Energy Crises - I

Four Oil Crises

First Oil Crisis: 1973-74First Oil Crisis: 1973-74 Arab Oil boycott, 4X OPEC price increaseArab Oil boycott, 4X OPEC price increase

Second Oil Crisis: 1978Second Oil Crisis: 1978 Iranian RevolutionIranian Revolution

Third Oil Crisis: 1981-86Third Oil Crisis: 1981-86 Reagan DepressionReagan Depression

Fourth Oil Crisis: 1990-1991Fourth Oil Crisis: 1990-1991 Gulf WarGulf War

Additional Dimensions Crisis of Nuclear PowerCrisis of Nuclear Power

Anti-Nuclear Power MovementAnti-Nuclear Power Movement Shut down nuclear power industryShut down nuclear power industry

Crisis of Energy & EnvironmentCrisis of Energy & Environment Anti-nuclearAnti-nuclear

against nuclear wasteagainst nuclear waste against meltdownagainst meltdown

Anti-hydrocarbonAnti-hydrocarbon against acid rainagainst acid rain against strip-miningagainst strip-mining

Pro-"Soft" Energy PathsPro-"Soft" Energy Paths renewable energy sourcesrenewable energy sources solar archictecturesolar archictecture

Theory

Question of Energy EfficiencyQuestion of Energy Efficiency Commoner: ThermodynamicsCommoner: Thermodynamics

1st Law: Neither created nor destroyed1st Law: Neither created nor destroyed 2nd Law: tendency to degrade2nd Law: tendency to degrade Loses in inefficient energy use, technical issueLoses in inefficient energy use, technical issue

Crisis of Human EnergyCrisis of Human Energy Midnight Notes: Political ThermodynamicsMidnight Notes: Political Thermodynamics

Behind crises of non-human energy Behind crises of non-human energy Lies a crisis of human energyLies a crisis of human energy

Physics & Class Conflict - I

Political Reading not only of Political Reading not only of Thermodynamics but of history of PhysicsThermodynamics but of history of Physics

17th C: Period of rise of industrial capital17th C: Period of rise of industrial capital Newton (1643-1727) development of celestial Newton (1643-1727) development of celestial

mechanics, problem of irregular gravitational mechanics, problem of irregular gravitational impulses required God for solutionimpulses required God for solution

Conflicts w/new labor class required Conflicts w/new labor class required regularization via clock, state interventionregularization via clock, state intervention

Newton worked at mint, state power to deal with Newton worked at mint, state power to deal with counterfieters.counterfieters.

Physics & Class Conflict - II

19th C: rise of autonomous working class 19th C: rise of autonomous working class movement, unionismmovement, unionism

Physics: thermodynamics to deal with Physics: thermodynamics to deal with dynamic systemsdynamic systems Carnot: channel exploding masses for workCarnot: channel exploding masses for work Mayer: First Law: endless possibilities of Mayer: First Law: endless possibilities of

capturing workcapturing work 2nd Law: rising entropy 2nd Law: rising entropy decling availability decling availability

of energy for workof energy for work

Physics & Class Conflict - III

Threat of revolution (1848, 1870,etc) Threat of revolution (1848, 1870,etc) evokes ultimate "unavailibility" of w.c. evokes ultimate "unavailibility" of w.c. energy for work, revolution parallels "heat energy for work, revolution parallels "heat death"death"

Science Fiction: Science Fiction: NightlandNightland, sun dies, endless night on earth, sun dies, endless night on earth Time MachineTime Machine, eloi & morlocks, eloi & morlocks

Back & forth exchange between literature Back & forth exchange between literature and Scienceand Science

Physics & Class Conflict - IV

Link between physics & social control is Link between physics & social control is emphasis thermodynamics gives to emphasis thermodynamics gives to technological change & flexibility in technological change & flexibility in harnessing energyharnessing energy Taylorism & FordismTaylorism & Fordism Post-Fordism & Information SocietyPost-Fordism & Information Society

Information & Maxwell

Maxwell's Demon requires information to Maxwell's Demon requires information to sort moleculessort molecules

Business Demons

TeachersTeachers ProfessorsProfessors Personnel OfficersPersonnel Officers SupervisorsSupervisors Quality Control OverseersQuality Control Overseers

All weed out "high entropy" workers to All weed out "high entropy" workers to maximize work extraction & delay doommaximize work extraction & delay doom

Energy/Work Crisis

First Law says First Law says no "energy crisis" possibleno "energy crisis" possible energy takes many formsenergy takes many forms

2nd Law says real crisis is extraction of 2nd Law says real crisis is extraction of work from human beings, realization of work from human beings, realization of "working" class"working" class human energy takes many forms, not all can human energy takes many forms, not all can

be harnessed for workbe harnessed for work business problem: extraction, controlbusiness problem: extraction, control

Work & Crisis of Keynesianism Crisis of KeynesianismCrisis of Keynesianism

acceleration of wagesacceleration of wages decelleration of productivitydecelleration of productivity decline in productivity of housework, decline in productivity of housework,

schoolworkschoolwork i.e., refusal of work = refusal to give energy to i.e., refusal of work = refusal to give energy to

businessbusiness

Results: Results: general problemgeneral problem specific problems in "energy sectors"specific problems in "energy sectors"

Crisis in Coal Industry - I

W.Cleaver Article on Wildcats in CoalW.Cleaver Article on Wildcats in Coal came after failure of proverty programscame after failure of proverty programs linked miners & communitieslinked miners & communities rupture of old union controlrupture of old union control

1950:Bituminous Coal Agreement codified 1950:Bituminous Coal Agreement codified productivity deal, massive layoffs, productivity deal, massive layoffs, K/L K/L

1960s: absenteeism, refusal of work, anti-1960s: absenteeism, refusal of work, anti-union organ., repression, poverty aid, but union organ., repression, poverty aid, but workers use CAP's, black lung campaignworkers use CAP's, black lung campaign

Crisis in Coal Industry - II

1970s: Restructuring1970s: Restructuring coal taken over by oil, steel, utilitiescoal taken over by oil, steel, utilities expansion of strip-mining in Western statesexpansion of strip-mining in Western states environmental laws undermined Eastern Coalenvironmental laws undermined Eastern Coal State sanctioned OPEC increases in oil then State sanctioned OPEC increases in oil then

gas etc prices undercut wagesgas etc prices undercut wages State push for nuclear powerState push for nuclear power

Crisis in Oil - I

4X Oil Price increase4X Oil Price increase result of pressures inside OPEC countriesresult of pressures inside OPEC countries result of sanctioning by US from outsideresult of sanctioning by US from outside

Internal PressuresInternal Pressures Decline in real value of oil (terms of trade) Decline in real value of oil (terms of trade)

reduced value of oil exportreduced value of oil export Conflicts of modernization required moneyConflicts of modernization required money

CIA Overthrow of Iranian govt in 1953CIA Overthrow of Iranian govt in 1953 Rural Rural urban migration, urbanization pressures urban migration, urbanization pressures

Crisis in Oil - II

External ForcesExternal Forces US had let OPEC know it approved of oil price US had let OPEC know it approved of oil price

increases (see Oppenheim)increases (see Oppenheim) Europeans not happy, saw advantage to USEuropeans not happy, saw advantage to US Trilateral Commission saw opportunityTrilateral Commission saw opportunity

recycled petrodollars road to conversion of wages recycled petrodollars road to conversion of wages into capitalinto capital

OPEC as global financial intermediaryOPEC as global financial intermediary

OPEC

OPEC as a "financial intermediary"OPEC as a "financial intermediary" financial intermediariesfinancial intermediaries

take in large number of small "deposits"take in large number of small "deposits" make smaller number of larger loansmake smaller number of larger loans

"Deposits"OPEC/Banks

Loans

OPEC & Sraffa

Sraffian economics = critique of Sraffian economics = critique of neoclassical microtheoryneoclassical microtheory critique of "capital theory": aggegation critique of "capital theory": aggegation

requires prices but theory purports to requires prices but theory purports to determine pricesdetermine prices

Alternative: no aggregation, focus on Alternative: no aggregation, focus on determining power of "basic goods" prices, determining power of "basic goods" prices, e.g., oil !e.g., oil !

Manipulation of prices of basic goods can Manipulation of prices of basic goods can cause shift of value from wages to profitscause shift of value from wages to profits

Wages to Profits? Oil price Oil price achieves shift of value from achieves shift of value from

wages to profits if and only if prcies wages to profits if and only if prcies increases are accepted via a fall in real increases are accepted via a fall in real wages & decline in other importswages & decline in other imports

But workers refused this declineBut workers refused this decline forced money wages up apace w/inflationforced money wages up apace w/inflation refused austerity programs to reduce real refused austerity programs to reduce real

wages in other wayswages in other ways

So, petrodollars financed imports not So, petrodollars financed imports not Investments, set stage for debt crisisInvestments, set stage for debt crisis

2nd Oil Crisis

Iranian RevolutionIranian Revolution begun by oil field workersbegun by oil field workers revolt against Shah's modernizationrevolt against Shah's modernization undermined Shah's role for US as sub-imperial undermined Shah's role for US as sub-imperial

power to police the Persian Gulfpower to police the Persian Gulf

OPEC seized cut-off in Iranian Oil exports OPEC seized cut-off in Iranian Oil exports to again increase oil pricesto again increase oil prices

Workers responded as in 1st Oil shockWorkers responded as in 1st Oil shock Carter brought in Volcker to attack wagesCarter brought in Volcker to attack wages

3rd Oil Shock Reagan retains Volcker, plunges world Reagan retains Volcker, plunges world

into depression, dramatic reduction in into depression, dramatic reduction in demand for oil, oil prices collapsedemand for oil, oil prices collapse

Panic in oil industry, not just OPEC but Panic in oil industry, not just OPEC but also USalso US

With low prices, oil production increases, With low prices, oil production increases, causing even lower pricescausing even lower prices

George Bush flies to Persian Gulf in 1986 George Bush flies to Persian Gulf in 1986 to get Gulf States to cut back on oil to get Gulf States to cut back on oil productionproduction

4th Oil Shock: War

Gulf War can be seen as response to 3rd Gulf War can be seen as response to 3rd shock of low pricesshock of low prices Saddam Husein attacks Kuwait for "economic Saddam Husein attacks Kuwait for "economic

warfare", high oil production means low prices warfare", high oil production means low prices and Saddam needs revenue to deal with and Saddam needs revenue to deal with aftermath of Iran - Iraq waraftermath of Iran - Iraq war

Oil industry at first happy with Saddam's Oil industry at first happy with Saddam's assertiveness, likes higher prices ($25/b)assertiveness, likes higher prices ($25/b)

US suckers Saddam/Kuwait? Slaps him downUS suckers Saddam/Kuwait? Slaps him down Militarization provides Militarization provides control of M.E.labor control of M.E.labor

Business & Gulf War

Gulf War caused big oil price riseGulf War caused big oil price rise Gulf War created opportunity for:Gulf War created opportunity for:

push on North Slopepush on North Slope push for off-shore drillingpush for off-shore drilling revival of nuclear power industryrevival of nuclear power industry

Gulf War increased local militarizationGulf War increased local militarization Gulf War led to dramatic reorganization of Gulf War led to dramatic reorganization of

labor force (Palestinians out of Kuwait, labor force (Palestinians out of Kuwait, Yemini out of Saudia Arabia)Yemini out of Saudia Arabia)

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