Oil field in 1940
An oil field in Marion County, IL (1940). Arthur Rothstein / Library of Congress

Too much oil

We tend to associate oil and crisis with high prices and scarcity. Yet when prices plummet — as they have over the last few months — it creates a different kind of problem for oil producers. As this shock reverberates through the state coffers of Russia and Venezuela, and the oil fields of Texas and North Dakota, how might the Left respond?

Certain provinces of the Left are no doubt befuddled by the development, long confident that humans were exhausting the earth’s oil supply. From Michael Klare to John Bellamy Foster, many during the 2000s also assumed peak oil and scarcity underpinned American imperialist adventures in Iraq and beyond. In this view, powerful corporations and states collude to secure access to dwindling oil reserves and the attendant money and power. The insatiable drive to extract more oil, in other words, is the primary concern.

But as the radical left collective Retort observed a decade ago: “The history of twentieth-century oil is not the history of shortfall and inflation, but of the constant menace — for the industry and the oil states — of excess capacity and falling prices, of surplus and glut.” The problem right now — for oil producers and those of us concerned with climate change — is that there is too much oil.

What of peak oil? The Energy Information Agency (EIA) recently estimated that in 2015, the US will reach an oil production level of 9.3 million barrels per day — a mere 300,000 barrels shy of the 1970 zenith that peak oil proponent M. King Hubbert famously predicted in 1956.

It is possible that the massive boom in fracked “tight oil” from shale formations will “reset” US peak oil nearly fifty years after it supposedly occurred. But peak oil proponents consistently underestimate the capacity of capital to revolutionize the technical capacity to profitably access new deposits.

Timothy Mitchell points out that as much as oil capital seeks out new frontiers of production, it is equally concerned with keeping oil off the market to ensure profitability. If too much oil is accessed and supply is increased, profitability becomes impossible. While oil companies have enjoyed high prices and record profits over much of the last ten years, elevated oil prices (and their mega profits) have proven too tempting to producers, resulting in overproduction and glut.

On the consumer side, the return of cheap oil is often heralded as a positive development for workers and the economy. And indeed, in the United States, cheap gas is one of the few reprieves for a working class beset by unemployment, stagnant incomes, and debt.

But the labor movement can’t expect improvements in living standards to come via the gasoline pump. Whatever the momentary benefit from filling up at under $2/gallon, the collapse of oil prices is extremely dangerous for society as a whole. If the remaining oil (and coal and gas) on the planet is burned, it will become impossible to mitigate the (already perhaps unmanageable) effects of climate change.

Moreover, the threat is not just from the enormous amount of untapped fossil fuels, but a sustained period of low fossil fuel energy prices, such as occurred in the 1950s–1960s and the 1980s–1990s. Historically speaking, fossil-fuel-powered capitalism experiences sustained periods of cheap energy prices — the price booms are the exceptions. And, cheap energy stymies the political will (if it exists at all) to change our energy system.

The problem is that the United States has an energy policy that is primarily directed by the price swings of volatile energy markets. Climate change is a market failure of planetary proportions, and we cannot expect the booms and busts of energy markets to guide us toward a clean energy future.

As Naomi Klein and Christian Parenti (among others) have persuasively argued, climate crisis is so dire that it will take nothing less than a “war-like” mobilization of the public sector (state planning, punitive taxes, and massive subsidies for clean energy) to shift our economy away from fossil fuels.

A left approach to energy must take its provision back from the market, prioritizing ecological and social welfare over price signals. Energy should be viewed as something akin to education, health care, or water sanitation: something so fundamental to the collective good that it cannot be ceded to market forces and the profit motive. Yet unfortunately, market prices have, more than anything else, guided US energy policy over the last few decades.


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On Sept 19, 2023 ahead of the Climate Ambition Summit in New York City, climate activists gathered for a rally and civil disobedience outside Bank of America Tower in Midtown Manhattan as part of the March to End Fossil Fuels wave of actions resulting in multiple arrests. Activists demand Bank of America to “Defund Climate Chaos and Defend Human Rights” Photo: Erik McGregor (CC BY-NC 2.0 Deed)

Let’s Save Each Other

Let’s Save Each Other

Illustration by Stephanie McMillan. Used with permission