Chapter 6: Changing the Oil Economy

Tom Prugh, Christopher Flavin, and Janet L. Sawin

Industrial civilization is defined by the staggering abundance of energy it utilizes. To date, most of that energy has come from fossil fuels, of which oil is the most highly prized. But oil has become a liability that threatens global security in three broad ways.

First, oil threatens global economic security because it is a finite resource with no clear successor and the gap between supply and demand is growing. Oil (most of it imported) accounts for a large share of energy budgets in most industrial countries: 36 percent in France, 39 percent in the United States, and 49 percent in Japan, for instance. (Developing countries are even more vulnerable because their imports are larger in relation to GDP.) Growing evidence suggests that rising demand, especially from nations such as China and India, will soon permanently outpace supply, leading to a long-term rise in prices.

Second, oil threatens security by undermining peace, democracy, and human rights in many regions. Great powers (including the United States) have long wielded their military and economic strength to secure access to oil supplies, interfering in the affairs of other countries and supporting repressive regimes when useful. Many nations with oil resources have also found themselves afflicted with the “natural resource curse”—the tendency of mineral wealth to support corruption and conflict rather than growth and development. Oil has recently been linked to terrorism, most obviously in the Wahhabist schools, funded by Saudi oil revenues, which helped train the Islamic radicals of al Qaeda.

Finally, oil undermines climate stability because its use as the world’s dominant transportation fuel produces over two-fifths of total emissions of carbon dioxide, the chief human-caused greenhouse gas. Although the huge global reserves of coal remain a larger threat to climate stability, ending oil use is imperative if greenhouse warming is to be controlled.