Peak Oil, Climate Change, Political Turmoil: The Lesson From Egypt
By Matthew Wild
15 February, 2011
Were the Egyptian people that bravely took to the streets to overthrow a tyrannical regime taking part in the world’s first peak oil revolution?
It seems like out and out hyperbole at first. Hosni Mubarek ran the country in a permanent state of emergency in which he blocked free speech, intimidated anyone perceived as a threat, and operated a blatantly corrupt system that left millions of Egyptians impoverished. Tyrants get overthrown in the end, and the protesters on the streets of Egypt were clearly exercising their right to make a political choice – to remove Mubarak. After all, it’s such a romantic story that we want to buy into it: the disenfranchised youth who outsmarted the government’s spies by tweeting on Facebook to organize a brief, remarkably peaceful rebellion.
Right now, with the country securely in the hands of the military, who have pledged elections in six months’ time, media commentators are talking of happy endings - depending on how happy you are about martial law, that is. But what if there is more to it than that? And what if Egypt’s problems go much deeper? Without wanting to spoil the party, some additional statistics put events in a different light:
* Egypt’s oil peaked in 1996, and with output diminishing 26 per cent since then, the nation is now a net oil importer
* The nation’s debt is around 89.5 per cent of GDP
* Its population – 27.8 million in 1960 and currently estimated at 79.94 million – is set to double each 35 years
* Self-sufficient in food in 1960, the nation is dependent of food imports, which are currently at a record high price
* Prices in Egypt have surged 17 per cent following this worldwide leap in commodity prices (while around 40 per cent of Egypt's citizens live off less than $2 a day).
Here, then, we have a collision between diminishing government revenue, population pressures, poverty, rising food costs and a corrupt political system that was indifferent to anyone outside of the elite. Egypt, formerly an oil exporter that was self-sufficient in food, now imports both – and cannot afford to feed itself.
A telling item in Le Monde Diplomatique, headlined Tunisia, Egypt and the protracted collapse of the American empire, expands on this:
[Egypt’s] oil production peaked in 1996, and since then has declined by around 26 per cent. Since the 1960s, Egypt has moved from complete food self-sufficiency to excessive dependence on imports, subsidized by oil revenues. But as Egypt’s oil revenues have steadily declined due to increasing domestic consumption of steadily declining oil, so have food subsidies, leading to surging food prices. Simultaneously, Egypt’s debt levels are horrendous – about 80.5 per cent of its GDP, far higher than most other countries in the region [the more recent figure is 89.5 per cent]. Inequality is also high, intensifying over the last decade in the wake of neoliberal ‘structural adjustment’ reforms – widely implemented throughout the region since the 1980s with debilitating effects, including contraction of social welfare, reduction of wages, and lack of infrastructure investment. Consequently, today forty per cent of Egyptians live below the UN poverty line of less than £2 a day.
With politicians and the media sticking to the fairytale story, recent comments by US Secretary of State Hilary Clinton about a "perfect storm" of unrest running through the Middle East seem particularly frank. Referring to protests in Tunisia, Jordan, Yemen and Egypt, she spoke of the “strategic necessity” for democratic change. According to the BBC:
She said that with water shortages and oil running out, governments may be able to hold back the tide of change for a short while but not for long.
"Some leaders may believe that their country is an exception - that their people will not demand greater political or economic opportunities, or that they can be placated with half-measures.
"In the short term, that may be true; but in the long term that is untenable."
Egypt is also in the midst of a dispute over the waters of the River Nile, which flows through Ethiopia, Uganda, Kenya, Tanzania and Rwanda before reaching the Aswan High Dam where it is required for Egyptian agriculture.
Water is short and oil is running out – and I never thought I’d hear a senior US politician admit that – while food prices are at an all-time high. The UN's Food and Agricultural Organization, which charts a food price index, charted costs going above “the previous record of 2008 that saw prices spark riots in several countries.” The group’s economist, Abdolreza Abbassian, cited that "unpredictable weather" means prices could go on rising.
Freak weather around the globe has slashed global food production: wildfires in Russia last year (and subsequent grain export ban), drought in Argentina, flooding in Australia, a snap freeze in Mexico and the Southern US, and Canada’s washed-out harvest. The predatory commodity markets, a growing taste for meat across Asia and competition from biofuels are also driving up costs, but it seems the main problem has been climatic. (Speculators only jump in when supply is getting tight, as there is no money to be made betting on a buyer’s market. Commodities futures speculation can be blamed for making things worse for billions of people around the globe, but did not instigate the problems.)
So, is this a run of bad luck, or are we seeing climate change at work? Back to the item in Le Monde Diplomatique:
So much of the current supply shortages have been inflicted by increasingly erratic weather events and natural disasters, which climate scientists have long warned are symptomatic of anthropogenic global warming. Droughts exacerbated by global warming in key food-basket regions have already led to a 10-20 per cent drop in rice yields over the last decade. By mid-century, world crop yields could fall as much as 20-40 per cent due to climate change alone.
Writing in the New York Times last week, columnist Paul Krugman addressed the issue in a wonderfully written item, Droughts, Floods and Food. He observes that the “global food crisis — the second in three years” may not be having a huge impact on US inflation but is making “a brutal impact on the world’s poor.” He cites the current anger at repressive Middle Eastern regimes – saying the question isn’t so much why it’s happening as why now – as largely triggered by rising food prices. He continues:
So what’s behind the price spike? American right-wingers (and the Chinese) blame easy-money policies at the Federal Reserve, with at least one commentator declaring that there is “blood on Bernanke’s hands.” Meanwhile, President Nicolas Sarkozy of France blames speculators, accusing them of “extortion and pillaging.”
But the evidence tells a different, much more ominous story. While several factors have contributed to soaring food prices, what really stands out is the extent to which severe weather events have disrupted agricultural production. And these severe weather events are exactly the kind of thing we’d expect to see as rising concentrations of greenhouse gases change our climate — which means that the current food price surge may be just the beginning.
He writes that there is no single weather event you can attribute to man-made climate change, “But the pattern we’re seeing, with extreme highs and extreme weather in general becoming much more common, is just what you’d expect from climate change.”
Of course, there are always politically opportunistic commentators lining up to deny any aspect of climate change you care to mention - - which, strangely enough, has all been traced back to big oil. It’s their job to make the issue as confusing and politically loaded as possible.
Egypt is a lesson in unsustainability, but not the only one, right now. (I’ve seen speculation on the future of Mexico, another oil producer that’s passed peak, along with questions about the long-term future of the House of Saud). Chris Martenson, of Crash Course fame, wrote that events in Egypt were “emblematic of what we might expect elsewhere, especially in the financial markets.” He continues:
My intent here is not to point out the future difficulties that Egypt faces, no matter who is charge, but to use the change that happened there as Egypt simply reminds us that anything that is unsustainable will someday change. It is an emblem for the world.
With abundant energy and food, we are treated to expansive and stable economies in which everyone stands a chance of gaining. Not that everyone will, mind you, but the possibility is there In an energy-constrained world, what was formerly possible is no longer do-able, things don't work right, and there seem to be persistent shortages of everything from growth, to money, to food, to goodwill. What used to work doesn't. It is at these points that the prior stresses and imbalances are most likely to snap and suddenly change the world.
If it’s hyperbole to call events in Egypt a peak oil revolution or a climate change event, it’s no more twisting the facts than turning the story into a fairytale about democracy. Rage over food costs played a major role in getting people out into the streets. Egypt’s oil has peaked, which cannot be denied. Neither can the role of climate change in soaring food prices, as far as I’m concerned. Clearly there are other factors operating here beyond peak oil and climate change, but all the same you have to ask yourself if the protests would have begun in an oil rich Egypt that was importing cheap grain.
And if you believe there is space for peak oil and climate change in the account of events in Egypt, then that turmoil truly is emblematic of what to expect elsewhere. With the global population surging to seven billion, the UN warning of riots around the world if food prices don't come down, oil prices rising again on the back of growing worldwide demand, and global warming making problems worse, the elements are in place for a humanitarian disaster. Despite the actions of all the deniers, I believe the next few years will see results of peak oil and climate change. The warnings are all in place.
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