‘Petropolitics’ and the price of freedom

A crowd of demonstrators participating in a protest against the ongoing use of weapons by rebel militias inside Tripoli and accompanying atmosphere of lawlessness wave banners demanding disarmament and the creation of a national army. The newly-formed Libyan government is struggling to assert itself over the disparate power actors who emerged over the past year.

A crowd of demonstrators participating in a protest against the ongoing use of weapons by rebel militias inside Tripoli and accompanying atmosphere of lawlessness wave banners demanding disarmament and the creation of a national army. The newly-formed Libyan government is struggling to assert itself over the disparate power actors who emerged over the past year.

As the price of oil goes down, the pace of freedom goes up… As the price of oil goes up, the pace of freedom goes down…” So says New York Times columnist Thomas Friedman, who argues that the first law of ‘petropolitics’ is that the price of oil and the pace of freedom are inversely correlated in countries “totally dependent on oil” for economic growth. Friedman’s attempt to link economic oil dependency and political freedom is an interesting one, which could go some way towards explaining why many of the world’s top oil-exporting countries are governed by heavy-handed authoritarian regimes. However, the correlation between recent oil price spikes and anti-authoritarian action – particularly in the Arab Spring – challenges Friedman’s assessment.

Rather than being driven by drops in oil revenues for authoritarian regimes, popular unrest and armed resistance  in countries such as Libya may in fact be correlated with the price of oil remaining high. Inward pressure caused by oil price spikes on petroleum-fuelled supply chains for basic commodities can exacerbate already harsh living conditions, galvanising rebel factions to form a unified anti-authoritarian front against a regime that can no longer ensure price stability for essential goods. This seems true of the 2011 uprising in Egypt (the world’s largest wheat importer), as bread prices rose drastically following the doubling of global wheat prices between June 2010 and February 2011. The impact of high oil prices on the production, shipping and distribution of staple commodities such as corn and wheat – both of which saw severe price escalations of near 40% in 2008 – can lead to social unrest and, in the case of Egypt, the toppling of an authoritarian regime.

High oil prices mean freedom on the rise?

Since December 2010, when mass protests began gathering steam in Tunisia, oil prices have remained consistently high, hovering at $82 per barrel. Is it a coincidence that in September 2011, when rebels overtook the coastal town of Bani Walid, one of Colonel Gaddafi’s last strongholds, oil was just above $82 per barrel and the FAO food price index had reached a ten-year high? While oil revenues may be a temporary source of political stability for some authoritarian regimes, the pressure of increasing price volatility on supply chains, due to scarcity in supply, can convert to instability downstream as oil prices have a compounding impact on food prices. Indeed, in December 2010 just a week before the self-immolation of Tunisian food vendor Mohamed Bouazizi, New England Complex Systems Institute a Cambridge-based organisation comprised of faculty from Harvard, MIT and Brandeis, warned the US government that global food prices were about to cross a socially dangerous threshold. If anti-authoritarian action is any indication of freedom ‘on the rise’ then high oil prices in oil-dependent states are at least one major factor.

Of those countries mentioned in the International Energy Agency’s 2011 list of top oil exporters, ten out of fifteen are classed by Freedom House as ‘Not Free’. Freedom House, ‘an independent watchdog organisation dedicated to the expansion of freedom around the world’, base their rankings on two broad categories: political rights and civil liberties. The former they define by a country’s electoral process, degree of political pluralism and level of participation/ functioning of government; the latter by degree of freedom of expression and belief, associational and organisational rights, rule of law, and personal autonomy and individual rights. The irony, according to Friedman, is that Western dependence on oil imports from countries which are ‘Not Free’ has channelled revenues to authoritarian regimes that oppose freedom. This paradox undermines Western credibility as champions of democracy. In a post-9/11 world, where militant extremists reportedly seek safe harbour in oil-exporting states like Saudi Arabia, the consequences of Western oil dependency undermine the West’s long-term security goals. But, when it comes to Friedman’s equation for ‘petropolitics’, the reverse may actually be true. Recent events such as the Arab Spring demonstrate that as the price of oil rises, impacting staple commodity prices, so too does the need for change – change that is blocked by Western dependence on remaining regimes.

Bottom-of-the-barrel security

Western countries reliant on fossil fuel imports from nations ruled by authoritarian regimes are suffering from a crisis of legitimacy – a crisis which could render us more insecure in the long term. In Algeria, where the Arab Spring has not resulted in full on revolution, violent extremists recently made their presence felt at the ‘In Amenas’ gas plant, brutally murdering 37 expatriate workers. The plant, which is jointly operated by BP, Norway’s Statoil and Algerian state oil and gas company Sonatrach, is a major supply source for Western markets. Algeria is responsible for roughly 12.2 billion barrels of crude oil reserves. 85% of Algeria’s oil exports are destined for European and North American markets. Under the leadership of Abdelaziz Bouteflika, whose five year executive terms are renewable indefinitely, Algeria certainly does not rate highly on the list of Freedom House ‘Freedom Ratings’. Military and intelligence services strictly monitor and interfere with open elections. But the Arab Spring may not ever reach Algeria precisely because of the stability brought to the country by a Western-funded heavy-handed regime, which goes to great lengths to protect the general population from militant Islamist extremists and pro-democracy activists alike. Saudi Arabia and UAE are governed by similarly oppressive regimes; regimes which subvert democracy in favour of ‘stability’. Both supply oil and gas to the West. Both benefit from revenues gained through Western dependence in spite of their heavy-handedness.

Interests versus values

The Arab Spring has been full of unfortunate surprises linking former and current administrations to corrupt leaders. Photos of a smiling Tony Blair, getting up close and personal with much maligned Colonel Gaddafi, were a hit in the mainstream press as well as online following the collapse of his regime. Not long before that, the Bush Family’s close ties to the Saudi royal family did little to lend credence to their Middle East pro-democracy campaigns in the early 90s and 2000s.

Germany is in a similarly awkward position as the the largest energy consumer in Europe, with oil making up 38% of Europe’s overall consumption in 2011. Germany is Russian state-controlled energy giant Gazprom’s biggest European customer with 34% of total sales volume of Russian ‘blue fuel’ destined for German markets last year. There was therefore more than a hint of hypocrisy in Angela Merkel’s recent remarks during a visit by Vladimir Putin to a trade fair in Hanover that Russia ‘needs more NGOs’. The statement was made in regards to a Russian law passed last year requiring all NGOs that receive overseas funding to register as  ‘foreign agents’. Topless Ukrainian activists from the pro women’s rights group ‘Femen’ made their presence felt at the trade fair, drawing attention to  Russia’s crackdown on civil society groups and independent media organisations. Russia’s authoritarianism is a key element of the Putin government, but the issue arguably receives little mainstream coverage in the West compared to the Middle East.

Germany and, by extension, Europe’s de facto dependence on Gazprom to meet their energy needs provides yet another example of why Western countries need to seek develop a more sustainable energy security strategy. It is difficult to legitimately champion broad concerns about upholding civil protections, when some of your largest business partners engage in the shadowy practice of denying basic freedoms to their own citizens.

Renewable energy… and freedom?

In light of the above we can welcome new approaches to energy security, which are aimed at reducing dependence on fossil fuel imports from authoritarian states. The Obama Administration’s ‘All of the Above’ energy strategy, as well as the pragmatism which the European Union, led by Germany, has shown in pushing forward a low carbon agenda are both steps in the right direction. Obama has pledged to double American energy efficiency by 2030, setting aside $2 billion over 10 years to support research into ‘a range of cost-effective technologies’, including electric vehicles, domestically-sourced biofuels, fuel cells, and domestically-produced natural gas. The plan also includes scope for reducing oil imports, while boosting renewable electricity generation from wind, solar and geothermal sources. Although Obama’s plan is far from low carbon, it shows promise. By comparison the UK Government, which at one time pledged to be the ‘greenest government ever’, has attempted to push forward its nationwide low carbon transition through the establishment of a Green Investment Bank. However, fairly recent public squabbles in the UK between Ed Davey, Secretary of State for Energy and Climate Change and Chancellor George Osborne the UK’s finance minister, have called that agenda into question.

Friedman’s claim of an inverse correlation between high oil prices and authoritarianism is flawed. But his point about ‘petropolitics’ is still crucial to security, not only because he tries to link oil price fluctuations to authoritarian politics, but also because he highlights how Western dependence on foreign oil provides significant revenue streams on which remaining authoritarian governments can rely. It is also important to point out that as the global price of oil becomes more volatile due to price instability (see: ‘peaky behaviour’) the economic stability of authoritarian regimes that have consolidated their power bases around fossil fuels will almost certainly erode. Moreover, as the impact of oil prices continue to destabilise staple commodity prices, authoritarian regimes will almost certainly come under increasing pressure from their own populations to step down. Western countries that have formed dubious partnerships with these regimes in order to meet their energy security needs will risk further embarrassment when these regimes are toppled by the inevitable anti-authoritarian movements. Western leaders might then stand by and wait to pick a winner – a dubious strategy at best – in order to ensure that supply shipments are not further destabilised. But is this sustainable?

Renewable energy is not the most obvious factor for bolstering the strength of nations. But it is fast becoming clear that Western dependency on fossil fuel imports from countries governed by heavy-handed regimes cannot go on. The International Energy Agency has recently announced that power generation from renewable sources worldwide will exceed that from gas and be twice that from nuclear by 2016. That’s a positive sign. As for oil, we will have to wait and see. But if the restoration of Western legitimacy as champions of the “free world” is a top priority for Western leaders, then more support for domestic renewable energy growth is essential.

Phillip Bruner is Founder of the Green Investment Forum and a guest lecturer in global political economy at the University of Edinburgh

Image source: United Nations Photo