Upstream - [UNLOCKED] Oil, Monopoly Capitalism, and Imperialism w/ Adam Hanieh

Episode Date: October 3, 2024

Oil is much more than just a source of energy—it’s a commodity that has shaped—and has been shaped—by the forces of capitalism perhaps more so than any other commodity. The story of oil is one of monopoly capitalism, one of imperialism, one of cheap labor, resource extraction, ecosystem devastation, climate change, assassinations, environmental disasters, genocides—the list goes on. Oil is the commodity which not just lubricates the actual, literal machinery driving the system—but which also lubricates the entire process of U.S. imperialism—the blood flowing through the empire’s many tentacles wrapped around the globe. As today’s guest has written, “Oil's centrality stems from what it does for the imperatives of accumulation: its ability to accelerate and expand capital's turnover, cheapen the costs of production (including labor), and knit together an international market. No other commodity plays this role.” Adam Hanieh is a Palestinian professor at the Institute for Arab and Islamic Studies at the University of Exeter. He is the author of Lineages of Revolt: Issues of Contemporary Capitalism in the Middle East, published by Haymarket Books, and most recently, Crude Capitalism: Oil, Corporate Power, and the Making of the World Market, published by Verso. Adam was on the show last year to talk about the political economy of Palestine, part of our ongoing series on Palestine.In this episode we explore the early history of oil, its emergence as a fuel source and how it eventually overtook other fuels like coal as the primary energy source of capitalism. We explore the role that oil has played in shaping geopolitics—from colonialism to coups, assassinations, and more, focusing on the way that oil has shaped the Middle East to this day. We talk about the major oil companies and how the world market for oil works, and finally, we bring into stark relief the environmental implications of this hydrocarbon and the way that oil companies continue to dominate and shape our response to climate change. Further resources: Crude Capitalism: Oil, Corporate Power, and the Making of the World Market Related episodes: Upstream's ongoing series on Palestine Upstream is a labor of love — we couldn't keep this project going without the generosity of our listeners and fans. Subscribe to our Patreon at patreon.com/upstreampodcast or please consider chipping in a one-time or recurring donation at www.upstreampodcast.org/support If your organization wants to sponsor one of our upcoming documentaries, we have a number of sponsorship packages available. Find out more at  upstreampodcast.org/sponsorship For more from Upstream, visit www.upstreampodcast.org and follow us on Twitter, Instagram, Facebook, and Bluesky. You can also subscribe to us on Apple Podcasts, Spotify, or wherever you listen to your favorite podcasts.

A quick note before we jump into this Patreon episode. Thank you to all of our Patreon subscribers for making Upstream possible. We genuinely couldn't do this without you. Your support allows us to create bonus content like this and provide most of our content for free so we can continue to offer political education media to the public and help to build our movement. Thank you comrades. We hope you enjoy this conversation. Oil is often described, you know, it's described as a prize or as a curse, or in the words of a former Venezuelan oil minister, as the devil's excrement, and so forth. Now, I think the problem with this kind of approach is it gives a causal power to oil, which, in the end of the day, is really just a sticky black goo.

Instead, I think what we need to do is place oil in capitalism and to ask ourselves, what is it about capitalism that gives oil its power and its meaning? How do the priorities, logics, and behaviors that are today systemic to capitalism determine oil's place in our world today? And that's the basic question I really tried to dig into, include capitalism. You're listening to Upstream. Upstream. Upstream.

Upstream. A podcast of documentaries and conversations that invites you to unlearn everything you thought you knew about economics. I'm Della Duncan. And I'm Robert Raymond. Oil is much more than a source of energy. It's a commodity that has shaped and has been shaped by the forces of capitalism, perhaps more so than any other commodity. The story of oil is one of monopoly capitalism, one of imperialism, one of cheap labor, resource

extraction, ecosystem devastation, climate change, assassinations, environmental disasters, genocides, the list goes on. Oil is the commodity which not only lubricates the actual literal machinery driving the system, but which also lubricates the entire process of US imperialism. It is the blood flowing through the empire's many tentacles wrapped around the globe. As today's guest has written, oil oil centrality stems from what it does to the imperatives of accumulation, its ability to accelerate and expand capital's turnover, cheapen the costs of production, including labor, and knit

together an international market. No other commodity plays this role. Adam Hania is a Palestinian professor at the Institute for Arab and Islamic Studies at the University of Exeter. He is the author of Lineages of Revolt, Issues of Contemporary Capitalism in the Middle East, published by Haymarket Books, and most recently, Crude Capitalism,

Oil, Corporate Power, and the Making of the world market, published by Verso. Adam was on the show last year to talk about the political economy of Palestine, part of our ongoing series on Palestine. In this episode, we explore the early history of oil, emerging as a fuel source and eventually overtaking other fuels like coal as the primary energy source of capitalism. We explore the role the oil has played in

shaping geopolitics from colonialism to coups, assassinations and more, focusing on the way that oil has shaped the Middle East to this day. We talk about the major oil companies and how the world market for oil works and finally we bring into stark relief the environmental implications of this hydrocarbon and the way that oil companies continue to dominate and shape our response to climate change. And now here's Robert in conversation with Adam Henia. Adam, it is great to have you back on the show.

Thanks, Robert. It's a real pleasure to join you today. Adam, it is great to have you back on the show. Thanks, Robert. It's a real pleasure to join you today. So, for folks who missed it, we had you on last year to actually talk about your book, Lineages of Revolt, Issues of Contemporary Capitalism in the Middle East. And we focused particularly on your chapters on Palestinian political economy in that conversation. So, anybody who wants to go check that out, if you haven't already, I would definitely recommend that. If you missed that episode though, or if you just need a refresher on who Adam is,

I would love it, Adam, if you could introduce yourself for our listeners. Sure. I'm currently a professor of political economy and global development at the Institute for Arab and Islamic Studies at the University of Exeter in the UK. I'm of Palestinian origin and lived and worked in Palestine for about seven years in the early 2000s through the Second Interfather. And so I've written extensively on Palestine, but also the wider Middle East region. Much of my previous academic work is focused on the Gulf Arab states. I'm particularly being interested in how the Middle East is connected to the wider global

capitalist system and to try to move away analysis of the region from the kind of standard approaches we see replicated in the media, which focuses on supposedly intractable conflicts, religion as kinds of the main explanatory factors, to really try to understand how the Middle East, as with all places in the world today, is deeply embedded in global capitalism and is part of how global capitalism functions. Absolutely. Yeah. And the book that we're going to be talking about today, your latest book, really helps to do to do just that focusing in on one specific commodity could call it the commodity oil. So crude capitalism, that's that's the book that we're going to be talking about today going to be published this month, actually, September 17. And yeah, can you talk about what drove you to want to write this book

and what you were hoping to accomplish with it? Yes, well, I've worked for about 20 years now on, as I mentioned, the Gulf states like Saudi Arabia, United Arab Emirates, Qatar, and in all these states, obviously, the question of oil is supremely important. They are the world's leading oil exporters, major sources of gas, natural gas as well. And a lot of academic work on the Gulf tries to use these hydrocarbon resources as the key explanatory factors to try to explain society and politics and economics in the Gulf as a result of these stupendous oil supplies that they possess. There's a theory, for example, called the Rontier State Theory or Rentier State Theory,

which basically says that countries like Saudi Arabia are undemocratic because they have a lot of oil, and this allows the state to earn wealth without having to tax its citizens. So because of this, oil-rich states tend to be undemocratic and they have a lopsided development that's mostly focused on the oil sectors. Now, I think this kind of approach is very misleading. It's a kind of commodity fetishism, to use Marx's framework, where a commodity appears to be invested with a magical power that kind of creates and determines its society, its politics, its social forms. And we can see this reflected in the way that oil is often described. It's described as a prize or as a curse, or in the words of a former Venezuelan oil minister, as the devil's excrement, and so forth. Now, I think the problem with this kind of approach

is it gives a causal power to oil, which, in the end of the day, is really just a sticky black goo. Instead, I think what we need to do is place oil in capitalism and to ask ourselves, what is it about capitalism that gives oil its power and its meaning? How do the priorities, logics and behaviours that are today systemic to capitalism determine oil's place in our world today? And that's the basic question I really tried to dig into, include capitalism.

I really think this is a key question. We obviously can't deal with the climate crisis and let's face it, the climate crisis is the biggest question facing humanity today without having an answer to this question. But to me, it's remarkable, you know, if you look at climate discussions, both the kind of discussions you see at places like COP28,

but even more broadly through the media and different climate movements, how much these discussions ignore capitalism. They treat energy, they treat energy consumption and energy production as simply technical problems. And I think what this does is it naturalizes capitalism. Capitalism is just there. It's a natural thing that we don't even have to acknowledge

rather than it being a social system that emerged historically and has only been around a few hundred years. So what I'm saying here is that we need to kind of foreground capitalism, bring it out of its invisibility if we are really going to tackle the climate crisis To move away from fossil fuels to move away from oil and to really understand the place of oil in our life today Hmm. Yeah, thank you so much. You you really made so many important points there and I really appreciate the point about evoking of capitalist realism and this idea that There is no other alternative and we just think about capitalism if we don't even really think about capitalism as a system often when we make our decisions in life, it just feels like the water that we swim in.

So I think that's also a very very important point that I think about quite a bit as well. So you start the book with a really interesting story about the way that oil sort of emerged. And you sort of break a lot of assumptions that we have about the running out of energy sources and the need to move to oil and all of that kind of stuff. So I'd love it if you could maybe talk about how oil became a primary energy source under capitalism and maybe unpacking the history and telling the story about how it also came to surpass all other fuel sources eventually to become the world's dominant fuel source. Yes, well I think that the place we need to start here if we're going to be

speaking about oil and capitalism is actually the idea of energy. All human societies need energy sources. We interact as human beings with nature through labor to produce the means of our existence. All human societies have done this for millennia. And energy is what enables this labor to take place and determines its relative strength. So for most of human history, energy was delivered through muscles, human muscle, muscle power, generated through the food we eat,

plants and animals, which ultimately derive from solar energy. Later on, human muscle was supplemented by the burning of wood and charcoal and rudimentary machines that could harness wind and water. So this was basically the situation for millennia. But when capitalism emerged in the 1400s,

and quickly came to envelop the whole world, it transformed our relationship with nature in really profound ways. If we think about capitalism, the production of goods, production of commodities, is aimed at the market. It's aimed at exchange and human needs are incidental to that. The goal of capitalist production is to accumulate, to accumulate more and more, to accumulate money. And there is an underlying logic therefore of endless accumulation, ever accelerating accumulation,

which overrides all other kinds of considerations. So what this does, and I talk in a bit more detail of this in the first chapter, is that there's a tendency for ever increasing energy demand under capitalism. And I think this is a really, really important point that is really often forgotten today, particularly in the discussions around renewables and the possibility of a green transition or an energy transition,

that energy use actually tends to grow exponentially under capitalism, more and more, there's a voracious demand for energy. So that's one thing, this logic of endless accumulation. Secondly, one thing, this logic of endless accumulation. Secondly, because of the drive to make profit, capitalism also tends to displace human labor with machines and other kinds of capital-intensive technologies. And if we ask ourselves, what are machines, they are basically energy converters. They transform energy into useful work, into useful mechanical work. And this means that the types and quantities of energy that drive machines and drive factories become extremely important to how capitalism both emerges and functions. There are other kinds of systemic logics if you like to capitalism.

One which Marx spoke famously about is of course the speeding up of the circulation of commodities and expansion of markets because more profit can be made the more goods that can be produced and consumed in any given cycle. There's a tendency to really accelerate the production and consumption of all goods and again, energy can be seen as crucial to how this happens. The portability of energy and the energy density of various fuels thus really play into the profitability of capital. So these and other kinds of systemic features of capitalism, the drive to ever accelerate and produce ever more, the speeding up of circulation, the replacing of human labor with machines.

All of these things are deeply connected to the kinds of energy that we use under capitalism. And here, I think, is where we can really understand how fossil fuels, which here we're talking about coal and oil and gas in particular, which, you know, here we're talking about coal and oil and gas in particular, really became the ideal energy substratum for this kind of social system. They have a higher energy density than other energy sources. They are discrete physical resources, so they can be moved around. They have a chemical flexibility that allows them to be turned into other products like plastics and petrochemicals,

which is another really key part of the story of oil that I think often gets left out. So that's kind of the bigger, more, if you like, abstract picture of placing fossil fuels within capitalism, within these systemic features of capitalism. But if we turn more historically to how fossil fuels emerged as the key energy source under capitalism, this began in the 1700s and 1800s with the advent of coal, firstly, under basically British supremacy. Britain in 1800 produced about 80% of the world's coal, the production of coal, the use of coal in powering locomotives,

in producing steel was very important to the rise of British global dominance through this period and all the way through to the late 19th century, Britain was responsible for the majority of the world's coal output. But beginning in the early 1900s, oil began to emerge as an important fossil fuel. Firstly, with production centered in the United States and Baku in modern day Azerbaijan, as the two kinds of major oil production centers in the early 1900s. Oil was more energy dense than coal. It could be turned into liquid fuels like gasoline

that could be moved around easier and eventually became utilized in things like automobiles and ships and planes and so forth. And then around 1950, oil supplanted coal as the principal fossil fuel. This was first in the US, then in Western Europe, and then the rest of the world. So that mid-20th century point is really key to understanding how oil became so central to our lives and is the point where we can talk about this oil transition, if you like, in the 1950s after the Second World War. I just want to make one point, though, again, around this point of oil transition or energy transitions.

We nearly need to think of energy transitions as something that are additive. Because of this feature of capitalism, that it's this voracious demand for energy. Energy tends to grow and grow and energy sources tend to become additions not replacements. So if we look at coal for example, despite the fact that oil is by far the principal fossil fuel today, overall consumption of coal has actually quadrupled since the beginning of the oil age. We see oil added to coal as a key energy source and the same thing with gas and the same thing I would argue with renewable energy today.

So really it's important to kind of see how it's not a substitution of one energy source by another, but actually an additional growth in energy that we tend to see under capitalism. Right. Yeah, yeah, absolutely. And we've been talking a lot about imperialism and monopoly capitalism lately on this show. And although we haven't done a deep dive into Lenin's text on imperialism, we are planning on doing that at some point. I did think it would be interesting if you could talk about just the basic idea of monopoly capitalism and imperialism as it relates to oil and the oil industry. And I think, you know, we'll get into a lot of the details as we move along in the conversation, but I think it would be important to lay this

out clearly because the components of monopoly and of imperialism, vertical integration, interconnections with the state, colonialism, finance, like all of the components are there with oil. And I think it's a really, really great example that can help flesh this idea out. So yeah, I'm wondering if you can talk about imperialism as exemplified in the rise of oil. Yes, I think Lenin's classic text on imperialism, I think is really interesting, as you say, to relate to this discussion on oil. It was written in 19 early 1916, just at the beginning of the rise of the oil age. oil age. And Lennon, interestingly, actually spends quite a lot of time discussing oil as part of his discussion of of how monopoly capitalism emerged and operates. He spends a fair bit of time speaking about the dynamics of the oil industry, for example, in the United States, which at that

time was dominated by a company called Standard Oil controlled by the Rockefeller family. And I spend also in crude capitalism a fair amount of the second chapter speaking about Standard Oil and how it emerged. Lenin also interestingly mentions Baku, which at the time was another major center of oil, global oil production, and was controlled by European industrialists. And he goes on to describe the struggle between, you know, German and Dutch and British and French interests in the control of oil globally.

Just as an aside, I think the pamphlet itself, Imperialism, the Highest Stage of Capitalism, tends to treat oil just as another commodity or just as another example of monopoly. And I think in that sense, he fails to kind of see the way that this transition was really shaping the use of energy under capitalism. I mean, we can forgive him for that because it was, you know, he was writing at the cusp of that shift. But I do think it's quite an interesting observation that you've made.

Oil is really quite a central part of how Lenin thinks about imperialism. But to come back to your question, Lenin's basic thesis was that imperialism was an outgrowth of monopoly capitalism in Western Europe and in the core states of Western Europe and in the United States. And I think the oil industry is a really great illustration

of what monopoly means and how they operated, how they emerged. If we look at all the large Western oil firms, they quickly became through the early 20th century vertically integrated. Now, what this means is that they came to control not just the extraction of crude oil, but also the refining of that crude oil into useful products like gasoline, into petrochemicals and plastics

and all of the other kinds of products that crude oil turns into. They also control the pipelines that took and transported oil from the oil fields to trucks and elsewhere. They control the maritime transport routes. They control the port terminals. They control the sale and the production of oil from its pulling it out of the ground to its consumption by the consumer was controlled by single company, by single companies. Within their structure, they control each of these different stages. Now in the jargon of the oil industry, this is described as the upstream and the downstream of oil. The upstream being the extraction and the downstream everything else that happens from that extraction to the consumption by the consumer. Now this is a really important feature of all of these major oil companies because it gave them

enormous power against any would-be competitors. They controlled the basic infrastructure through which oil circulated and moved around the world, and they could deny this infrastructure or charge high prices to any would-be competitors. They also controlled the price of oil, which gave them immense power, which we can talk about in perhaps a little bit later. So to speak very concretely, up until the 1970s most of the world's oil production was controlled by just seven companies. These were called the seven sisters. There were five American companies alongside BP or British Petroleum

and Shell, the British and the British Dutch companies. So these seven oil companies basically controlled all of the world's oil reserves outside of the US and the Soviet Union. They controlled all of the world's oil refineries, all of the world's pipelines, and all of the infrastructure of moving oil and the sale of oil through most of the 20th century. Today, when we talk about companies, when we think about Western oil firms, you know, we think about firms like Exxon Mobil, for example, or Chevron, or Shell or BP, these are all the descendants after various These are all the descendants after various mergers and so forth of those seven sisters. So they remain immensely powerful, the descendants of these seven firms. Today, however, what we have is the rise of also some non-Western firms, particularly important here is a firm called Saudi Aramco, which is by far the biggest oil company in the world, headquartered in Saudi Arabia.

Also, there's a range of Chinese oil companies that are really important. These big non-Western firms have followed in the footsteps of the Seven Sisters and have also become very vertically integrated, crossing the downstream and upstream sectors of the industry. the downstream and upstream sectors of the industry. So that's one aspect of the monopoly. Secondly, these firms have been really closely connected to the state. Their overseas oil expansion of the Seven Sisters was protected and backed by Western governments, by Western militaries. The infrastructure, the pipelines and all of this was often built by Western governments and then transferred to the oil companies.

So this is another feature that Lennon talks about and we think about in terms of imperialism is this close connection between the state and capital. We can see this illustrated very clearly in the oil industry. And also, finally, the role that financial actors play in the oil industry today, the kind of merging of ownership between the biggest financial companies, investment banks and investment funds, and the ownership of oil firms like ExxonMobil, like Shell, like BP, are also a very clear feature of the oil industry. And I look at some of that in detail at that kind of ownership structure in the book, but it I think really does resonate with your observations about Lenin and the concept of finance, capital and imperialism. And of course, the need to spread out and carve up the globe in this scramble for resources,

I think is really exemplified with oil. And so, yeah, one of the most interesting aspects of the book is how you present the problem of oil as being one of abundance, not scarcity, right? And I think that is connected to the way that, you know, the world was carved up and there was this competition and this need to go out and control other regions and all of that stuff. So I'm wondering if you can walk us through this issue of abundance versus scarcity and and why it's so important to understand that when we talk about the emergence of the oil-fueled global oil.

Yeah, there's a pervasive myth that oil is running out and global oil. Yeah, there's a pervasive myth that oil is running out and that, you know, there's only a few years and then the oil suppliers will be depleted. This is not a recent myth. It's been around for over 100 years. Most recently, there was a period a couple of decades ago when people spoke about peak oil, the idea that oil production had basically peaked and was coming to an end. But unfortunately, it's not the case. Regardless of individual oil fields, which might become exhausted, oil production continues to grow, and there's no imminent prospect of oil reserves depleting or exhausting themselves. We can see this, you know, in the last decade or so with the shale revolution in the U S which has catapulted the U S into the position of the world's largest

oil producer. So this is, I think it's a pervasive myth and it really is one that we need to challenge. To be clear, I'm not saying that oil reserves are infinite, fossil fuels are by definition a finite resource, but we're not facing any imminent shortage. In fact, the problem that we face is that we are producing too much of it. We actually have peak carbon rather than peak oil. We can't keep producing carbon emissions through the burning of fossil fuels at this rate, as we all know.

the burning of fossil fuels at this rate, as we all know. Now, throughout much of the history of oil, this abundance has created a real problem for the biggest oil companies, especially in the early years of the 20th century. I mentioned earlier the vertically integrated structure of the biggest oil companies, and this was definitely true, but in the upstream sector, in the actual production of crude, you had a lot more smaller producers working the oil fields. And what this meant was that these smaller producers tried to produce as much oil as they could. And this meant continued cycles of overproduction,

which led to crashing of oil prices, periodically crashing of oil prices because too much oil was being produced. There's a great oil scholar, Matt Huber, who has written about this early history, which I draw upon in the book. And it's very clear in illustrating how the problem of overproduction in oil, in crude oil,

was one repeatedly felt by oil companies. And as you pointed out, when oil companies began to expand internationally through the 1920s and 1930s, this problem of oil production also was reinforced. There are a lot of oil reserves, and unbridled production meant oversupply, and thus the problem of too low prices. So what was the response to this? Remember the Seven Sisters controlling most of the world's production, most of the world's refineries, most of the world's transport of oil. And in the 20s and 30s, what they did was they attempted to deal with this problem of overproduction

through various secret agreements that carved up the world between them, that essentially limited the production of oil and divided it between themselves globally and this way they could ensure that prices wouldn't crash, there wouldn't be this problem of over supply. And this was basically the structure of the oil industry up until the 1960s and 1970s when it began to become unstuck because oil reserves in the Middle East, in Latin America and elsewhere were nationalized by the major producer states like Saudi Arabia and Venezuela and elsewhere. And this made it much more difficult for the big Western firms, those seven sisters, to control the supply of oil onto the world market.

And yeah, we'll get more into that and the dynamic with the Middle East very shortly. I wanted to read a quick passage from the book before I ask you the next question, which is related. So you talk about the great acceleration, and this is what happened during this period that you're talking about in the 1950s, post-World War II. You write, the oil transition massively accelerated the world's consumption of fossil fuels and thus carbon emissions.

Nearly three quarters of the human-driven increase in the atmospheric concentration of CO2 has happened since 1950, about half since the 1980s. So I just thought that was a really wild statistic and kind of puts a lot in perspective, I think. And so I'm wondering if you can talk about, yeah, how oil did explode after World War II and particularly the implications this had for capitalism, for the rise of US power, and for the US's

relationship to the Middle East more broadly. This is really the crucial period for understanding the emergence of oil as the dominant fossil fuel. And as you point out, there was a massive acceleration at this point that scientists refer to as this great acceleration, where we see a huge surge in the global consumption of fossil fuels generally, but that was enabled by oil entering the energy system. Now, why did this happen?

What were the reasons for this? One was war itself, the rise of new war-making technologies, airplanes, navies, motorized vehicles that all ran on petroleum, made war-making much more deadly, but also really deepened the power of militaries in Europe and the United States in particular. And this was very clearly understood by military planners. If we look at Winston Churchill, for example, in Britain, making the decision to switch the British Navy from coal to oil, recognising that this would make it cheaper and faster and more deadly,

efficient navies. And this was a pattern that occurred globally. Of course all these kinds of new technologies, airplanes and motorized vehicles and so forth also had civilian uses. So that was one thing, we had the kind of changing nature of global transport and of global war making through the advent of these liquid fuels that come from oil. Oil also was a really important source of electricity for many countries in the post-war period. We look at countries like Italy, like Portugal, Japan, Greece, Ireland. In these states, oil actually came to supply a majority of power. It made possible electrification across much of Western Europe and Japan in the post-war period.

Today, oil doesn't play that much of a prominent role in electricity production, but it is really important to see at that moment in the Second World War, post-Second World War period, what it did enable in terms of both industry but also household electrification to take place in many countries. And a third factor which I really think is missed in a lot of writing on oil and the fossil fuel industry and the transition to oil in the mid-20th century the transition to oil in the mid 20th century is the rise of the petrochemical industry, because it's at this moment that we see the substitution of natural products, wood and glass and natural rubber and all these kinds of things, with synthetic materials that are

ultimately derived from oil. In other words, things like plastics, the plastics revolution, synthetic rubber, which is so important, synthetic fertilizers, all of these commodities that are new commodities, they emerged and really took off after the Second World War. And these are all products of hydrocarbons. So here we see oil as a raw material, it's not just an energy source, it's actually the basis of most material production today. And this is really, really important to understanding how oil became so embedded in our daily lives to such an

extent that I'm sure if your listeners think about what's around them today, the room that they're sitting in or the car that they're sitting in, and just look around at the paints and the plastics and the rubbers and the synthetic fibers that we're wearing. All of these are oil products, but to us, they're really invisible. We don't think of them as actually products of fossil fuels. So that's the third factor alongside energy, alongside electricity,

is this petrochemical revolution. So as you pointed out, what this meant is that we see a doubling in fossil fuel consumption between 1950 and 1965 globally. Just those 15 years of doubling in the consumption of fossil fuel, and this is why the ecological impacts that we can trace to this mid 20th century, why it happened at that point, why those hockey stick graphs that we see so often in our discussions of the climate really took off at that moment. So we're talking here about the post-war moment, about the 1950s and the 1960s, this transition to oil as the dominant fossil fuel. But there are other transitions that are also occurring at this point.

And one of the arguments I really try to emphasize is needing to see these transitions that are occurring at this moment as very much connected. So one of these is the emergence of the United States as the dominant global capitalist power after World War II. And the rise of the United States, the hegemony of the United States is closely associated with the transition to oil. US oil firms are at the core of global oil production. They are by far the largest and dominant part of the Seven Sisters, those seven firms that I spoke about. US oil firms are also the dominant petrochemical producers, so they're central to this new industry that

pervades everything. And very importantly, the US drives the transition from coal to oil in Western Europe. In West Germany, for example, after World War II, immediately after the war, the US forbids the use of coal as a means to produce synthetic fuels by Germany, which had previously relied upon coal as its primary energy source. So the US forces the expansion of the oil industry, the expansion of oil refining. The Marshall Plan, which delivered funding to Europe after the war from the United States, in the Marshall Plan, more funding was spent on oil than any other commodity. And most of this oil, more than 70% of it, came from just three US companies, three of these seven sisters that I spoke about. So we can really see the way that

US post-war reconstruction in Europe drove Europe's transition to oil, and it did so under American hegemony. Now, the other thing that was really crucial, another transition, if you like, that was closely associated with this shift to oil globally, was the rise of the Middle East and Middle East oil production as the linchpin of oil supplies to Europe. The Marshall Plan stipulated that Europe's oil supply had to come from outside the United States, because if it came from the United States, it would have affected supplies and the price of oil in the US. And it was in this context that the Middle East, especially Saudi Arabia, Iran, and the smaller Gulf producers, really emerged as the key suppliers of oil to Europe.

Middle Eastern oil was cheap to produce. It was close to Europe. And very importantly, at this moment, the Middle East was basically under the control of the European powers, European colonialism, Britain and France in particular, as the dominant powers in the Middle East through the early 20th century up until the post-war moment. So basically, it's Middle Eastern oil that underpins the transition to oil in Western Europe, and we can see that this is, again, closely connected to American power. So what happens after World War II is those European powers, colonial powers

in the region, in the Middle East region, basically they face various anti-colonial struggles across the whole of the region. There's challenges to British and French colonialism and it's at this point that the U.S. emerges as the dominant power in the Middle East, supplanting European colonialism, supplanting British and French colonialism, building an alliance with monarchies in the Gulf, in particular Saudi Arabia, as well as Iran. And then after 1967, a special relationship with Israel as the other key pillar of American power. So to sum up a lot of things going on in this period,

but there's three post-war transitions that we really need to kind of see as deeply interconnected. Firstly, there's a shift to oil as the dominant fossil fuel globally, and all of the things that that did for capitalism. Secondly, there's a shift to American power as the dominant global political and economic center within capitalism. And thirdly, there's a shift to American dominance in the Middle East, taking over the older structures of European colonialism.

So these three transitions are really deeply interconnected and I think help us to understand both that mid 20th century moment as well as politics today. Yeah, thank you for that. That's super helpful and really important, I think, to understanding the current presence of the US in the Middle East, and particularly the alliances and the way that they were shaped really half a century ago. particularly the alliances and the way that they were shaped, really half a century ago. It makes a lot of sense why these relationships are so unwavering, especially when you think about the US's relationship with Israel, which really was forged in 1967, like you said, that client-state relationship. I also wanted to just go back a little bit to where you brought in petrochemicals, because this really was one of the most fascinating chapters of the book for me.

And I really appreciated your invitation for us to think about everything in our environment, in our lives in terms of like, is this made out of oil? You know, because like more often than not, the answer to that question is yes. Actually, I did that sort of the exercise that you mentioned. I did that just yesterday when I was driving with my partner and I was like, okay, so did you know that the road is made of oil and the tires on my truck are made of oil and my shoes and the gas pedal and the clutch and the panel and the dashboard and the glass, all of that is made out of oil.

And it's really wild to think about. And one of the really interesting things that you talk about in the book, and I actually think it might be worthwhile to just pull the whole quote here, you write, quote, with science increasingly an appuritance to business calculus, the internal organization of firms in the chemical industry was also transformed. Historians of the chemical industry frequently point out that the major challenge presented by petrochemicals for business was not the act of discovering new chemical products. This was relatively straightforward,

given the basic structure of polymers. Rather, the main issue was inventing a use for them. And so it's this idea of manufacturing needs, right, which I think is a very commonplace practice in capitalism. And also some of the statistics from that chapter were really, really wild for me to come across. So you write that, quote, packaging quickly became the largest end use for plastics and now makes up more than a third of the current global demand for plastics. And you also write that only 9% of plastic waste is recycled. And even with that 9%, it's exported from the North

to countries in the global South, where its ultimate fate is usually impossible to determine. Absolutely, yes. It's really, once you start to see oil, and this is really, if you like, the goal of the book is to help readers see oil and the way it is so deeply embedded in all aspects of our society and to understand why that's the case.

So the petrochemical industry is I think a really key part and oil firms today are very open and explicit about the fact that petrochemicals are as they in their words, the lifeline of the oil industry. It's what's going to be the largest source of demand for oil in the future. According to the largest oil firms, they see this as their future. So why is this the case? Firstly, I talked about the transition that took place in the middle of the 20th century, the substitution of natural productsth century, the substitution of natural products by synthetic products produced from oil. And what this did essentially

was made the production of materials like synthetic fibers, like plastics, like synthetic rubbers and so forth, derivative of what had previously been a waste product in the oil industry. So it meant that refineries, the kinds of wastes that were produced in the refinery process, suddenly came with potential useful functions. So oil was no longer just the producing of fuels, liquid fuels, but also these petrochemicals that could be turned into other products like plastics. So that really kind of was a synergy in terms of how the oil industry could utilise both oil as an energy source, but also as a raw material.

So you look at things, for example, to me, one of the most striking examples of this, and it's the one that really to my mind stands out is the idea of fast fashion. I'm sure our listeners today will have heard of this idea of fast fashion, the idea that if we think about the fashion industry today you get multiple cycles, a very quick turnaround of different kinds of clothes that switch within a season, rather than a single season. And much of these clothes end up just being dumped, they become waste. And we know very well that the production of the fashion industry

is built on sweatshop labor in countries like Bangladesh and elsewhere. That's all very true. But it was oil, it was the petrochemical revolution that made possible these synthetic fibers. Oil and petrochemicals enabled the production of clothing that are essentially plastic clothing, and that's the biggest end use now of fiber production, most fibers are actually synthetic, they come from oil. So this fast fashion, which has disastrous ecological consequences, is enabled by oil and the oil industry.

So to me, really kind of learning to see oil around us is really, really key to actually understanding what it does for both capitalism and for the climate. Yeah, no, that example of a fast fashion is, I think, a really great exemplification of how oil really became integrated into the heart of capitalism. It really has shaped the way that capitalism has evolved and sort of revitalized it and created this form of capitalism that we currently live under right now would not have been possible without oil. So I think that's a really interesting example, not just of how oil is used as an energy source, but how it actually

shapes the economic system that we currently live under, which is I think a really, like you said, just one of the most, I think most central theses in your book. I do want to move back to sort of this discussion around imperialism and the way that oil has shaped imperialism. So one of the most interesting aspects of I think the book and something that I hadn't really thought about in depth was the role that oil played in colonialism. We know that, you know, the scramble over resources was obviously a central part of colonialism. But thinking about the way that oil shaped the anti colonial movements as well is something that I hadn't really thought about super clearly. And your book really helped to sort of illustrate that, particularly the examples of Mohammed Mosaddegh and Gamal Abdel Nasser in Egypt. I'm wondering if you can talk about how the movements that were embodied sort of, I guess you could say through those particular leaders, how do those movements help us to understand US

imperialism and the role that oil plays in maintaining US hegemony in the Middle East particularly? And I'm also wondering maybe if you could introduce OPEC to us at some point that might be helpful to help illustrate that. Well, I mentioned earlier the role that the Middle East played in the transition, the global transition to the role that Middle East East played in the transition, the global transition to the role that Middle East oil suppliers played, particularly in Western Europe, and the fact that throughout the early part of the 20th century, the region had essentially been dominated by British and

French colonialism as the key European victors after World War I. So the region had essentially been carved up between British and French imperialism through the early 20th century. Now, what this meant is that as the importance of oil developed through the 20th century after World War II, the anti-colonial movements against the British and the French in the region took on immense importance not just for the British and French, but also for the Americans because of the

centrality of the Middle East to the wider oil transition. Now these anti-colonial struggles that emerged in the Middle East in the wake of the Second World War were integral to a wider global anti-colonial moment in Africa and Latin America and throughout Asia. We saw all across the world the kind of breaking up of colonial structures of power, perhaps exemplified best in the Bandung Conference 1955, which kind of brought together various independent movements and newly independent states. Oil, by the way, was a part of the discussions at Bandung, because really what the anti-colonial struggles and the national liberation movements presented was the question of

sovereignty and the question of how to control national resources within the borders of these newly emerging independent states. So in the Middle East, the question of oil was really key. And Iran was a major part of this. Iran, up until the early 1950s, had been a key part of the British dominance in the region. The Iranian monarchy was basically controlled by the British and Iran was the key base of what became BP, the company we know today as BP. It went through various name changes over history but through the early 20th century Iranian oil produced by BP controlled by the British, controlled by

not just the reserves, oil reserves but also the refining controlled by not just the oil reserves, but also the refining of Iranian oil was the key part of British oil supplies and the British Navy. In fact, the establishment of BP and its ownership by the British government was something that was proposed by Churchill as part of this transition to the naval fleet away from coal towards oil. So Iranian oil was really key to British power. But what happened in 1951 is that a new prime minister came to power in Iran, Mohammed Mossadegh. This was a moment of big street demonstrations,

big strikes in the big oil refinery in Iran. And the key demand being raised by these movements was the nationalization of Iranian oil, taking that oil away from the British and using it and controlling it by the Iranian state. So Mohammed Mossadegh came to power in 1951. One of the first things he did was to nationalize oil. And in response, there was a coup that was organized by the British and very, very importantly, the Americans, actually as the leading force, in overthrowing Mossadegh, bringing back the Iranian monarchy, which became a really key ally of American imperialism in the region up

until 1979. Iran was one of the key pillars of American power up until 1979, when the monarchy was overthrown at that moment in the 1979 revolution. So Iran was a key part of this struggle. The other key anti-colonial national liberation movement was in Egypt, led by a popular Egyptian military officer, Gamal Abdel Nasser, who came to power in 1952 and overthrew basically the British-backed monarchy in Egypt at the time. Nasser, although Egypt wasn't a major oil producer, the demands of Nasser resonated really widely across the region as a whole. Oil was a big part of this. It's at this stage that we see slogans like Arab oil for the Arabs emerging in street demonstrations across

the whole region. The idea that oil and the wealth and the resources of the region should be utilized by the people of the region to help not only break the power of colonialism, but also to address the deep inequalities, the deep marginalization of most of the population in the region. So the question of oil wasn't simply a question of the oil rich countries, it was a regional question about utilizing oil for the benefit of the region as a whole. So this ferment, this period of the 1950s through the 1960s, we see anti-colonial struggles across the whole region, some inspired by Nasser, other kinds of Arab nationalism. We see communist movements, we see leftist movements, we see strong trade unions in various places, even in places like

the Gulf in Saudi Arabia, we see these kinds of movements emerge. And what happens is there are two things that happen actually that are really important to emphasize. One is that essentially these movements are defeated, partly due to Israel and during the 1967 war when Israel moves against Egypt, against Jordan, against Syria, occupying the West Bank, occupying the Gaza Strip, and basically destroying Nazism and that movement in the region. And it's at this moment that Israel becomes the major ally of the United States in the Middle East. And it's to do with the role that Israel continues to play in ensuring American hegemony in the region.

That's one thing. But secondly, the U.S. also builds a close alliance with Saudi Arabia and the monarchies in the Gulf, the monarchy in Saudi Arabia and elsewhere in the Gulf States, and essentially guarantees the survival of these unpopular, undemocratic autocratic regimes, the Gulf monarchies, in return for an unshakable alliance with the United States. So it's these two pillars of American power that emerge Israel on one side, the Gulf States on the other,

through the late 1960s and early 1970s that really form the basis of American interests and influence in the region, as British and French imperialism weaken. So through this process, we see also the slow nationalization of oil and the establishment of OPEC, the Organization of Petroleum Exporting Countries, led particularly by Saudi Arabia in 1960. Perhaps we can talk about OPEC and the formation in a response later, but the key thing is to really see the way that the Gulf and Israel were so central to American power through this period. Absolutely. Yeah. And it helps make a lot of sense to what's going on now in the region with the US's steadfast support of Israel.

Basically, whatever they want to do, the US is behind them. And so it really helps to make sense. You know, this relationship that was really solidified in 1967, like you said, and now, you know, it's been over 50 years and the relationship is still extremely strong. So, yeah, I'm wondering if you can talk a bit now moving into like the 1970s. And, you know, I'm sure our listeners have heard if not you know in depth maybe just passingly about the oil shocks and some of the myths around what happened in the 1970s with OPEC and the oil shocks and I'm wondering yeah you talk about in the book you dispel some of these myths that we think about when we think about this period and you sort of

tell us the actual story and sort of unpack the details of what was actually happening there. So I'm wondering, yeah, if you could maybe just tell us that story and talk about that period. This again is another one of those decades that we can really see as a turning point, if you like, and really bound up with capitalism and changes to capitalism globally. Through the 1960s, as I've mentioned, there was a slow erosion in the control of Western oil companies, in particular those seven sisters, of upstream oil, which if you remember, upstream oil is referring to the crude oil reserves under the ground, the extraction of those oil reserves under the ground.

And if I could just pop in really quick here with a little anecdote, there is actually a podcast called Upstream that is a podcast of the oil industry, I believe, or it's at least about the oil industry, it's called Oil and Gas Upstream. So I just thought that was really funny because I used to see that podcast every time I would like type in Upstream. So I just thought that was really funny because I used to see that podcast

every time I would like type in upstream into Apple podcasts or something they would pop up first back when we were like a much smaller podcast like eight years ago or so. But yeah, I just thought that was really funny because I finally when reading your book I was like, oh, that's why it's called Upstream because of the upstream and downstream processes. So anyways, I just thought that was very kind of a funny thing that popped into my head when I was reading the book. And every time you say upstream now, I think about that. Hopefully this podcast has overtaken that oil industry podcast. Yes. Oh, yeah, we've left them in the dust.

Yeah. So we see in the 1960s, and it's again, it's related to these anti-colonial struggles that are global in nature. Venezuela is a really important part of this. Iraq is a really important part of this. There is a demand to kind of take control of these upstream oil resources, these crude reserves. So oil is nationalized in many parts of the world, in Venezuela, slowly in Saudi Arabia and the Gulf. And I mentioned the establishment of OPEC in 1960 as is part of this process. Now, at this point, we need to see that

up until this point, oil had been controlled by the Western oil companies. And what these companies did was they set an arbitrary price, which was called the posted price, which they used to calculate the tax that they had to pay governments in the oil producing states. So in Saudi Arabia, for example, the oil companies would say the posted price is this many dollars and this is the value at which we calculate how much we need to pay the Saudi government for extraction of the oil

in that country. Now this posted price was not the price at which oil was actually sold because what happened is when they extracted this oil, they would then refine it, transport to wherever it was to be sold, and they would set a market price. And that market price was again set by the big Western oil companies. So oil producing governments like Venezuela, like Saudi Arabia and elsewhere,

were upset about how low the posted price was. They wanted it to be higher so they could get more revenues. So what happened was as oil increasingly came under the control of the producing governments, they were able to force an increase in this posted price. And this set off a spike in the price of oil in 1973, firstly, in what was called the first oil shock, which was between 1973 and 1974, and oil prices basically quadrupled during this time. And then again in 1979, after the revolution in Iran that I'd mentioned, we see another

doubling in what's called the second oil shock at the end of that decade, 79 to 80. So some of your listeners might have been around and remember this period, others, you know, there's a lot of images of queues for petrol stations and imagery that is quite embodies this moment. But there's also a number of myths. And part of what I try to do is unpack some of these myths. One of the myths is that oil prices increased because there was an OPEC embargo on oil. The idea that OPEC decided that we're against the West, particularly because of the West's support for Israel. So we're going to stop selling oil to Europe and to the United States. And that meant that there was an increase in the price of oil.

Now, there was an embargo, and there were initial attempts to reduce oil exports to the US and to the Netherlands and other major European power. But this was not an OPEC embargo. It was an embargo that was undertaken by only some Arab countries within OPEC, not OPEC as a whole. And even more importantly, the embargo didn't lead to any real extended shortfall in the export of crude oil, certainly not to the US or to Europe, the Netherlands. It was really largely ineffectual. The way I describe it in the book is to say that, in my opinion, what countries like Saudi Arabia were trying to do at this moment was to say, look, we are on

the side of Arab nationalism, Arab struggles, so we're going to undertake this embargo, but actually it was pretty much ineffectual and it didn't last for very long. And the reasons because of that is because it's crucial to really emphasize here that Western oil companies controlled the downstream of the industry. So what this meant is that when oil left the ports of countries like Libya or Saudi Arabia or wherever, it was left on ships that were controlled by BP, Shell, Exxon, Mobil and all these other big Western companies. They could basically ship oil wherever they liked around the world. They could substitute oil from one part of the world to another. They controlled the refining of oil.

They also controlled the sale of it to the consumers. So basically they rerouted oil from other destinations to make up for any potential shortfalls. And what do they do with the price of oil? They faced an increase in the posted price, which as you remember is the price that determined how much tax they needed to pay. But what they simply did was increase the prices of the oil products like gasoline, a very logical thing to do. They just simply raised the prices of the final products

they sold. And that's why prices at the petrol pump went up at this moment. So, you know, there's a range of other factors we could talk about here, but I think it's really important to really see this moment of the 1970s as, you know, not a moment in which OPEC led some kind of anti-colonial revolution against the West. I think that's a misleading account of what OPEC became because the major leaders of OPEC, like Saudi Arabia, were really quite integrated into the American hegemony in both the Middle East and globally. Now there was one other very important part of the 1970s that we need to understand as well. And that is that as

this shift to the control of upstream oil came into the hands of the producer governments, these governments were selling oil at a higher price globally, and they were receiving trillions of dollars, what became trillions of dollars in revenues for the sale of this oil globally. And these revenues, we call them petrodollars. It's a term that became popular during the 1970s. They're dollars that earned from the sale of oil. And where that money, where those petrodollars flowed into which markets, into which banks, into which institutions were really hugely consequential to how the global financial system emerged after the 1970s. Yeah, thank you for bringing up petrodollars because I want to ask you more about that in

this question actually, the next question I have for you, you write in the book that one of the primary questions that you set out to answer was to explain how oil, and particularly the wealth that it produced, structured the world economy of the 20th century. So you write in the book, quote, "'It is only by shedding light "'on the supremely political dimensions "'of the economics of the petrodollar surpluses that the enduring imperial contours underlying the making of modern finance can

be revealed. Forms of money and the rise of the euro markets, the dollar's position as international reserve currency, the dominance of Anglo-American financial institutions, the chains of debt, and the rise of neoliberal orthodoxy. These were not the automatic outcomes of dry economic processes centered in North America and Europe, but inextricably linked to the geopolitics of oil and the US presence in the Middle East. So you talk about how the control of oil's wealth more than just the quote territorial power how the control of oil's wealth, more than just the quote, territorial power and the ownership of oil fields, quote, form the roots of our current global financial system and US imperialism.

I'm wondering if you can explain what you mean by this. And yeah, maybe if you could talk just a little bit more, too, about petrodollars and how they work and how they shape the global economic system. Well, we need, again, to answer this, to go back to this moment of the decade of the 1970s. As I've said, through this decade, most of the world's oil outside of the United States fell out of the control of the Seven Sisters. Remember, post-World War II, virtually all of the oil reserves outside of the US and Soviet Union were under the control of these Western companies.

By the 1970s, that was no longer the case. The crude reserves were now pretty much under the control of the main producer governments. Now what this meant, there were three, I think, key points to realize about this shift in the control of oil and its connection to global finance. Three I think main points. The first of these is that despite the fact that oil was no longer controlled predominantly by Western oil companies, it came to be solely denominated in US dollars. So when we hear the price of oil today,

we hear it quoted in US dollars. And this wasn't always the case. It might surprise listeners to know that as late as the 1960s, about 20% of the world's oil was actually sold in British sterling, not in US dollars. It was denominated in sterling. Now I discuss how this happened, like why it became denominated in the dollar, in some detail in the book.

But the key point to emphasize is that it's connected to the US Saudi alliance. Saudi Arabia as the dominant actor within OPEC, as the dominant producer in the Middle East, basically agreed that all oil would be sold in US dollars. And in return, we see this kind of privileged relationship and support of the US to the Saudi monarchy. So this is really important in terms of finance because it meant that any country in the world needed to hold dollars in order to buy

the world's most important commodity, oil. So it became an important part of how the dollar emerged as the leading global currency, which it remains today despite challenges from Chinese Yuan, renminbi and euro and others. But the rise of the US dollar was very closely linked to this oil denomination. So that's the first point. The second thing, as I mentioned earlier, is that producer governments earned trillions in petrodollars through the sale of crude oil on the world market. And they had to do something with this money. And generally, what they did was invest it in the leading Western banks, mostly Anglo American banks, US banks and other British and other European banks.

And they placed their revenues in these banks. And this meant that the leading Western banks came to hold huge amounts of surplus capital through the 1970s. So the structure of global finance, the global financial system, in particularly the place of the city of London and New York and the kind of web of stock markets connected to these markets, the role of Anglo-American financial institutions in these markets, was deeply connected to the rise of oil and the flows of these petrodollars. Again, I go into this in much more detail in the book to try to see how these institutional connections developed. So that's the second thing, the dominance of Anglo-American financial markets connected to the rise of oil. And then the third point here is that the 1970s

was also a time of protracted global economic downturn and crisis, partly related to the spike in oil crisis that we talked about. And what did this mean? Well, it meant that non-oil countries, countries that didn't have oil resources in the global South, who had won to most part their independence and were trying to industrialize, faced a huge problem. On one hand, they faced a world market with declining consumption, problems in exporting to the world market.

And on the other hand, they faced a spike in the cost of the And on the other hand, they faced a spike in the cost of the most important commodity, oil, which was essential to industrialization. So what did these countries in the global South do? They borrowed money from Western banks. Remember having these surplus capital, the petrodollars, and later on from institutions, international institutions like

the International Monetary Fund and the World Bank. Now, most of this money borrowed by the Global South was borrowed in US dollars. And as I said, a large part of it was actually petrodollars that had been recirculated through financial markets in Europe and elsewhere. So what happened in the early 1980s is that the US government raised US interest rates very sharply. And this led to a huge spike in the debt repayments that countries who had borrowed had to pay back. It's a bit like having a mortgage on your house and all of a sudden there's a 20% increase in the mortgage rate that you need to pay back. And this is literally what happened in the 1980s, early 1980s, and it led to what was then described as the third

world debt crisis. So the response to this debt crisis was another shift in the international financial system. And this is where we see the imposition on much of the global South of policies of economic reform, the opening up of economies from Latin America and Middle East and Asia to foreign direct investment, to the privatization of state-owned resources, the deregulation of markets and labor markets in these countries and so forth. All of these policies that were basically imposed on countries that were heavily in debt

and forced to undergo structural adjustment packages by financial institutions like the IMF and the World Bank, and which had devastating social consequences. So the point that I'm trying to make here is that this architecture of the global financial system, the importance of the US dollar, the importance of markets like the city of London and Wall Street, the importance of the Anglo-American big banks,

the debt crisis of the 1980s, the importance of the IMF and the World Bank in restructuring economies through this period, were all deeply connected to oil's place in the global economy and the incorporation of these flows of oil wealth into the wider financial system. So trying to trace these flows, these patterns, these relationships is, I think, really important to understanding where we are today, how we got to where we are today. Absolutely. Yeah, the fallout of those structural adjustment programs, et cetera, are still very much with us today.

And this is a very interesting perspective on the rise of neocolonialism, on the rise of neocolonialism, on the rise of neoliberalism, and of course the continuation in a new form of US imperialism and hegemony over these global South countries. And one other thing, during this period we see really the financialization of capitalism to kind of a peak point, right? And one quote that I wanted to bring in here that I think just, it's just kind of a peak point, right? And one quote that I wanted to bring in here that I think just, it's just kind of interesting to me

and I think our listeners might appreciate it and it's related to all of this before I move on to the next question is you write in the book, quote, these indicators of financialization also point towards a significant change in ownership structures of the leading super majors. The three biggest US oil companies by market capitalization,

Exxon Mobil, Chevron and ConocoPhillips have between 60 to 80 percent of their share ownership controlled by various forms of financial capital, such as investment banks, asset management firms and private equity funds. Playing a prominent role are the world's biggest three asset management firms and private equity funds. Playing a prominent role are the world's biggest three asset management firms, Vanguard, BlackRock, and State Street, which occupy the top three shareholder positions for around a third of the largest publicly listed oil and gas firms in the U.S. So this is just bringing us right back to Lenin and to finance capital monopoly capitalism and imperialism and we see that play out again. So It's such an exemplary example I should say of oil and the role that it plays in US imperialism and hegemony

So I want to skip there's just so much in the book. Obviously we couldn't get to all of it We haven't even talked about the Soviet Union and the role that the Soviet Union played. We haven't talked about so much. But I do want to talk now, because you sort of end the book focusing on climate change, which you talked about at the top of our conversation as being one of your primary concerns.

And I think we'll share that as well. So you talk about you know climate change, its causes and impacts and importantly some of the false solutions to climate change and I'm wondering if you can talk about the role of big oil in shaping climate policy, things like net zero emissions and carbon capture and storage and why these are not just false solutions, but how they actually benefit oil companies themselves. Well, I think it's very clear over the last few years that the power of the biggest oil

companies, the power that they have in steering the world's response to climate change and steering the kinds of climate policies that we see implemented globally. We can see, I mean, at a very clear level, this is in the COP summits, you know, from COP 27 in Egypt, where the biggest exhibition halls were those of the largest oil producers in the world, and the final summit statement was essentially drafted by the biggest oil companies in the world. We can see this in last year's COP in Dubai, which was run by the Abu Dhabi National Oil Company

or the chief executive of the Abu Dhabi National Oil Company. And of course, this year's COP plan for Azerbaijan, another major oil producer globally. So all of these, I think, shows that the debate, the discourse, the decisions that we see implemented to deal with the climate catastrophe are really deeply shaped by the power of the largest oil firms in the world, whether they be Western oil firms or oil firms in the Gulf and elsewhere. I think we see an alignment on both sides with this involvement in climate policy.

But beyond, I think, these summits, I think it's also clear that the menu of so-called climate solutions that are really being promoted by various, by most governments, I think, are really false solutions. These are, I think, techno fixes, and they really don't stand a chance of actually reducing emissions in any kind of meaningful way, and it's certainly not in a way that's fast enough to deal with the unfolding crisis. So, in the book, I discuss a variety of these kinds of techno fixes, things like biofuels and bioenergy, hydrogen, which is a major one and very problematic, electric vehicles and carbon capture, which you mentioned in the question.

I think maybe carbon capture is really one of the most dangerous approaches that underlie climate policy today. For your listeners who may not know what this refers to, the idea of is called carbon capture and storage or CCS, which refers to capturing the carbon that is produced in manufacturing or other industrial processes, and then taking this captured carbon and storing it underground or using it in some other sector. So the idea is that we can keep on producing, we can continue to grow production and so forth. We'll just capture this carbon

and we'll sequester it away from the atmosphere and that way it won't have a damaging impact. Now, there are huge numbers of problems with this as an effective solution to the climate crisis. The first of these is that CCS or carbon capture and storage was actually developed by oil companies themselves back in the 1970s. And it was developed so that they could use it in something called enhanced oil recovery, enhanced oil recovery. What they did was capture CO2 and then injected it into oil fields where oil was difficult to extract,

and this helped them capture this difficult to extract oil and enable them to boost oil production. So CO2 was used to increase oil field production in these kinds of, through this process. Now today, about 80% – I just want to pause on this figure for a second because I really think it shows what this solution actually represents – all carbon captured in CCS projects, operational CCS project, is actually earmarked for enhanced oil recovery. So these are statistics that come from the industry itself. And it shows very clearly why oil companies are so enthusiastic about this process. It not only enables them to say, well, we're dealing with climate change. We have this solution and we want to implement it.

There's a whole lot of subsidies coming from Western governments for this, but it enables them to actually increase levels of oil production because this carbon is earmarked for enhanced oil recovery. So that's one major problem. The second major problem is that basically the scale at which these plants are operating pales in comparison to the amount of emissions that we currently produce. In 2023, there were 41 operational carbon capture plants

globally, and they captured about 49 million tons of carbon, but global fossil fuel emissions in the same year were 37 billion tons. So we can see this massive gap between reality and need. This is basically an untested, unproven technology, doesn't exist at scale. And in the real world, it's actually being used to increase oil production. So it's I think, a

very clear example, we can see this replicated, I think, in other sectors of climate policy, hydrogen is another example. Basically, we see these technologies being pushed in a way that green washes, to use that term, the efforts of oil companies. There's no contradiction. These oil companies are very explicit about this in the expansion of fossil fuel production and the growth in these kinds of technologies. They are simply another quiver in the bow of the profit-making activities of oil companies. They're not an alternative in any way to to fossil capitalism. So i'd like to to close out by reading a quote from the closing pages of your book and then maybe just ask you my final question

So this is a bit of a longer quote, but it's a really good one And I think it's definitely worthwhile to read the whole thing here. And just again, there's so much that we have not gotten into, so, so much in this book. So this is really just, you know, we're just picking some of the parts out and analyzing those, but there's so much more to the book. So definitely want to make sure that anybody who wants to dive deeper goes and checks out the book when it comes out on September 17th But yeah, so the final quote here and then I'll just ask you my final question

as We have seen throughout this book behind the oil industry lies deeper structural Forces that have embedded oil into every aspect of life across the 20th and 21st centuries have embedded oil into every aspect of life across the 20th and 21st centuries. Beyond its central roles as energy and transport fuel, oil and its derivatives underline all forms of commodity production. Our food and our financial systems rest on oil. Oil centrality stems from what it does for the imperatives of accumulation, its ability to accelerate and expand capital's turnover, cheapen the costs of production, including labor, and knit

together an international market. No other commodity plays this role. The immense power of the firms that make up Big Oil and their close association with the rise of the US through the 20th century, stems from this foundational place in capitalism. For this reason, while these oil firms are indeed a major obstacle to ending our dependence on fossil fuels, they are a manifestation, not a cause, of the underlying problem. We must confront the multiple logics of a social system that has served to center oil throughout all aspects of our lives,

and we cannot extricate ourselves from oil's pervasiveness, certainly not at a pace necessary to halt runaway climate change, while remaining within this social system. So, I want to ask you, if the climate crisis is part of this social process, I want to ask you if the climate crisis is part of this social process, what must be done to address it? How do we break the chains and what does that look like? Well, this is really the most important question and I think there's so much that could be said and so many other people have also obviously written and spoken and are active around these kinds of questions. I think the starting point is that we need to recognize capitalism and we need to move beyond capitalism. That's the simple answer. We can see what happens

when we leave addressing the climate crisis to capitalist governments and to corporations, including the oil industry. There are multiple ways that these false solutions get advanced. And basically we end up with commodified and market driven technologies that really only serve to complement the continued growth of fossil fuels. And that's the reality. They do not make any change to the existing system or to the logics of the existing system. So we need a systematic or systemic transformation that brings democratic control over energy and technology and which really, I think, comes to operate on a different kind of logic to the endless accumulation that really does define

and really does drive capitalism. What does that mean? It means prioritizing social needs and recuperation of the planet. Some activists and other writers use the term eco-socialism, and I think this is a good term because it does foreground the necessity for systemic change, but ecologically centered systemic change. It foregrounds the necessity to change the way that we produce and consume. So, you know, if we think about what could we do immediately, I mean, there are many things that could happen. We could dismantle the major oil companies and the major polluters. We could use their enormous skills and resources and networks and global technologies to push the phase out of fossil fuels, support a genuine green transition,

not what is currently on offer. We could demilitarize. Today, the biggest institutional producers of emissions is the US military. This is the biggest source, institutional source, individual source of emissions globally. And these emissions are not even counted in things like the Kyoto Protocol or the Paris Agreement.

They're excluded from the accounting of carbon. So demilitarization is really a key part of reducing emissions. There are other things we could do. We need to redefine urban spaces, shifting our transport away from this kind of individualized automobiles, which EVs, electric vehicles, are only automobiles, which EVs, electric vehicles are only another manifestation of, towards well-funded, green, free public transport, pedestrian walkways, bike lanes, etc. All of these things that make cities so much more livable and would do so much to dealing with fossil fuel-centered ways of life.

There are many other things that could be said, but one of the things I try to point out in the book is that there's no technical or material reasons why these kinds of demands could not be immediately implemented. There's no barrier to that happening. The only barrier is social or political. And that's why we need to name the problem as capitalism, because that's the problem. And I think if there's any one message that listeners come away with, it's this idea that we need to make the system that appears invisible, visible if we're actually going to be really effective in tackling the climate

catastrophe. And I think the other point that's really important to perhaps end with here is that all of this shows how ecological concerns, I think, need to be integrated centrally into other movements for social and economic and political justice. It's very clear the last few years, the last summer, has unequivocally demonstrated this, that the effects of the climate catastrophe are going to be felt and are felt most harshly by those who are most marginalised, and this unfortunately will get worse. So this means that we need to see the climate crisis, and the left needs to see the climate crisis, as a central political question that can't be separated

from all the other ills produced by our social system. It's not just another add-on to the laundry list of problems associated with capitalism. It actually is inseparable from dealing with this dysfunctional system and moving beyond this dysfunctional system. upstream Patreon episode with Adam Hinea, a Palestinian professor at the Institute for Arab and Islamic Studies at the University of Exeter. He is the author of lineages of revolt, issues of contemporary capitalism in the Middle East, published by Haymarket Books, and most recently of Crude Capitalism, Oil, Corporate Power,

and the Making of the World Market, published by Verso. Please check the show notes for links to any of the resources mentioned in this episode. Thank you to Berwin Mirror for the cover art. Upstream theme music was composed by Robert. Thank you to all of our Patreon subscribers for making Upstream possible. We genuinely couldn't do this without you. Your support allows us to create bonus content like this and to provide most of our content for free so we can continue to offer political education media to the public and help to

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