Carbon Democracy by Timothy Mitchell

Introduction:
-Fossil fuels create modern democracy and its limits.
-One limit is distinctive feature of middle east and its lack of democracy.
-Countries that depend on petroleum exports tend to be less democratic.
-”Oil curse”
-Common reason is surplus revenue from oil money gives government resources to repress dissent, buy political support or relieve pressures for more equal sharing of prosperity with handouts and price subsidies.
But that is not the case.
Book is concerned with intransigent engagements and which ways carbon energy helped manufacture forms of agency capable of effective intransigence.
Relation between democracy and oil.

New discoveries of oil unable to keep pace with exhaustion of existing supplies. Declining supplies period. Earth’s stores of fossil fuels will not be exhausted but as they become more scarce difficulty in extracting them increases, cost and expenditure of energy in their extraction will bring era of fossil fuels to an end

Summary of chapters Chapter 1: Democratic politics developed from steam power accessing seams of deep underground coal → coal → development of large-scale manufacturing and modern city → mines, factories, modern urban life → struggle for democracy
Actually movement of concentrated stores of carbon energy provided means for assembling effective democratic claims.
Chapter 2: Having learned from history of coal and democracy that politics of energy involves acquiring power to interrupt the flow of energy as much as securing its supply… there is a different account. How oil companies collaborated to delay the emergence of an oil industry in the Middle East. Middle eastern oil → making and unmaking of democratic politics
Chapter 3: Different history where a wartime battle for a more democratic control of imperialism and acquisition of raw materials fought by European left, translated into an undemocratic machinery for producing the consent of the governed. IN IRAQ.
Chapter 4: How political forces in Iraq and other parts of ME responded. How control over oil reserves of Iraq was forged.

Chapter 1:
Newcomen’s atmospheric pressure steam engine, 1712, coal from mine to produce steam that drove a vacuum pump and enable miners to extend the workings deep underground using less energy and they produced.Inefficient.
1775 Boulton and Watt have an efficient design.

The change from use of wood and other renewable energy sources to the use of coal underlies the great divergence between development of Europe and that of China/Turkey/India that had yet enjoyed comparable standards of living.

Most of the world’s industrial centres such as Belgium, Ruhr Valley, Upper Silesia were adjacent to coal supplies. Waterways and rail networks move concentrated carbon stores from underground coalface to surface to railways to ports to cities and to sites of manufacturing and electrical power generation.

Power of workers in infrastructure at the end-points and main junctions of these conduits, cutting equipment operations, lifting machinery, switches, locomotives, etc. gave them the political power to disrupt or cut off supply of energy. Between 1881 and 1905, coal miners in the US went on strike at about 3x the average for workers in all major industries and at double the rate of the next highest industry: tobacco mining.
Before 20th Century, role of oil was for oil lamps in the form of kerosene and to provide lubricants for machinery. Still a big industry.
By the 1890s steam-powered percussion drills had replaced the hand-digging of wells, accessing deeper layers of oil-bearing rock and causing a surge in production in the following decade.

Internal combustion engine.
Oil comes to the surface driven by underground pressure either through water trapped beneath it or from gas trapped above, assisted by pump action sometimes. Required smaller workforce than coal mining. Workers remain above ground closer to managerial supervision. Carbon occurs in liquid form, transporting it requires less human labour. Pumping stations and pipelines replace railway as means of transporting energy from site of production to use/abroad shipment. Did not require teams of humans to accompany the fuel on its journey to load and unload at each junction or the continuous operations of engines, switches and signals. Oil pipelines INVENTED in Pennslyvania in the 1860s to circumvent wage demands of teamsters transporting barrels of oil to the rail depots in horse-drawn wagons, in order to reduce the ability of humans to interrupt flow of energy. Baku borrowed the same innovation the following decade. Despite the attacks on them by revolutionaries, pipelines more difficult to incapacitate than railways that carried coal.

Producing scarcity
In both coal and oil industries, producers sought to avoid competition as it destroyed profits. In case of coal, high cost of transporting supplies across oceans ensured that producers faced competition only within their own region. They avoided competition either by forming cartels as in France, Germany, US, or creating organisations to regulate price and production. ECSC…Meanwhile in Britain, producers ruined eachother through competition and in 1946 were taken over by the state.

Oil companies face larger difficulties in avoiding competition as with bulk oil tanker in 1890s, controlling production and distribution in one region was not enough. Oil could easily travel between continents, petroleum companies were vulnerable to arrival of cheaper oil from elsewhere.

After 2nd world war when significant quantities of oil began to flow from ME after a ½ century of its discovery there, further devices added to this machinery for the production of scarcity. Collaboration of local governments such as the Saudis in restricting flow of oil and US antagonism towards those who tried to increase its supply, was organised as though it was a system for protecting a scarce resource against others.

Chapter 2
-Oil was already known to exist in more convenient places in the ME than Persia
-Principal reason for searching in barren hills of Persia was to delay development of ME oil industry, not launch it.

Main feature of ME oil was that there was too much in too few locations.
With coal, the firms had to share the power to restrict the availability with workers who miners and transported it, along with other firms. Oil workers could not carry out a successful sabotage. Oil firms have camps and teams of engineers. New rotary drilling equipment replacing percussion drills and could penetrate thousands of feet below ground.
3 firms dominate supply.
-Royal Dutch in Sumatra
-Burmah Oil in Rangoon
-Nobel Brothers in Baku
Shell transportation company expanded in 1890s by transporting oil in bulk with ocan-going tankers.

Mellons control Gulf Oil
Rockefeller Family controlling Standard Oil began by refining oil using new faster refining techniques using large quantities of steam power generated by fuel oil from the refinery. Then controlled pipelines and shipping routes, finally in charge of distribution with storage tanks worldwide.
Large reserve of oil found in mosul, Deutsche bank moved ahead with plans to ensure oil from this lake was unable to reach European markets where it would threaten its large investments in Romanian oil.
Shell wanted the same in Egypt

Chapter 3
WW1 first great carbon-fuelled conflict. Coal fired factories produced munitions, armaments and motor-driven vehicles. Removed 2 major sites – Mexico and Russia from large corporate control. International oil firms responded by trying to deprive state-controlled oilfields of investment and markets. Curtailing their production eased problem of curbing the global supply of oil. Competition locked into Iraq.

Chapter 5
Petroleum became largest commodity in world trade. In 1945, US produced two-thirds of world’s oil, 1/6 produced in Latin America/Caribbean. Sterling Oil traded in pounds, but bulk of global sales in “Dollar Oil”. Value of the dollar as the basis of international finance depended on the flow of oil.
In Egypt Feb 1945, special relationship with Saudi Arabia and US. ARAMCO.

Chapter 6
As the Middle East replaced Latin America as the world’s second most productive oil region after the US, the possibilities for local disruption increased.
Mossadegh government nationalised assets of AIOC → Britihs blockade exports from Abadan refinery → Economic crisis → Anglo-American organised coup of August 1953 → Restored Shah autocracy

Since early 1930s, world oil prices govened by international oil companies which attemtped to limit supply of oil from the mdidle east in collaboration with a system of govt production quotas and import controls in the US. Overseas, cartel agreement made “the seven” in 1928 against soviet oil offensive and large discoveries in iraq established exclusive territories for each company and set quotas intended to maintain world prices at the level of US prices. US domestic productionr egulated by 1932 Texas Railroad Commission. As production in ME began to increase, it threatened to lower price of oil so US Oil Policy Committee established import quotas, 9% of domestic demand. Domestic production expands despite the availability of oil at much lower costs of production in ME. As a result, American oil reserves exhausted more quickly than those of other regions. By 1971, US prodction began to decline. Declining production + rising demand meant US no longer had surplus capacity required to regulate prices.
In 1960, in response to drop in demand for non-US oil caused by Eisenhower’s import quotas, Venzuela, KSA, Kuwait, Iraq and Iran set up the OPEC. Aim to negotiate an increased share of oil revenues and conserve supplies allowing for an orderly process of economic growth and avoiding a premature depletion of reserves.

Chapter 7
1973-74 Oil Crisis brought an era of generally improving conditions of life in many parts of the world to an end. Confirmed collapse of post-second world war sstem for managing international finance and a transfer in the management of oil pricing to the producer countries, which obtained a greatly increase income from its production. Government with oil revenues built militarised states while those without built debts, as Western banks awash with petrodollars recycled them into risky loans to financially weakened governments. In industrialised countries, powers of labour replaced with neoliberal laws of the market as control.

1973 War → Six Arab oil-producing countries announce a 5-percent cut in supply of oil → promise of 5% more cuts until US stopped obstructing settlement of Israel-Palestine conflict → Fuel price rises Two criticisms used against the classical proof of 1973 OPEC embargo being standard supply and demand
1. Difficult to know how much of price increase was due to cut in Winter 1973-1974. Other ME producers such as Iran increased production. By December, Iraq was producing 7 percent more oil than in the month before embargo. Libya, Algeria and Abu Dhabi took advantage of higher prices to raise production after a brief cutback, maintaining overall supply. Since none of these countries provided information on how much oil they produced, it was impossible to know how far the total world supply had gone down. Even the figures based on surveillance of tankers leaving the six main oil terminals of the ME – standard method of estimating global oil supply – were in dispute. Equal uncertainty about price of oil. For fifty years, oil companies worked to prevent the creation of a market price for crude oil, so no place/publication/regular mechanism of exchange for determining ongoing price.
2. The embargo never even happened. Other factors contributed to sharp increase in oil prices. In US congress, leader of militarist wing of DP opposed to peace settlement in ME introduced emergency legislation requiring mechanisms for fuel rationing and reducing country’s oil consumption. Panic by commercial users of petrol, unnerved by public discussions of Arab embargo.
3. Most users cannot easily switch to alternative sources of energy, so oil is often assumed to have low elasticity of demand. In fact, in many circumstances oil enjoys a reverse elasticity of demand as prices go up, people by more. Demand for oil unlinked to its price.

Reason for 1973 War, lack of US engagement with peace processes in ME -US refused to support 1971 Peace Proposal when Sadat had abandoned principle of Israel agreeing to comprehensive settlement of Palestinian rights addressing expulsion/disposession, instead offering a bilateral arranegemtn to restore 1967 borders.
-July 1972 Egyptian decision to expel Soviet military advisers helping operate air defence systems in expectation of improved relations with Washington produced no US response.
-Kissinger refused to meet with Hafiz Ismail, later agreeing to talk in secret but rejected Egypt’s proposals for separate peace. -June 1973 Nixon rejects Soviet peace statement proposed by Leonid Brezhnev.
-July 1973 US vetoes Resolution 242 approved by all 14 members of council in UN
Nixon supplied Israel with additional tanks, aircraft, artillery, ammunition to stop Israel from negotiating.

Conclusion Fossil fuels are not about to run out. Afteer 150 years of continuously increasing supply, era of abundnt oil seems to have ended. The world uses up stores of petroleum faster than those who develop them can discover new supplies. Just 110 giant oilfields out of 70,000 produce half the world’s petroleum. Most of the giant ones discovered more than 50 years ago. Many of them, including 16/20 of the largest are in decline, producing less oil each year.