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Behind the So-Called “Energy Crisis”

by Chang Chien

[This article is reprinted from Peking Review, #11, March 15, 1974, pp. 5-7.]

THE major capitalist countries are going through a serious “energy crisis.” The oil supply shortage has caused production and living conditions to be affected by a “petroleum shock.” Prices are soaring in step with oil prices and stocks are falling in the face of bleak economic prospects. International political and economic relations also have been influenced by the “energy crisis.” The situation is being widely discussed. Some bourgeois newspapers and journals abroad blamed the “energy crisis” on an “exhaustion of energy resources” while others absurdly reproached the Arab people with using oil as a weapon. These assertions which evade the heart of the matter or shift the responsibility on to other people are simply designed to create confusion and mislead people.

What is it really all about?

The current “energy crisis” takes mainly the form of an insufficient supply of oil. While on the surface it may be a question of natural resources, in reality this is absolutely not so. The world’s energy resources, including those of the main capitalist countries, are plentiful. Furthermore, with the development of production and the steady rise of human knowledge, people are discovering and will continue to discover new sources of energy. In essence, the “energy crisis” gripping the capitalist world is a reflection of the crisis of the capitalist system, an outcome of the sharpening contradictions within the capitalist-imperialisi system, and a result of the monopoly capitalists’ ruthless exploitation and nefarious plunder of the people at home and abroad; today, it is also a direct result of unbridled foreign expansion and rivalry for world hegemony by the two superpowers, U.S. imperialism and Soviet revisionism.

Under the capitalist system, “production of surplus-value is the absolute law of this mode of production” (Marx, Capital). The nature of the monopoly capitalist class is to seek fabulous monopoly profits. In exploiting energy resources, the capitalists do not consider the rational use of natural resources but only seek maximum profits. The decrease and increase of the various energy resources often depend on the amount of profit they give. Once the main source of energy, coal was known as the “food of industry.” Today, though there we still very rich deposits of coal, the industry in general has declined in the leading capitalist countries. Even in the United States, which has the biggest reserves, coal accounts for only one-fifth of its energy production. The reason is that as it is much more profitable to exploit oil than to mine coal, the capitalists have, therefore, preferred to set coal aside. Although, oil c also be extracted from oil shale and oil sand, they have not been exploited proprely, because the capitalists are not interested; they find that extracting oil from shale and sand is less profitable than direct oil exploitation and therefore cannot satisfy their ravenous appetites.

Capitalism means waste. In the capitalist world, large quantities of petroleum are wasted because of anarchy in production and general wastefulness in life. A large amount of precious oil has been freely abandoned underground because indiscriminate drilling destroyed oil-bearing formations, or because pressures were lowered so much by drawing oil recklessly that it no longer could be made to flow out, etc. It is estimated that the present rate of oil recovery is only 35 per cent in the United States. In other words, for every ton of oil obtained, two tons are abandoned. As to lavish waste in consumption, this is even more shocking. Nowadays, electricity for non-productive use in the capitalist countries takes up one-third to one-half their total electric power output. The U.S. press admits that half the energy consumption in the United States is wasted.

Wild arms expansion and war preparations by imperialism and social-imperialism and their wars of aggression are bottomless pits in consuming and squandering oil. This is the basic reason why the “energy crisis” has hit the so-called developed capitalist countries when the world’s energy resources have never been so rich and varied as they are today. As some Americans say, the blame lies not with Mother Nature but with Uncle Sam.

Imperialism means aggression and plunder. In view of the economic and strategic importance of oil and also because it is more profitable to grab oil abroad than to exploit it at home, the monopoly capitalists often leave domestic oil unexploited and swarm to plunder the oil of the Third World countries. They have a special interest in the Middle East which has rich oil deposits and occupies an important strategic position politically and geographically.

Two-thirds of the world’s proven oil reserves are in the Middle East. Cost of exploitation there is very low as the oil beds are fairly shallow, the rate of success in well drilling is high, output is big and labour is cheap. For example, in Kuwait the cost of extracting one ton of oil is only one-twentieth of that in the United States. Middle East oil has become a golden stream yielding fabulous profits for foreign monopoly capitalists. The Middle East has long been a centre of contention among the imperialist countries.

Since World War II, the United States has replaced Britain as the biggest plunderer of Middle East oil resources. At present, U.S. monopoly capitalists control more than half the Middle East’s oil production. Direct U.S. private investments in Middle East oil amounted to 1,800 million dollars by the end of 1972 whereas U.S. profits from the investments was 2,400 million dollars that year alone. The profit rate was as high as 130 per cent, or 10 times the average for all overseas U.S. investments. The temporary and false prosperity of the imperialist countries in postwar years is built on the natural resources and the blood and sweat of the people of the Third World.

Governed by the same laws as imperialism, Soviet revisionist social-imperialism, too, has great ambitions and has joined the ranks of imperialism in carving up the world. Incapable of exploiting some of its own oil resources, it has to throw its doors open to Western countries and beg for their investments. On the other hand, it has long cast a covetous eye on Middle East oil and taken pains to penetrate the Middle East to contend with the United States for oil hegemony in the area. To this end, it has spared no expense and has laid down more and more stakes in the form of “military assistance” and “economic aid.” It has in fact grabbed enormous profits by going in for piratical or speculative deals through “arms for oil” and “machinery for oil.” By re-selling a country’s natural gas, Soviet revisionism made a very big profit of 300 per cent. Its tactics in plundering the Middle East oil are indeed far more cunning than those of the Western imperialist countries!

The Arab countries and other oil-producing countries of the Third World have therefore long been the real victims as far as oil is concerned. The small and medium-sized countries which possess and supply oil in abundant quantities remain underdeveloped, while the countries consuming huge amounts of oil supplied by those countries have become rich and developed.

Where there is oppression there is resistance. This unreasonable state of affairs has compelled the oil-producing Third World countries to rise in struggle to safeguard their state sovereignty and national resources. The Arab countries have been fighting shoulder to shoulder against Israeli Zionism and its supporters with the oil weapon by curtailing oil production and raising the price. This is the direct result of Middle East collusion and contention by the two hegemenic powers, the United States and the Soviet Union. Both want control over the Middle East because of its strategic position and its oil resources.

In essence, the question of oil is what is behind the Middle East question and closely tied to the scramble for world hegemony. As one Western journal said: Whoever gets the oil controls the world, particularly Europe which relies on the East for its oil. It is precisely for this reason that the two hegemonic powers, paying no heed whatsoever to the interests of the Arab people, have long imposed a no war, no peace situation in the Middle East and supported and connived at Israeli aggression. This situation has forced the Arab countries to rise in resistance. Their struggle by means of oil is against imperialism and hegemonism. The two hegemonic powers can no longer exercise complete control over the Middle East situation and plunder other countries as they please. The oil crisis is no more than an indication of their hegemony crisis.

The great repercussions in the capitalist world caused by the Arab countries’ use of the oil weapon have answered more clearly the question: Who feeds whom in the world today? In the past, the imperialists always claimed that they have kept the people of the developing countries alive. They asserted that without their “aid” the latter could not live a single day. Now the oil struggle has shown once again that it is imperialism and social-imperialism that could not live a single day if they stop their enslavement and exploitation of the developing countries. They are indeed parasites living on the people of the developing countries. Their wealth comes from their plunder, and the poverty of the Third World is caused by their exploitation and plunder. The oil struggle has emancipated the people’s minds, further increased their awakening and strengthened their unity. This will have far-reaching effects on the struggle of the world’s people.

The “energy crisis” is an indication of the great disorder in the world today. It will in turn inevitably make the world situation continue to develop in the direction of upheaval. The contradictions of imperialism—particularly the contradictions between the two hegemonic powers on the one hand and the people of the world on the other and the contradictions between the two hegemonic powers themselves—are now becoming increasingly acute. In their sharpening contention in the Middle East, the United States and the Soviet Union are facing each other with swords drawn. They will not give up their interests. The spokesmen of U.S. monopoly capital are now energetically playing up the “energy crisis” to shift the burden of the crisis on to the American people and seek more profits for themselves. But their main purpose in doing so is to put pressure on the Third World and step up contention with Soviet revisionism in order to protect their vested interests in the Middle East.

To contend with the United States for domination of the Middle East, Soviet revisionism, while pretending to support the Arab people but actually betraying them, is doing all it can to spread the theory that Middle East oil is “international property.” It has alleged that “despite the fact that Arab oil is—in form—the property of the Arabs, it actually is international property.” This fallacy is obviously directed against the Arab world and is an assertion that imperialist plunder is justified. It is also directed against the other superpower’s hegemony over oil and is like saying: You should not take it alone. I must have an equal share of the interests with you. This imperialist drivel shows that Soviet revisionism is the vicious enemy of the Arab people and also reveals the wild expansionist ambition it has inherited from the old tsars towards the Middle East and the Persian Gulf region. However, times have changed and the Arab people are no longer at the mercy of others. They have taken up the oil weapon and other weapons to fight in defence of their national independence, sovereignty and the right to live.

As for talk in Western countries that the world’s energy resources are becoming exhausted, it is nothing but pessimistic groaning by the decadent class. It always describes its own crisis and doom as the approaching doomsday of the whole world. Under the law of conservation of matter, matter does not die. Nature provides mankind with unlimited energy resources and mankind’s ability to understand and conquer nature is unlimited and will not remain at a particular level permanently. This has been fully proved by the progress from producing sparks for a fire by rubbing two sticks together or striking a piece of flint to today’s use of coal, petroleum, and atomic and solar energy. Not only is the variety of energy resources increasing steadily, but uses of various kinds of energy resources are also developing and expanding.

Therefore, all pessimistic views on the question of energy are groundless. The question arises from the fact that ever since mankind entered class society, exploitation and utilization of energy have been linked with the mode of production of a given society. An advanced social system promotes the development of the social forces of production while a decadent and declining social system obstructs the advance of the social forces of production. China, for example, is a big country which abounds in natural wealth, including sources of natural energy. But in semi-colonial and semi-feudal China, imperialism not only robbed her of her vast valuable energy resources but also labelled China “an oil-poor country.” The situation has been entirely different since liberation. “The socialist system has promoted the rapid development of the productive forces of our country.” More and more sources of natural energy have been discovered and developed. Guided by Chairman Mao’s revolutionary line, the Chinese people have carried out the principle of maintaining independence and keeping the initiative in their own hands and relying on their own efforts. In a very short space of time they have removed the “oil-poor country” label stuck an China. The days when she was completely dependent on imported oil are gone for ever. More than self-sufficient, China today also has oil for export. The Chinese people are now writing a new chapter on the exploitation and utilization of energy resources.

The “energy crisis” is a crisis of the capitalist system. There will never be any world “energy exhaustion,” but, as regards capitalism, this “counter-revolutionary system had now played itself out, had exhausted its social forces,” as Lenin said in Contemporary Russia and the Working-Class Movement. This is a clear indication of the further decline of imperialism. No matter what may happen to the capitalist world’s energy supply and demand, this general trend in the development of history is as inexorable as it is unchangeable.

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