of optimism”. They “had spent [their] lives writing on the oil and gas industry and its impacts around the world”, and now wanted to understand “what was its role … in Britain’s turbulence?”
Marriott and Macalister make an ideal pair to ask the question, and they have devised an entertaining, instructive and original way of starting serious debate about answering it. The delay in their publication plans, moreover, means that their book has arrived at an opportune moment. The protest movement is gathering momentum, notably in London against the Science Museum’s acceptance of Shell’s “greenwashing” sponsorship for its “Future of the Planet” exhibition and, in Scotland, against further North Sea oil exploitation, in the first place of the Cambo field, west of Shetland. And planning is well underway for major demonstrations at the COP 26 summit that the smooth and well-travelled (although never-quarantined) Sharma is scheduled to chair in Glasgow in November – described by Kevin McKenna in TheHerald (Glasgow) recently as an exercise in entrusting “our climate recovery … to the sector chiefly responsible for creating it … the planet’s chief pollutant: global capitalism.”
Macalister, now Senior Research Fellow at Wolfson College, Cambridge and a freelance journalist, was for some years Energy Editor at The Guardian – a position in which he clearly formed working relationships with key figures in the oil industry, access to whom adds important insights to Crude Britannia. Interviewees include senior politicians such as Michael Heseltine and “Green Deal” Corbynite, Rebecca Long-Bailey; and chief executives such as Royal Dutch Shell’s Bernardus (or “Ben”) van Beurden, and John, Baron Browne of Madingley. Browne was British Petroleum’s chief executive from 1995 until 2007, and his shape-shiftingly image-conscious, but never less than ruthless, career punctuates the story at key moments. His 41 years with BP ended following the revelation that he had lied about his personal life in a sworn court deposition. Now a cross-bench peer, he emerges as one of the key business figures in the “new Labour” years. His ultimately unsuccessful attempts to rebrand BP as “Beyond Petroleum” with a sun-god logo, dovetailed well with premier Tony Blair’s short-lived “third way”, capitalism-with-a-human-face ideology.
More than 60,000 Iranian oil workers have joined a strike for better pay and contracts – the biggest such action since the general strike of 1978-79 that helped toppled the Shah’s regime.
The stoppage is supported by teachers, pensioners, and families seeking justice for their relatives killed during the big wave of protests in November 2019.
The protest began on 19 June, the day after the elections won by the conservative cleric Ebrahim Raisi, who takes over as president next month.
The Iranian oil industry is dominated by the state-owned National Iranian Oil Company. But in recent years it has employed a host of contractors – many owned and controlled by state officials and their relatives – who have slashed pay levels and undermined working conditions.
Striking workers at a refinery, late June
The Strike Organisation Council for Oil Contract Workers, that has been set up during the action, is reported to have said that the workers’ main demand is higher wages, and added:
We will no longer tolerate poverty, insecurity, discrimination, inequality and deprivation of our basic human rights. Given the skyrocketing cost of expenses, the [monthly] wages of workers should not be less than 12 million tomans ($491).
The strikers are demanding the elimination of temporary contracts, an end to the use of contract companies and the recognition of the right to form independent unions, according to other reports.
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