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Leif Wenar- Blood Oil

Apr 21, 2017Oil

From 1807, Britain tried to suppress the Atlantic slave trade until eventual success its 1867. In the late eighteenth century nearly everyone of influence or power in Britain had a direct or indirect interest in the slave trade. In 1805–1806 the value of British West Indian sugar production reliant on slaves equaled about 4% of Britain’s national income. Kaufmann and Pape suggest that Britain voluntarily forgoed 4% of national income, essentially for 60 years. By modern standards, the suggestion of embarking on a moral campaign and being willing to forgo such a magnitude of GDP seems almost unthinkable. Yet this is precisely the sort of brave thinking that Leif Wenar brings in his book Blood Oil: Tyrants, Violence, and the Rules that Run the World. Wenar’s is a thought provoking exploration of the morality of oil supply. He introduces the expression ‘Might Makes Right’, meaning that whoever possesses the oil gets to profit from it. Wenar draws the analogy of a criminal gang stealing a fuel delivery truck, driving it down the road, and selling the fuel. Of course this seems absurd. But Wenar claims that this is essentially what is happening in the realpolitik of oil producing countries – we are all responsible for buying stolen goods and indirectly supporting dictatorships – think Putin, and Wahhabism in Saudi Arabia. Wenar is not anti-oil per se, but advocates a form of Clean Trade in oil as a moral solution.
Wenar makes a compelling moral argument, but I think he vastly understates the value of oil in modern society. This is the crux of the problem and why the US embarked on two grand bargains in the 1970s after US oil supply peaked – the US sought to control oil supply by undermining oil-producing democracies with oil-to-arms deals; and entered into private banking agreements to ensure that petrodollars flowed back to the US and regions that ensured US influence.
The thing I find interesting is that many environmentalists advocate the decommissioning of dams, abandonment of nuclear, coal divestment, bans on gas fracking, but nobody willingly ‘gives up’ oil. If humanity could fix its global energy problems by forgoing 4% of national income, I suspect a sizable minority would be willing to participate. But it’s not that simple. Oil is the master energy source. Such is its importance that it has a role as a quasi-monetary commodity. Economic prosperity is unfortunately going to remain tied to oil for the foreseeable future. Are electric vehicles the answer?
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