Are all Americans degenerate racists? Will Neymar stay at PSG? How did a
drunk and a gang of thugs take over the Russian state? Is Norway reallya cool country? Why does our electricity bill keep going up? ---- All
these otherwise unrelated questions have one thing in common. That
common thing is gas, the third most widely used energy source in the
world, after oil and coal. From the United States to Qatar, from Gazprom
to Equinor (the Norwegian national gas production company), gas
represents a major economic, social, environmental and geopolitical
issue embodied by the extraction of American shale gas, Qatari and
Russian rents, or even access to and control of the circulation of this
resource with the issue of gas pipelines.
We would therefore like, through a series of articles, to demonstrate to
the readers of Courant Alternatif why and how this energy and the
policies related to it are a cardinal point in globalized capitalism and
therefore in our lives.
"MY ADVICE TO YOUNG PEOPLE, READ KARL MARX."
[1]
If communist theory has one flaw, it is that it is off-putting. Using a
difficult vocabulary, handling mysterious concepts, referring to
controversies unknown to laymen, it quickly turns into gibberish for
those who did not study Marxism LV2 in middle school. As a result,
materialist criticism becomes a theoretical activity reserved for
circles of specialists or academics. However, understanding the world
means giving oneself the means to act and therefore to transform it.
Capitalism being a system based on the production of goods and services,
the question of energy is therefore essential. The energy model is
therefore one of the paradigms of the entire production model created by
capitalism and of the society that results from it. The analysis of all
societies must therefore be based on material causes, considering that
human societies are the product of their activity and that the mode of
production of material life conditions the process of social life.
Let us take the example of coal to illustrate our point. The rise of
coal during the first industrial revolution allowed the exponential
development of British manufacturing, spearheaded by the cotton
industry, which exported worldwide. Coal was used mainly for two
purposes: the essential energy supply for manufacturing and the increase
in material production and the administration of colonial empires, first
and foremost the largest of all, the British Empire. Coal, used in
steamships, was used to ensure commercial and military links by sea, and
these very quickly supplanted sailing. Coal also created a social order:
bourgeois and proletarians, owners of coal mines and miners. These
workers, through the preponderant position they occupied, acquired
political power which materialized in the birth of the first mass
parties and unions. They could thus sometimes reverse the balance of
power against the capitalists by slowing down or disrupting the energy
supply. It was following these struggles that a large number of social
conquests emerged at the turn of the 19th and 20th centuries. This era
of coal was succeeded by the era of oil. The two oil shocks of 1973 and
1979 would call into question the foundations of the oil companies that
emerged from the 20th century with the appearance of mass unemployment,
the collapse of economic growth and changes in imperialist confrontations.
But from the 2000s onwards, the massive exploitation of shale gas in the
United States led to a spectacular fall in energy prices and the revival
of the petrochemical sector.
The United States: The Rebirth of a Global Energy Giant
The cradle of the oil industry, the United States became an importer
dependent on external suppliers during the 20th century. In twenty
years, the United States experienced an energy revolution with the rise
of shale gas and oil, making it the world's leading oil producer. This
revolution put an end to a structural decline thanks to two
technological innovations, hydraulic fracturing and horizontal drilling,
and it opened a new speculative mining cycle. Above all, the United
States became the world's leading producer ahead of Russia and Saudi
Arabia and is now totally independent, particularly from the Middle East
and OPEC, thus upsetting the global geopolitical and geostrategic
balances of the post-war period. It is in this context that Russia
invaded Ukraine in the spring of 2022, leading to sanctions targeting
the hydrocarbon sector in particular. In the medium term, Russia's
withdrawal from the global energy market on the one hand and the
European Union's decoupling of its energy dependence on Russia on the
other, open up new prospects for global energy assertion for the United
States, in particular by renewing on new bases the old transatlantic
geostrategic, geopolitical and geoeconomic link.
The rise of shale gas and oil is part of a long history of the
relationship between hydrocarbons and the United States.
Figure 1. The 3 historical cycles of gas and oil
Three major historical and geostrategic cycles.
To understand the structural nature of current changes, it is necessary
to re-inscribe them in time, starting from the beginning of the 20th
century. Three successive historical periods then appear, visible in
graph 1. They respond to three specific cycles participating in the
integration of the United States into globalization.
Between 1900 and 1970, the great initial boom unfolded during which the
United States' production of hydrocarbons experienced a spectacular
surge. It was the foundation of the country's exceptional economic and
social development and its assertion as an imperial power. For the
record, on the eve of the Second World War, the United States still
produced more than 60% of the world's oil and the embargo decreed on
July 26, 1941 on oil and steel strangled Japan and its Navy, which
responded with the attack on Pearl Harbor on December 7, 1941. When
studying the valorization of a non-renewable resource, it is important
to keep in mind certain orders of magnitude: 259 million barrels per day
were extracted from American deposits during the first seventy years of
the 20th century.
Between 1970 and 2008 came the time of retreat and dependence. The
country switched to a new energy system. Its energy dependence rate
increased from 5% in 1960 to 30% in 2006. Its power and hegemonic
capacities were weakened as a result, as evidenced by the Arab oil
embargo of 1973-1974 decided following the Yom Kippur War. Washington
then became aware of its energy dependence and urgently opened up the
exploitation of conventional fields that were increasingly difficult to
access, while world prices exploded; this was the "oil shock".
Since 2009, the return to autonomy and then independence has prevailed,
this time thanks to a major breakthrough innovation: the spectacular
boom in shale gas and oil. Between 2009 and 2021, oil production doubled
and gas production increased by 71%: never in its history has the
world's leading power produced so much energy. These unconventional
hydrocarbons now account for more than 60% of national oil production
and 70% of natural gas production. This boom has had a definite impact
on the US energy mix: in 2020, oil and gas played a major role in energy
consumption (71% of total production), well ahead of declining coal
(10.4%), struggling nuclear power (8.4%) and still confidential
renewable energies.
The affirmation of a new autonomous energy giant.
Since 2017, the United States has become the world's leading producer of
oil and gas. For gas, the shock is even more pronounced since the
country produced 23.7% of global production in 2020, well ahead of Russia.
This boom has considerable geopolitical and geostrategic consequences.
Not only have the United States become independent because it is
self-sufficient, a major key to its national security at home and its
independence of action abroad, but it has also become a net exporter. In
2020, for the first time since 1949, the United States exported more
hydrocarbons than it imported. In addition, in order to complete its
security of supply, the country has refocused on the American continent
with the signing of the CUSMA agreement (formerly NAFTA) [2]: Canada
supplies it with 52% of its oil imports and Mexico 11%.
It is in this context that the evolution of world prices should be
placed. Thus, between 2015 and 2020, prices fell sharply due to the
battle for market share and price fixing between rival powers: the
Russia/Saudi Arabia duo then sought to break the boom in US shale gas
and oil by trying to bring prices below the break-even point ($40 to
$50/barrel). The post-covid recovery and Russia's invasion of Ukraine in
February 2022 once again upset these balances. Countries producing
mineral, energy and agricultural raw materials are once again benefiting
from the surge in world prices.
The war in Ukraine:
an unexpected opportunity for the transatlantic re-anchoring of the
United States and Europe
The war in Ukraine is disrupting the energy geography, particularly gas,
of the European continent and beyond, the world. In response, Moscow is
facing a series of political, economic and financial sanctions,
particularly in the energy sector, which has been one of the major
vectors of interdependence between the different parts of the European
continent for decades. On March 21, 2022, one month after the start of
the Russian invasion and in connection with the European summit, the
United States and the European Union symbolically announced a vast
energy agreement on liquefied natural gas (LNG). However, Russia remains
a rentier economy, largely financed by the export of raw materials or
semi-finished products; it is essentially focused on Central and Western
Europe.
Graph 2 - Developments in gas transport
However, Europe's energy dependence on Russia, although highly variable
depending on the country, is such that this change is difficult to
achieve immediately. In 2021, Moscow supplied 40% of European gas
imports, or 10% of total energy consumption. In this tense context,
which will take years to resolve, the European Union is turning to
Norway, Algeria, Azerbaijan or the United States... But many of these
suppliers are already at the limits of their production capacities.
Faced with the saturation of existing gas pipelines, Europe is forced to
turn to liquefied natural gas (LNG) delivered across the oceans by LNG
tankers, but it is significantly more expensive.
It will take several years before the United States, if it ever
succeeds, replaces Russia on the European market. Indeed, if they are
attracted by the sharp rise in prices in Europe, US companies must first
reinvest massively on their territory: in production, in removing
logistical bottlenecks due to the inadequacy of gas pipeline networks to
port terminals, in strengthening the capacities of technical export
systems in Europe (floating LNG terminals in Klaipeda in Lithuania, in
Le Havre, etc.)... For Europe, these tensions are accompanied by a sharp
rise in prices, of course on the free markets known as Spot, but just as
much during contract negotiations on the global gas market. Europe is in
fact entering into head-on competition on an already very tense market
with major Asian countries such as Japan, South Korea and China, which
are the largest consumers of LNG in the world.
To be continued in part two: The social and spatial consequences of
shale gas exploitation in the USA .
Notes
[1] Emmanuel Macron, Interview in ELLE magazine May 2017
[2] ACEUM = Canada-United States-Mexico Agreement / NAFTA = North
American Free Trade Agreement
https://oclibertaire.lautre.net/spip.php?article4233
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