Today's oil and gas deposits are more remote, require more processing, and are more 'sour.' In photo
Today's oil and gas deposits are more remote, require more processing, and are more 'sour.' In photo: an NIS Gazprom oil and gas refinery in Serbia. Photo by Bloomberg
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The Race for What’s Left
The Race for What’s Left.

The Race for What’s Left:
The Global Scramble for the World’s Last Resources, by Michael T. Klare. Metropolitan Books,
320 pages, $27

This past August, a small credit union, Vancity, in Vancouver, British Columbia, divested from the Enbridge corporation, a major Canadian player in the transport and delivery of oil and gas, including a controversial project to build an oil pipeline from the interior of the country to its Pacific coast. The move was soon copied by the city’s Unitarian community amid murmurs that other religious groups might also consider divesting from Enbridge.

Ordinarily, shareholder action by small financial cooperatives and churches in a provincial city at the continental edge of the Americas would not merit more than local mention. Enbridge is not Exxon, Vancity is not J.P. Morgan. Although Vancity is Canada’s largest credit union, Enbridge will lose just $2.5 million from the divestment, significantly less from the Unitarians.

Oil, gas and mining corporations like Enbridge - sometimes called the “extractive industries” - consort with an investor class whose scale of money and influence is not diminished by the lone gestures of individual banks or parishes. The question, however, is whether these small-scale moves might somehow become part of a wide-scale movement.

For 20 years, the climate-change wing of the environmental movement tried to persuade individuals to change their consumption patterns, and lobbied governments to redefine the rules of the marketplace, hoping this compound of personal choice and legislative authority would facilitate a transformation to the post-carbon economy and alter Earth’s collision course with climate change.

Both campaigns failed, miserably. Individuals, it turns out, are neither morally compelled by environmental prophecies, nor enabled - because of the terrible design of cities, among other things - to, say, drive 80 percent less and still get children to school, go to work, shop for food and keep their lives afloat.

Government, we learned, is less powerful than the fossil fuel monopolies whose corporations have no intention of winding down or altering their businesses to support the international and intergenerational public good. Just the opposite: The clearer the evidence of their products’ harm, the more intensely they double down.

Vancity’s withdrawal from Enbridge may well be the first experiment in which an international campaign divests from fossil fuel corporations. This idea comes from the American environmental writer and activist Bill McKibben, whose book “The End of Nature” became the first popular book about climate change when it was published in 1989. In August 2011, McKibben called for environmentalists to make a tactical change: a departure from white papers and advocacy campaigns, toward a movement of nonviolent protest and civil disobedience.

As the first target, McKibben selected the Keystone XL, another pipeline project proposed by another Canadian company that would carry tar sands - an especially heavy, sticky, ultra-carbon-loaded fossil fuel - from northern Canada to southern Texas. Despite winning a partial victory when the Obama administration delayed the onset of the project, McKibben cautioned that the keystone victory was temporary, and only part of a longer struggle to weaken the fossil-fuel companies. Recently, in an article in Rolling Stone, McKibben proposed taking a page from the anti-apartheid movement by divesting from oil corporations.

Whether Vancity’s divestment starts a wave or vanishes like so much vapor, the layperson’s key to understanding these pipeline politics is that they have nothing to do with oil or natural resources as we once knew them.

The tar sands that would flow through Keystone and Northern Gateway are sometimes called an “unconventional fuel.” Mostly, the images people have of resource extraction come from movies. In films, when a geologist discovers an oil well, it is always a gusher, exploding from below like a geyser that needs only to be pumped. So too with gold: We think of miners plucking plum-sized nuggets while standing knee-deep in rivers.

In reality, the light sweet crude that once was found near the surface of the earth is nearly exhausted. The deposits on which we now rely for expanding the oil and gas industries are deeper, more remote, require more processing, and are more “sour” ‏(meaning mixed with more toxins‏) than in the previous generation. Likewise, 100 years ago, gold-mining companies sneezed at deposits whose ratio of gold in a ton of earth ? the grade ? dropped below one ounce, or roughly 30 grams. Today, the grade is considered exceptional if it exceeds one gram per ton.

A cause of conflict and war

According to Michael Klare, the age of easily accessible “conventional” resources is over. We have entered a period of scarcity and are witnessing the emergence of the age of “unconventional” resources. In “The Race for What’s Left,” Klare, a scholar and journalist, has written an urgent book that is a like primer for this new age, methodically surveying an obscure universe of geological exploration, mineral politics, technology and land acquisition that he believes will make resource competition increasingly dominant in geopolitics, a cause of conflict and war, and a “threat to the safety and stability of human society and the natural world.”

Carefully, Klare chronicles the transition from last century’s relative accessibility and abundance of resources like oil, coal, gold, iron, copper, zinc and other minerals, to a world of depletion, where meeting global demand for resources requires drilling deep into the ocean; capitalizing on the melting of Arctic ice to mine the gas beneath it; turning the asphalt-like tar sands into synthetic crude; entering the world’s most dangerous countries to mine iron ore and gold; battling the Chinese for the so-called rare earth minerals upon which digital technology depends; and, not to be forgotten, rich countries monopolizing land in poor countries to grow food in a world where not only minerals but wheat, rice and other staples are increasingly expensive.

Klare, who teaches at Hampshire College in western Massachusetts, is among the few national security writers who have consistently integrated the subjects of resources and geopolitics over the last 20 years. This included a 2001 book called “Resource Wars,” whose prognoses were drowned out by the bin Laden-Bush era, when resource-based foreign policy theories were dismissed as backbench threats superseded by Islamism and ethnic war.
But there is a different quality to Klare’s latest installment. “Resource Wars” was principally a horizontal book ? future-focused and predictive ? pointing to looming crises over natural resources if certain alliances collapsed or resource scarcities emerged. The distinction between “Resource Wars” and “The Race for What’s Left” is that Klare is dealing with conflict, abuses, violence and systemic instability, a world in which the future is the now.

Narrow profit margins

A decade ago, the profit margins for unconventional resources remained too narrow to make them efficient for corporations to exploit. But since then, the prices of natural resource commodities have doubled, tripled and quadrupled, eclipsing record highs, igniting historic expansion in the extractive industries, and, at last, improving the margins for hard-to-access resources. Meanwhile, the rise of digital technology, as well as of consumer classes in China, India, Brazil and other emerging economies, revolutionized demand for new resources. In one illuminating example, Klare points out that whereas in the 1980s Intel needed 11 minerals to manufacture its products, today it requires nearly 60.

Klare is a forecaster whose data come principally from newspaper and magazine reports. If there is a weakness in the book, it is the absence of fieldwork and reportage. This would be frustrating, except that his forecasts are astute, especially the observation that the unconventional age demands ever greater monopolization.

“As the race for what’s left gains momentum,” he writes, “ ...predatory behavior will become more frequent and brutal. With the number of promising projects declining and market pressures growing more intense, resource firms will see no option but to feed upon one another in the endless pursuit of valuable assets. Inevitably, many smaller and weaker companies will disappear altogether or become acquired by these more successful rivals; only the most powerful will survive.”

As much as Klare’s synthesis of the unconventional age is accurate, the absence of reporting from the field is relevant because, as frightening as his bird’s eye may be, the view from the ground is even worse.

Dam and divert

In 2008, I visited a mine that was under construction in the drylands of West Africa, an area where the only irrigation source is a river that runs, at best, for two to three months during the brief rainy season. Mines require enormous volumes of water. The plan was to dam and divert the river to feed the mine. “What about the people who rely on the river downstream?” I asked the company’s in-house sociologist. “This is a question we do not discuss out loud,” he answered chillingly.

Even during the age of conventional resources, monopolization was the ideal. For example, when the Rockefellers’ Standard Oil company discovered there was a fortune to be made in copper at the outset of the electricity revolution, it consolidated all the claims around Butte, Montana, to create Amalgamated Copper, the largest producing and fabricating copper company in the world. After defeating all competitors, Amalgamated mined 12.5 percent of the world’s copper, smelted 18 percent, refined 22 percent and fabricated 20 percent - a monopoly that was soon busted by President Theodore Roosevelt.

But the difference between the economic strategy of Amalgamated and the economic realities of our unconventional age is that the Rockefellers formed monopolies because they could: Today, companies monopolize because they must.

Consider that at the height of the gold rush of the late 1890s, Herbert Hoover ‏(his generation’s top mining engineer‏) started a gold mine in the outback of Western Australia. The mine thrived for 65 years, during which it processed - in total - 7 million tons of earth. Because so little gold remains in the earth, in order to turn the profits sought by investors, a comparable gold mine today processes 5-10 million tons of ore per year.

Thus, the order of magnitude is now so great that the only way resource corporations can thrive is by monopolizing every parcel of land, owning each particle of ore and controlling all access to water. The governments that host these operations argue the foreign investments will be “win-win”: The companies will extract the resources, as the hosts turn taxes and royalties into enduring growth and development.

There are two problems with this theory. In the short run, monopolization of land and resources leaves no room for the smallholder economies of farming, mining and fishing upon which people depend in the rural and developing societies where most mining occurs. While the resources are being extracted, local people are often driven deeper into extreme poverty and all the disease, morbidity and suffering that accompanies this scourge. Long-term, if there is one rule we already know about the unconventional age, it is that its expansionary path increases demand for energy, water and land, just as climate, aquifers and soils are reaching intolerable stress levels. Whatever taxes and royalties are collected, they will not even approach the costs of restoring the earth to make it habitable and fertile. Rather than leveraging the present to support the future, governments and resource corporations are ensuring the future is a wasteland.

Anybody who still does not believe how intensely resource corporations are maneuvering to set political conditions needed for the unconventional age would do well to remember that in a single month this summer, the oilmen Koch brothers in the U.S. spent $14 million on ads supporting the allegedly more pro-business Romney campaign.

Still, we live lives of “selected fictions,” as the novelist Lawrence Durrell put it, telling stories along a curved surface we imagine is flat. There is a powerful impulse to wish away the conflicts of the unconventional age, to pray for technological solutions or revelations that our science is wrong, where over the lip of the curved surface is a future where things are simply better.

Our fictions are so selective that we remain attached to a pretense that these conflicts are distant stories belonging to the hinterlands of sub-Saharan Africa or the steppes of Asia. For all his cogent realism, Klare, too, has a tendency toward this fiction, writing: “For the most part, these lands are being sought in poor and war-torn African countries, whose own leaders are desperate to attract fresh investment no matter how problematic the circumstances.”

It is true that a major push for unconventional resources is taking place in the toughest, most remote, neglected corners of the world: Many of the prizes are in the warlord-controlled regions of Afghanistan and Congo, drought-devastated Mongolia, guerrilla-dominated mountains of Colombia, and unstable post-war nations like Liberia and Sierra Leone.

But the unconventional age is so much closer than we pretend: Fracking for gas in Ohio and Pennsylvania, stripping the tar sands from Canada, deepwater drilling in coastal Louisiana and Israel. Wherever we look, the game is on and it is alarmingly intense.

The arrival of the unconventional age comes at the precise moment when all energies ought to be focused on renewal and restoration of the victims of the toxic legacy we inherited from the conventional age of resource extraction. Instead, the businesses that have already brought us to the brink of poisonous collapse are once again scraping the bottoms of the earth and ocean for what remains, at all costs.

Michael Klare’s prediction that the unconventional age will destabilize the world is, unfortunately, already behind the curve. In sub-Saharan Africa, resource companies operate in powder kegs of violence and unrest. In Latin America, mining expansion is a populist cause that, as in Peru, topples governments. And, finally, in North America, the politics of pipelines are proxies for grassroots efforts to find some way ? be it divestment from fossil fuel corporations or other means ? to challenge the monopolistic grip of the extractive industries and investor class on government.

Shefa Siegel is an associate research scholar at the Vale Columbia Center on Sustainable International Investment, a joint center of Columbia University’s law school and Earth Institute.