If the Trump administration is serious about bringing jobs and pride back to rural America, they should take a lesson from cooperatives of the 1930s.
Not many people I’ve known who lived through the Great Depression recall it fondly. I suspect most of them would be perplexed to hear how Donald Trump’s chief strategist, Steve Bannon, described the new administration’s trillion-dollar infrastructure plan: “It will be as exciting as the 1930s.”
Exciting or not, it’s true that Americans have accomplished some remarkable things, and created some inventive new options, in times of widespread economic disaster. Social Security, the Empire State Building, and the gorgeous stretch of California’s Highway 1 through Big Sur all date to that period. But one less-celebrated accomplishment might be particularly instructive if the Trump administration is serious about bringing jobs and pride back to left-behind parts of the country.
I’m referring to the rise of rural electrification—how we got the lights on in communities off the beaten path, from the Rocky Mountains to the Florida Everglades. At the start of the Great Depression, much of the U.S. countryside had no electricity, even after most cities and towns had been electrified for decades. Power companies refused to make the investment, which would furnish lower profits than urban projects; some even claimed, astonishingly, that rural communities were better off in the dark. I don’t think that my grandfather, who grew up on northern Colorado beet farms without electricity, would have agreed.
Rural Americans took the matter into their own hands. Well before the Great Depression, they started forming electric cooperatives—utilities built, owned, and governed by customers themselves. These efforts added to a long legacy of rural cooperation as a means of economic inclusion, including 19th-century organizations like the Grange and the Farmers’ Alliance, whose purchasing and marketing cooperatives enabled farmers to compete in markets increasingly controlled by urban capital. Electric co-ops started taking advantage of hydroelectric dams built under President Franklin Roosevelt’s New Deal to distribute cheap, renewable power, and the federal government finally recognized their success enough to invest in it. In 1936, the Rural Electrification Act provided low-interest loans and technical support; by the end of World War II, around half of U.S. farms had electricity, up from around 10 percent a decade earlier. It turned out that, without investors clamoring for profits, powering the countryside was a perfectly sensible business proposition.
Today, nearly a thousand local cooperatives provide electricity to the inhabitants of around three-quarters of the landmass of the United States. They have formed larger co-ops in order to build and manage their own power plants. They’ve formed cooperative banks to finance new projects, lessening the need for public loans. Together with the rural phone co-ops that emerged in the same period, some electric co-ops are now bringing broadband internet service to underserved areas. Some have also become leaders in transitioning to renewable energy sources.
And all along, the basic model hasn’t changed: The co-ops are still owned and governed by the people they serve. Members typically get ballots for board members with their bills. It’s not a perfect system, and far too many co-ops have tolerated low election turnouts, entrenched board members, and bylaws designed to make change difficult. Still, co-ops have strong incentives to keep rates affordable, and any excess earnings get reinvested in the communities from which they came.
Electric cooperatives have also garnered remarkably bipartisan support over the years. Although spurred and nurtured early on by Democratic presidents, for decades now, these fixtures of the red state economy have had GOP lawmakers among their chief advocates, including former Indiana governor and vice president-elect Mike Pence. And it’s easy to see why: Co-ops are practical businesses that foster strong communities and local control. Because they’re regulated by their member-owners, in most cases they require significantly less oversight from government bureaucracies, if any.
Co-ops are practical businesses that foster strong communities and local control.
This kind of investment in infrastructure—a kind that empowers huge swaths of people—doesn’t appear to be what the Trump administration has in mind. The current proposal relies heavily on targeted tax credits for private developers and their investors, encouraging the kind of profiteering businesses that preferred not to bring power-lines to my grandfather’s farm. The developers’ projects will create new jobs, at least for a while. But when the construction is done, they can take the profits away to their preferred tax havens. They might also retain control over the projects for decades to come, continuing to reap profits from local populations to which they have little accountability. The Trumps of the world benefit long-term, while the rest of us see just a temporary respite from systemic decline.
Any new opportunity for public investment is an opportunity for building shared, sustainable, public wealth. Co-ops and other kinds of democratic ownership models can help make sure that this happens. Co-ops place the initiative and control with communities trying to meet their needs. Developers and lenders can then line up to serve those needs—rather than the other way around.
Community ownership can take a variety of forms. In Italy, a new model of “social cooperatives” is spreading rapidly as an affordable, humane way of delivering care to aging populations. Our crumbling water systems might be better served by something resembling the electric co-ops or by public-benefit companies like the one that saved the Welsh water infrastructure from an ill-fated period of privatization. Co-ops have proven effective in enabling communities to build solar and wind farms when investor-owned utilities have refused to do so. And, alongside locally owned broadband networks, we could invest in platform cooperatives—alternatives to Silicon Valley’s online utilities that increasingly shape how we find work and do business.
Cooperative models ensure that public investment goes to projects with enough public support that people are willing to become co-owners, responsible for setting their own priorities and keeping the business sound. They just require a willingness to trust—not in the largess of big investors, but in ourselves.
Reprinted with permission from TomDispatch.com
Know thyself. It was what came to mind in the wake of Donald Trump’s victory and my own puzzling reaction to it. And while that familiar phrase just popped into my head, I had no idea it was so ancient, or Greek, or for that matter a Delphic maxim inscribed in the forecourt of the Temple of Apollo according to the Greek writer Pausanias (whom I’d never heard of until I read his name in Wikipedia). Think of that as my own triple helix of ignorance extending back to… well, my birth in a very different America 72 years ago.
Anyway, the simple point is that I didn’t know myself half as well as I imagined. And I can thank Donald Trump for reminding me of that essential truth. Of course, we can never know what’s really going on inside the heads of all those other people out there on this curious planet of ours, but ourselves as strangers? I guess if I were inscribing something in the forecourt of my own Delphic temple right now, it might be: Who knows me? (Not me.)
Consider this my little introduction to a mystery I stumbled upon in the early morning hours of our recent election night that hasn’t left my mind since. I simply couldn’t accept that Donald Trump had won. Not him. Not in this country. Not possible. Not in a million years.
Mind you, during the campaign I had written about Trump repeatedly, always leaving open the possibility that, in the disturbed (and disturbing) America of 2016, he could indeed beat Hillary Clinton. That was a conclusion I lost when, in the final few weeks of the campaign, like so many others, I got hooked on the polls and the pundits who went with them. (Doh!)
In the wake of the election, however, it wasn’t shock based on pollsters’ errors that got to me. It was something else that only slowly dawned on me. Somewhere deep inside, I simply didn’t believe that, of all countries on this planet, the United States could elect a narcissistic, celeb billionaire who was also, in the style of Italy’s Silvio Berlusconi, a right-wing “populist” and incipient autocrat.
Plenty of irony lurked in that conviction, which outlasted the election and so reality itself. In these years, I’ve written critically of the way just about every American politician but Donald Trump has felt obligated to insist that this is an “exceptional” or “indispensable” nation, “the greatest country” on the planet, not to speak of in history. (And throw in as well the claim of recent presidents and so many others that the U.S. military represents the “greatest fighting force” in that history.) President Obama, Marco Rubio, Jeb Bush, John McCain — it didn’t matter. Every one of them was a dutiful or enthusiastic American exceptionalist. As for Trump’s opponent, Hillary Clinton, she hit the trifecta plus one in a speech she gave to the American Legion’s national convention during the campaign. In it, she referred to the United States as “the greatest country on Earth,” “an exceptional nation,” and “the indispensable nation” that, of course, possessed “the greatest military” ever. (“My friends, we are so lucky to be Americans. It is an extraordinary blessing.”) Only Trump, with his “make America great again,” slogan seemed to admit to something else, something like American decline.
Post-election, here was the shock for me: it turned out that I, too, was an American exceptionalist. I deeply believed that our country was simply too special for The Donald, and so his victory sent me on an unexpected journey back into the world of my childhood and youth, back into the 1950s and early 1960s when (despite the Soviet Union) the U.S. really did stand alone on the planet in so many ways. Of course, in those years, no one had to say such things. All those greatests, exceptionals, and indispensables were then dispensable and the recent political tic of insisting on them so publicly undoubtedly reflects a defensiveness that’s a sign of something slipping.
Obviously, in those bedrock years of American power and strength and wealth and drive and dynamism (and McCarthyism, and segregation, and racism, and smog, and…), the very years that Donald Trump now yearns to bring back, I took in that feeling of American specialness in ways too deep to grasp. Which was why, decades later, when I least expected it, I couldn’t shake the feeling that it couldn’t happen here. In actuality, the rise to power of Trumpian figures — Rodrigo Duterte in the Philippines, Viktor Orban in Hungary, Recep Tayyip Erdogan in Turkey, Vladimir Putin in Russia — has been a dime-a-dozen event elsewhere and now looks to be a global trend. It’s just that I associated such rises with unexceptional, largely tinpot countries or ones truly down on their luck.
So it’s taken me a few hard weeks to come to grips with my own exceptionalist soul and face just how Donald Trump could — indeed did — happen here.
It Can Happen Here
So how did it happen here?
Let’s face it: Donald Trump was no freak of nature. He only arrived on the scene and took the Electoral College (if not the popular vote) because our American world had been prepared for him in so many ways. As I see it, at least five major shifts in American life and politics helped lay the groundwork for the rise of Trumpism:
* The Coming of a 1% Economy and the 1% Politics That Goes With It: A singular reality of this century has been the way inequality became embedded in American life, and how so much money was swept ever upwards into the coffers of 1% profiteers. Meanwhile, a yawning gap grew between the basic salaries of CEOs and those of ordinary workers. In these years, as I’m hardly the first to point out, the country entered a new gilded age. In other words, it was already a Mar-a-Lago moment before The Donald threw his hair into the ring.
Without the arrival of casino capitalism on a massive scale (at which The Donald himself proved something of a bust), Trumpism would have been inconceivable. And if, in its Citizens United decision of 2010, the Supreme Court hadn’t thrown open the political doors quite so welcomingly to that 1% crew, how likely was it that a billionaire celebrity would have run for president or become a favorite among the white working class?
Looked at a certain way, Donald Trump deserves credit for stamping the true face of twenty-first-century American plutocracy on Washington by selecting mainly billionaires and multimillionaires to head the various departments and agencies of his future government. After all, doesn’t it seem reasonable that a 1% economy, a 1% society, and a 1% politics should produce a 1% government? Think of what Trump has so visibly done as American democracy’s version of truth in advertising. And of course, if billionaires hadn’t multiplied like rabbits in this era, he wouldn’t have had the necessary pool of plutocrats to choose from.
Something similar might be said of his choice of so many retired generals and other figures with significant military backgrounds (ranging from West Point graduates to a former Navy SEAL) for key “civilian” positions in his government. Think of that, too, as a truth-in-advertising moment leading directly to the second shift in American society.
* The Coming of Permanent War and an Ever More Militarized State and Society: Can there be any question that, in the 15-plus years since 9/11, what was originally called the “Global War on Terror” has become a permanent war across the Greater Middle East and Africa (with collateral damage from Europe to the Philippines)? In those years, staggering sums of money — beyond what any other country or even collection of countries could imagine spending — has poured into the U.S. military and the arms industry that undergirds it and monopolizes the global trade in weaponry. In the process, Washington became a war capital and the president, as Michelle Obama indicated recently when talking about Trump’s victory with Oprah Winfrey, became, above all, the commander in chief. (“It is important for the health of this nation,” she told Winfrey, “that we support the commander in chief.”) The president’s role in wartime had, of course, always been as commander in chief, but now that’s the position many of us vote for (and even newspapers endorse), and since war is so permanently embedded in the American way of life, Donald Trump is guaranteed to remain that for his full term.
And the role has expanded strikingly in these years, as the White House gained the power to make war in just about any fashion it chose without significant reference to Congress. The president now has his own air force of drone assassins to dispatch more or less anywhere on the planet to take out more or less anyone. At the same time, cocooned inside the U.S. military, an elite, secretive second military, the Special Operations forces, has been expanding its personnel, budget, and operations endlessly and its most secretive element, the Joint Special Operations Command, might even be thought of as the president’s private army.
Meanwhile, the weaponry and advanced technology with which this country has been fighting its never-ending (and remarkably unsuccessful) conflicts abroad — from Predator drones to the Stingray that mimics a cell phone tower and so gets nearby phones to connect to it — began migrating home, as America’s borders and police forces were militarized. The police have been supplied with weaponry and other equipment directly off the battlefields of Iraq and Afghanistan, while veterans from those wars have joined the growing set of SWAT teams, the domestic version of special-ops teams, that are now a must-have for police departments nationwide.
It’s no coincidence that Trump and his generals are eager to pump up a supposedly “depleted” U.S. military with yet more funds or, given the history of these years, that he appointed so many retired generals from our losing wars to key “civilian” positions atop that military and the national security state. As with his billionaires, in a decisive fashion, Trump is stamping the real face of twenty-first-century America on Washington.
* The Rise of the National Security State: In these years, a similar process has been underway in relation to the national security state. Vast sums of money have flowed into the country’s 17 intelligence outfits (and their secret black budgets), into the Department of Homeland Security, and the like. (Before 9/11, Americans might have associated that word “homeland” with Nazi Germany or the Soviet Union, but never with this country.) In these years, new agencies were launched and elaborate headquarters and other complexes built for parts of that state within a state to the tune of billions of dollars. At the same time, it was “privatized,” its doors thrown open to the contract employees of a parade of warrior corporations. And, of course, the National Security Agency created a global surveillance apparatus so all-encompassing that it left the fantasies of the totalitarian regimes of the twentieth century in the dust.
As the national security state rose in Washington amid an enveloping shroud of secrecy (and the fierce hounding or prosecution of any whistleblower), it became the de facto fourth branch of government. Under the circumstances, don’t think of it as a happenstance that the 2016 election might have been settled 11 days early thanks to FBI Director James Comey’s intervention in the race, which represented a historical first for the national security state. Argue as you will over how crucial Comey’s interference was to the final vote tallies, it certainly caught the mood of the new era that had been birthed in Washington long before Donald Trump’s victory. Nor should you consider it a happenstance that possibly the closest military figure to the new commander in chief is his national security adviser, retired Lieutenant General Michael Flynn, who ran the Defense Intelligence Agency until forced out by the Obama administration. No matter the arguments Trump may have with the CIA or other agencies, they will be crucial to his rule (once brought to heel by his appointees).
Those billionaires, generals, and national security chieftains had already been deeply embedded in our American world before Trump made his run. They will now be part and parcel of his world going forward. The fourth shift in the landscape is ongoing, not yet fully institutionalized, and harder to pin down.
* The Coming of the One-Party State: Thanks to the political developments of these years, and a man with obvious autocratic tendencies entering the Oval Office, it’s possible to begin to imagine an American version of a one-party state emerging from the shell of our former democratic system. After all, the Republicans already control the House of Representatives (in more or less perpetuity, thanks to gerrymandering), the Senate, the White House, and assumedly in the years to come the Supreme Court. They also control a record 33 out of 50 governorships, have tied a record by taking 68 out of the 98 state legislative chambers, and have broken another by gaining control of 33 out of 50 full legislatures. In addition, as the North Carolina legislature has recently shown, the urge among state Republicans to give themselves new, extra-democratic, extra-legal powers (as well as a longer term Republican drive to restrict the ballot in various ways, claiming nonexistent voter fraud) should be considered a sign of the direction in which we could be headed in a future embattled Trumpist country.
In addition, for years the Democratic Party saw its various traditional bases of support weaken, wither, or in the recent election simply opt for a candidate competing for the party’s nomination who wasn’t even a Democrat. Until the recent election loss, however, it was at least a large, functioning political bureaucracy. Today, no one knows quite what it is. It’s clear, however, that one of America’s two dominant political parties is in a state of disarray and remarkable weakness. Meanwhile, the other, the Republican Party, assumedly the future base for that Trumpian one-party state, is in its own disheveled condition, a party of apparatchiks and ideologues in Washington and embattled factions in the provinces.
In many ways, the incipient collapse of the two-party system in a flood of 1% money cleared the path for Trump’s victory. Unlike the previous three shifts in American life, however, this one is hardly in place yet. Instead, the sense of party chaos and weakness so crucial to the rise of Donald Trump still holds, and the same sense of chaos might be said to apply to the fifth shift I want to mention.
* The Coming of the New Media Moment: Among the things that prepared the way for Trump, who could leave out the crumbling of the classic newspaper/TV world of news? In these years, it lost much of its traditional advertising base, was bypassed by social media, and the TV part of it found itself in an endless hunt for eyeballs to glue, normally via 24/7 “news” events, eternally blown out of proportion but easy to cover in a nonstop way by shrinking news staffs. As an alternative, there was the search for anything or anyone (preferably of the celebrity variety) that the public couldn’t help staring at, including a celebrity-turned-politician-turned-provocateur with the world’s canniest sense of what the media so desperately needed: him. It may have seemed that Trump inaugurated our new media moment by becoming the first meister-elect of tweet and the shout-out master of that universe, but in reality he merely grasped the nature of our new, chaotic media moment and ran with it.
Unexceptional Billionaires and Dispensable Generals
Let’s add a final point to the other five: Donald Trump will inherit a country that has been hollowed out by the new realities that made him a success and allowed him to sweep to what, to many experts, looked like an improbable victory. He will inherit a country that is ever less special, a nation that, as Trump himself has pointed out, has an increasingly third-worldish transportation system (not a single mile of high-speed rail and airports that have seen better days), an infrastructure that has been drastically debased, and an everyday economy that offers lesser jobs to ever more of his countrymen. It will be an America whose destructive power only grows but whose ability to translate that into anything approaching victory eternally recedes.
With its unexceptional billionaires, its dispensable generals, its less than great national security officials, its dreary politicians, and its media moguls in search of the passing buck, it’s likely to be a combustible country in ways that will seem increasingly familiar to so many elsewhere on this planet, and increasingly strange to the young Tom Engelhardt who still lives inside me.
It’s this America that will tumble into the debatably small but none-too-gentle hands of Donald Trump on January 20th.
Tom Engelhardt is a co-founder of the American Empire Project and the author of The United States of Fear as well as a history of the Cold War, The End of Victory Culture. He is a fellow of the Nation Institute and runs TomDispatch.com. His latest book is Shadow Government: Surveillance, Secret Wars, and a Global Security State in a Single-Superpower World.
Follow TomDispatch on Twitter and join us on Facebook. Check out the newest Dispatch Book, John Feffer’s dystopian novel Splinterlands, as well as Nick Turse’s Next Time They’ll Come to Count the Dead, and Tom Engelhardt’s latest book, Shadow Government: Surveillance, Secret Wars, and a Global Security State in a Single-Superpower World.
Copyright 2017 Tom Engelhardt
‘We need to send a very loud and very clear message to corporate America: the era of outsourcing is over’
In a statement issued Saturday, the former Democratic presidential candidate took a stand against the air conditioner manufacturer United Technologies (UTX), which is planning to move 2,100 jobs to Mexico to maximize profits, as he announced legislation to prevent the outsourcing of U.S. factory jobs—and demanded that Trump follow through on his own vows to keep the company from going overseas.
“I call on Mr. Trump to make it clear to the CEO of United Technologies that if his firm wants to receive another defense contract from the taxpayers of this country, it must not move these plants to Mexico,” Sanders said. “We need to send a very loud and very clear message to corporate America: the era of outsourcing is over. Instead of offshoring jobs, the time has come for you to start bringing good-paying jobs back to the United States of America.”
Sanders’ legislation, the Outsourcing Prevention Act, would prevent companies sending jobs overseas from receiving federal contracts, tax breaks, or other financial assistance; claw back federal subsidies that outsourcing companies received over the past decade; impose a tax of either 35 percent of the company’s profits or an amount that equals the money saved by moving jobs overseas, whichever is higher; and imposing stiff tariffs on executive bonuses like golden parachutes, stock options, and other gratuities.
UTX, which makes the air conditioner Carrier, told its unionized workers in February that it would be shipping operations from Huntington and Indianapolis, Indiana to Monterrey, Mexico. Video footage of the layoff announcement, and the workers’ angry response, went viral (see video below); throughout his campaign, Trump vowed that if elected, he would convince UTX executives to stay in the U.S. or face a 35 percent tax.
“All of us need to hold Mr. Trump accountable to make sure that he keeps this promise,” Sanders said Saturday. “Let’s be clear: it is not good enough to save some of these jobs. We cannot rest until United Technologies signs a firm contract to keep all of these good-paying jobs in Indiana without slashing the salaries or benefits workers have earned.”
The New York Times reported last week that Carrier’s employees in Indiana earn between $15 and $26 per hour; the workers in Monterrey stand to make that much in a single day.
Trump tweeted on Thursday that he had been “making progress” on getting Carrier to stay in the U.S. The company confirmed it had “discussions” with the incoming administration, but had “nothing to announce at this time.”
By Abrahm Lustgarten (Reprinted with permission from ProPublica)
ProPublica’s reporting on the water crisis in the American West has highlighted any number of confounding contradictions worsening the problem: Farmers are encouraged to waste water so as to protect their legal rights to its dwindling supply in the years ahead; Las Vegas sought to impose restrictions on water use while placing no checks on its explosive population growth; the federal government has encouraged farmers to improve efficiency in watering crops, but continues to subsidize the growing of thirsty crops such as cotton in desert states like Arizona.
Today, we offer another installment in the contradictions amid a crisis.
In parts of the western U.S., wracked by historic drought, you can get a tax break for using an abundance of water.
That’s a typo, right? A joke?
Ah, no. But we understand your bafflement. The Colorado River has been trickling, its largest reservoirs less than half full. As recently as 2014 parts of Texas literally almost dried up. The National Academy of Sciences predicts the Southwest may be on the cusp of its worst dry spell in 1,000 years. Scientists are warning that the backup plan — groundwater aquifers from California to Nebraska — are all being sucked dry.
But, yes, the tax break exists — in parts of eight High Plains states.
Here’s how it works: Farmers — or anyone who uses water in a business — can ask the Internal Revenue Service for a tax write-off for what’s called a “depleted asset.” In certain places, water counts as an asset, just like oil, or minerals like copper. The more water gets used, the more cash credit farmers can claim against their income tax. And that’s just what almost 3,000 Texas landowners in just one water district appear to have done last year — a year in which nearly half of Texas was in a state of “severe” or “extreme” drought.”
Yikes. How much can they write off?
A bunch it seems, especially if you’re a big farm and own a lot of land. We talked to an accountant in Levelland, Texas. He had a client who wrote off $10,000. “Whenever you buy land, you’re getting the dirt … and of course you are getting the water,” said Sham Myatt, the accountant. And the idea is that that water is part of what you paid for in the land deal. If the aquifer was 50 feet deep at the time of the land sale, and it drops 10 feet in a dry year, then the farmer can deduct one-fifth of the value, and so on, until all the water is gone.
That’s not going to do much to conserve water, is it?
No. It’s not. In fact it’s an incentive to do the exact opposite. A farmer who tries to use less water because of the drought, say, by switching to really efficient irrigation techniques, could actually make less money. His water might last longer, but producing his crop would get a lot more expensive.
We called Nicholas Brozovic, an associate professor of agricultural economics and director of policy at the University of Nebraska’s Robert B. Daugherty Water for Food Institute. He’d actually never heard of the water deduction; it’s that obscure. But he laid out some textbook economics: If you’re overusing your water, then you are depreciating it, he said. And if the government pays for that, they are subsidizing that depreciation. “The more you deplete your groundwater, the higher your tax exemption and that must create an incentive not to conserve,” he said.
Hasn’t the federal government spent billions subsidizing conservation and the protection of the West’s groundwater, in part by building dams and encouraging people to use the water in rivers instead? Why would they forfeit federal tax dollars to do the opposite?
We called the IRS, and they initially shared our doubts. Not because they cared much about groundwater (it’s a tax agency!) but because they said they were pretty sure no such deduction was legal. They pointed us to section 613 of the tax code, and it couldn’t be more explicit: For the purposes of deducting the depreciating value of minerals, the definition “does not include soil, sod, dirt, turf, water, or mosses.” Ok, who would ever have thought of deducting mosses or sod? But anyway. That left us really confused.
Right, there were, after all, those farmers in Texas who seemed to have benefited from what the IRS said was not possible.
We encouraged the IRS to check again. They did. And then they found the provision they thought didn’t exist — right there in the text for Revenue Rule 65–296. An IRS spokesperson laid out for us the specifics: “Taxpayers are entitled to a cost depletion deduction for the exhaustion of their capital investment in the ground water extracted and disposed of by them in their business of irrigation farming specifically from the Ogallala Formation.”
Seems like some follow-up questions were in order.
For sure. We asked for clarification. The IRS said it would try to explain. Most importantly, they wanted to say it wasn’t quite as crazy as it sounded. The deduction is only available for one small part of the country — an area that includes parts of Texas, New Mexico, Oklahoma, Nebraska, Kansas, South Dakota, Wyoming and Colorado. And it should only apply if people are using water from a source that is running dry anyway.
But wait, what? You get a break when you use resources that are already in danger of vanishing?
Yes, that’s why it is what’s called a depleted asset. It’s of less and less value with every day. Your car is worth less the moment you drive it off the lot. Or, more similarly, oil companies track the falling value of their reserves the more they pump out from underground. In fact, energy companies have been taking oil depletion breaks for decades. Texas landowners would say their property is getting less valuable the less water there is to use on it.
Okay, okay, but water isn’t oil. It’s not a commodity. Access to it is a basic right. Yes? Please say that’s right.
Wrong. Ouch. I know, it hurts. But ProPublica last year wrote about all the ways water is coveted and controlled — and then often wasted — by just a few powerful groups. In most of the West, only some people and businesses have rights to it, depending on who showed up to claim it first. One big trend is that water is increasingly being bought and sold — including by hedge funds and big Wall Street investors, and the less water there is, the more the price is going up.
That’s a little scary. Let’s get back to depleted assets. So when did this tax break start?
About 50 years ago. A farmer in the Texas panhandle — along with his local water district — successfully sued the IRS, arguing that the roughly 200 million gallons he drew from his groundwater each year was no different than the depletion of the state’s other great natural resource, oil. He won, and the IRS was obliged to create rule 65–296 — the special allowance for tax credits that the IRS almost forgot about.
Again, it was supposed to be limited — just to a slice of Texas and eastern New Mexico. The court even went so far as to warn that the case shouldn’t become a precedent for groundwater tax claims elsewhere, saying the conditions in that area of the country were unique. But it didn’t take long for the rule to be expanded, albeit just a little bit. By the mid 1980’s any landowner overlying the sprawling Ogallala aquifer — a giant underground vault of precious but dwindling water — was eligible to file for the deductions, not just in North Texas and New Mexico.
That still doesn’t sound like much of a big deal … why does it matter?
Well, the Ogallala, which spans from central Texas north to Nebraska and South Dakota is the nation’s largest groundwater reserve and is one of the most important, and (famously) threatened water supplies in the country. Its heavy overuse and plummeting water levels rang alarms among policymakers more than half a century ago. So this is no insignificant place to be even indirectly encouraging overuse. Texas’ High Plains are one of the most intensely irrigated and productive farming regions in the country. Hundreds of thousands of acres of cotton and corn, among other staple commodities, are grown there using this Ogallala water.
So, do we know what’s happening to the Ogallala where all this farming is taking place?
We looked at recent water level changes in just one district — the one with thousands of tax credit claims — and found a disturbing trend. Underground water levels in the 16 counties of the High Plains Underground Water Conservation District have dropped nearly 10 feet over the last 10 years. Some parts of Castro County saw water levels drop more than five feet over the course of 2015 alone. The federal government estimates nearly 100 cubic miles of water have been withdrawn from the Ogallala in that part of Texas. That doesn’t automatically mean the tax credits are responsible — water levels are dropping in most places thanks to overuse and it would take a lot more research to link up the cause and effect. But it certainly isn’t a portrait of sustainability.
Aquifers are at risk across Arizona, California and other states as well, right? At least people can’t claim tax breaks there?
Not yet. But that could change, as water supplies worsen and word of the tax break circulates more widely. Almost no one we spoke with had heard of it — not water lawyers in Arizona or groundwater conservation scientists in California. Armed with the knowledge, there’s a pretty good chance farmers and businesses across the West could seek tax relief.
Because there is precedent?
What does the IRS say to that?
They say it’s very unlikely, mostly because they think the conditions in the Ogallala are rare, and that the agency’s policy is to reject water allowance claims anywhere outside of the places covered in the original lawsuit. But if more landowners, in more places, were to file suits challenging the IRS to allow them to deduct for their water, or if they were to petition the IRS directly, the agency says it would undertake a review to consider it on a case by case basis. Landowners would have to present extensive scientific evidence that showed their situation was more or less the same as in North Texas.
Is the IRS equipped to make such judgments?
Fair question. John Leshy, professor emeritus at the University of California Hastings College of the Law, and a former solicitor for the U.S. Department of Interior, isn’t persuaded. “The IRS has really created a can of worms for itself,” he said. “It doesn’t have any hydrological expertise.”
Hmmm. Not ideal. But what’s the bottom line? Are these tax breaks going to make any real difference in how quickly we use up the water supply?
It’s hard to tell, partly because no one appears to have examined that question. We asked the IRS for data on the number of claims and it hasn’t responded. Folks in Texas dismiss the suggestion that the tax benefits are incentivizing water use as ludicrous. Myatt, the accountant, points out that only about one-third of the deducted value translates to cash in hand, and says for many smaller farmers that amounts to just a few hundred dollars. Jason Coleman, manager of the High Plains Underground Water Conservation District, says his members are as concerned about conserving their water for the future as anyone. “Its already a declining resource,” he said. “I just can’t imagine someone saying I’m going to depreciate our resource any more because of a tax claim.”
But the academic consensus is that incentives encourage use, even overuse. And if the effect of depletion allowances on oil production are any guide — Leshy says they have spurred overproduction and led to artificially cheap, subsidized fuel prices — any significant expansion of the groundwater tax credit to other states could have lasting impacts on the way groundwater is used across the country.
So is anyone trying to do anything about this?
Not really, which is why people like Brent Blackwelder, president emeritus of the environmental group Friends of the Earth, which has long been involved in rooting out tax policy disincentives to conservation, are fuming. “It’s a pretty major outrage that we would so stupidly reward the over extraction and non-sustainable use of groundwater,” he told me. Blackwelder helped push to purge the tax code of perverse anti-conservation incentives like this one way back in the Reagan administration, with the 1986 Tax Reform Act. They were largely successful, weeding out several other odd loopholes. But the groundwater depletion allowance persisted. And since then, apparently, it’s been forgotten about by all but the farmers who rely on it.
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By Michael Klare
Reprinted with permission from TomDispatch.com
Here’s the good news: wind power, solar power, and other renewable forms of energy are expanding far more quickly than anyone expected, ensuring that these systems will provide an ever-increasing share of our future energy supply. According to the most recent projections from the Energy Information Administration (EIA) of the U.S. Department of Energy, global consumption of wind, solar, hydropower, and other renewables will double between now and 2040, jumping from 64 to 131 quadrillion British thermal units (BTUs).
And here’s the bad news: the consumption of oil, coal, and natural gas is also growing, making it likely that, whatever the advances of renewable energy, fossil fuels will continue to dominate the global landscape for decades to come, accelerating the pace of global warming and ensuring the intensification of climate-change catastrophes.
The rapid growth of renewable energy has given us much to cheer about. Not so long ago, energy analysts were reporting that wind and solar systems were too costly to compete with oil, coal, and natural gas in the global marketplace. Renewables would, it was then assumed, require pricey subsidies that might not always be available. That was then and this is now. Today, remarkably enough, wind and solar are already competitive with fossil fuels for many uses and in many markets.
If that wasn’t predicted, however, neither was this: despite such advances, the allure of fossil fuels hasn’t dissipated. Individuals, governments, whole societies continue to opt for such fuels even when they gain no significant economic advantage from that choice and risk causing severe planetary harm. Clearly, something irrational is at play. Think of it as the fossil-fuel equivalent of an addictive inclination writ large.
The contradictory and troubling nature of the energy landscape is on clear display in the 2016 edition of the International Energy Outlook, the annual assessment of global trends released by the EIA this May. The good news about renewables gets prominent attention in the report, which includes projections of global energy use through 2040. “Renewables are the world’s fastest-growing energy source over the projection period,” it concludes. Wind and solar are expected to demonstrate particular vigor in the years to come, their growth outpacing every other form of energy. But because renewables start from such a small base — representing just 12% of all energy used in 2012 — they will continue to be overshadowed in the decades ahead, explosive growth or not. In 2040, according to the report’s projections, fossil fuels will still have a grip on a staggering 78% of the world energy market, and — if you don’t mind getting thoroughly depressed — oil, coal, and natural gas will each still command larger shares of the market than all renewables combined.
Keep in mind that total energy consumption is expected to be much greater in 2040 than at present. At that time, humanity will be using an estimated 815 quadrillion BTUs (compared to approximately 600 quadrillion today). In other words, though fossil fuels will lose some of their market share to renewables, they will still experience striking growth in absolute terms. Oil consumption, for example, is expected to increase by 34% from 90 million to 121 million barrels per day by 2040. Despite all the negative publicity it’s been getting lately, coal, too, should experience substantial growth, rising from 153 to 180 quadrillion BTUs in “delivered energy” over this period. And natural gas will be the fossil-fuel champ, with global demand for it jumping by 70%. Put it all together and the consumption of fossil fuels is projected to increase by 177 quadrillion BTUs, or 38%, over the period the report surveys.
Anyone with even the most rudimentary knowledge of climate science has to shudder at such projections. After all, emissions from the combustion of fossil fuels account for approximately three-quarters of the greenhouse gases humans are putting into the atmosphere. An increase in their consumption of such magnitude will have a corresponding impact on the greenhouse effect that is accelerating the rise in global temperatures.
At the United Nations Climate Summit in Paris last December, delegates from more than 190 countries adopted a plan aimed at preventing global warming from exceeding 2 degrees Celsius (about 3.6 degrees Fahrenheit) above the pre-industrial level. This target was chosen because most scientists believe that any warming beyond that will result in catastrophic and irreversible climate effects, including the melting of the Greenland and Antarctic ice caps (and a resulting sea-level rise of 10-20 feet). Under the Paris Agreement, the participating nations signed onto a plan to take immediate steps to halt the growth of greenhouse gas emissions and then move to actual reductions. Although the agreement doesn’t specify what measures should be taken to satisfy this requirement — each country is obliged to devise its own “intended nationally determined contributions” to the overall goal — the only practical approach for most countries would be to reduce fossil fuel consumption.
As the 2016 EIA report makes eye-poppingly clear, however, the endorsers of the Paris Agreement aren’t on track to reduce their consumption of oil, coal, and natural gas. In fact, greenhouse gas emissions are expected to rise by an estimated 34% between 2012 and 2040 (from 32.3 billion to 43.2 billion metric tons). That net increase of 10.9 billion metric tons is equal to the total carbon emissions of the United States, Canada, and Europe in 2012. If such projections prove accurate, global temperatures will rise, possibly significantly above that 2 degree mark, with the destructive effects of climate change we are already witnessing today — the fires, heat waves, floods, droughts, storms, and sea level rise — only intensifying.
Exploring the Roots of Addiction
How to explain the world’s tenacious reliance on fossil fuels, despite all that we know about their role in global warming and those lofty promises made in Paris?
To some degree, it is undoubtedly the product of built-in momentum: our existing urban, industrial, and transportation infrastructure was largely constructed around fossil fuel-powered energy systems, and it will take a long time to replace or reconfigure them for a post-carbon future. Most of our electricity, for example, is provided by coal- and gas-fired power plants that will continue to operate for years to come. Even with the rapid growth of renewables, coal and natural gas are projected to supply 56% of the fuel for the world’s electrical power generation in 2040 (a drop of only 5% from today). Likewise, the overwhelming majority of cars and trucks on the road are now fueled by gasoline and diesel. Even if the number of new ones running on electricity were to spike, it would still be many years before oil-powered vehicles lost their commanding position. As history tells us, transitions from one form of energy to another take time.
Then there’s the problem — and what a problem it is! — of vested interests. Energy is the largest and most lucrative business in the world, and the giant fossil fuel companies have long enjoyed a privileged and highly profitable status. Oil corporations like Chevron and ExxonMobil, along with their state-owned counterparts like Gazprom of Russia and Saudi Aramco, are consistently ranked among the world’s most valuable enterprises. These companies — and the governments they’re associated with — are not inclined to surrender the massive profits they generate year after year for the future wellbeing of the planet.
As a result, it’s a guarantee that they will employ any means at their disposal (including well-established, well-funded ties to friendly politicians and political parties) to slow the transition to renewables. In the United States, for example, the politicians of coal-producing states are now at work on plans to block the Obama administration’s “clean power” drive, which might indeed lead to a sharp reduction in coal consumption. Similarly, Exxon has recruited friendly Republican officials to impede the efforts of some state attorney generals to investigate that company’s past suppression of information on the links between fossil fuel use and climate change. And that’s just to scratch the surface of corporate efforts to mislead the public that have included the funding of the Heartland Institute and other climate-change-denying think tanks.
Of course, nowhere is the determination to sustain fossil fuels fiercer than in the “petro-states” that rely on their production for government revenues, provide energy subsidies to their citizens, and sometimes sell their products at below-market rates to encourage their use. According to the International Energy Agency (IEA), in 2014 fossil fuel subsidies of various sorts added up to a staggering $493 billion worldwide — far more than those for the development of renewable forms of energy. The G-20 group of leading industrial powers agreed in 2009 to phase out such subsidies, but a meeting of G-20 energy ministers in Beijing in June failed to adopt a timeline to complete the phase-out process, suggesting that little progress will be made when the heads of state of those countries meet in Hangzhou, China, this September.
None of this should surprise anyone, given the global economy’s institutionalized dependence on fossil fuels and the amounts of money at stake. What it doesn’t explain, however, is the projected growth in global fossil fuel consumption. A gradual decline, accelerating over time, would be consistent with a broad-scale but slow transition from carbon-based fuels to renewables. That the opposite seems to be happening, that their use is actually expanding in most parts of the world, suggests that another factor is in play: addiction.
We all know that smoking tobacco, snorting cocaine, or consuming too much alcohol is bad for us, but many of us persist in doing so anyway, finding the resulting thrill, the relief, or the dulling of the pain of everyday life simply too great to resist. In the same way, much of the world now seems to find it easier to fill up the car with the usual tankful of gasoline or flip the switch and receive electricity from coal or natural gas than to begin to shake our addiction to fossil fuels. As in everyday life, so at a global level, the power of addiction seems regularly to trump the obvious desirability of embarking on another, far healthier path.
On a Fossil Fuel Bridge to Nowhere
Without acknowledging any of this, the 2016 EIA report indicates just how widespread and prevalent our fossil-fuel addiction remains. In explaining the rising demand for oil, for example, it notes that “in the transportation sector, liquid fuels [predominantly petroleum] continue to provide most of the energy consumed.” Even though “advances in nonliquids-based [electrical] transportation technologies are anticipated,” they will not prove sufficient “to offset the rising demand for transportation services worldwide,” and so the demand for gasoline and diesel will continue to grow.
Most of the increase in demand for petroleum-based fuels is expected tooccur in the developing world, where hundreds of millions of people are entering the middle class, buying their first gas-powered cars, and about to be hooked on an energy way of life that should be, but isn’t, dying. Oil use is expected to grow in China by 57% between 2012 and 2040, and at a faster rate (131%!) in India. Even in the United States, however, a growing preference for sport utility vehicles and pickup trucks continues to mean higher petroleum use. In 2016, according to Edmunds.com, a car shopping and research site, nearly 75% of the people who traded in a hybrid or electric car to a dealer replaced it with an all-gas car, typically a larger vehicle like an SUV or a pickup.
The rising demand for coal follows a depressingly similar pattern. Although it remains a major source of the greenhouse gases responsible for climate change, many developing nations, especially in Asia, continue to favor it when adding electricity capacity because of its low cost and familiar technology. Although the demand for coal in China — long the leading consumer of that fuel — is slowing, that country is still expected to increase its usage by 12% by 2035. The big story here, however, is India: according to the EIA, its coal consumption will grow by 62% in the years surveyed, eventually making it, not the United States, the world’s second largest consumer. Most of that extra coal will go for electricity generation, once again to satisfy an “expanding middle class using more electricity-consuming appliances.”
And then there’s the mammoth expected increase in the demand for natural gas. According to the latest EIA projections, its consumption will rise faster than any fuel except renewables. Given the small base from which renewables start, however, gas will experience the biggest absolute increase of any fuel, 87 quadrillion BTUs between 2012 and 2040. (In contrast, renewables are expected to grow by 68 quadrillion and oil by 62 quadrillion BTUs during this period.)
At present, natural gas appears to enjoy an enormous advantage in the global energy marketplace. “In the power sector, natural gas is an attractive choice for new generating plants given its moderate capital cost and attractive pricing in many regions as well as the relatively high fuel efficiency and moderate capital cost of gas-fired plants,” the EIA notes. It is also said to benefit from its “clean” reputation (compared to coal) in generating electricity. “As more governments begin implementing national or regional plans to reduce carbon dioxide emissions, natural gas may displace consumption of the more carbon-intensive coal and liquid fuels.”
Unfortunately, despite that reputation, natural gas remains a carbon-based fossil fuel, and its expanded consumption will result in a significant increase in global greenhouse gas emissions. In fact, the EIA claims that it will generate a larger increase in such emissions over the next quarter-century than either coal or oil — a disturbing note for those who contend that natural gas provides a “bridge” to a green energy future.
If you were to read through the EIA’s latest report as I did, you, too, might end up depressed by humanity’s addictive need for its daily fossil fuel hit. While the EIA’s analysts add the usual caveats, including the possibility that a more sweeping than expected follow-up climate agreement or strict enforcement of the one adopted last December could alter their projections, they detect no signs of the beginning of a determined move away from the reliance on fossil fuels.
If, indeed, addiction is a big part of the problem, any strategies undertaken to address climate change must incorporate a treatment component. Simply saying that global warming is bad for the planet, and that prudence and morality oblige us to prevent the worst climate-related disasters, will no more suffice than would telling addicts that tobacco and hard drugs are bad for them. Success in any global drive to avert climate catastrophe will involve tackling addictive behavior at its roots and promoting lasting changes in lifestyle. To do that, it will be necessary to learn from the anti-drug and anti-tobacco communities about best practices, and apply them to fossil fuels.
Consider, for example, the case of anti-smoking efforts. It was the medical community that first took up the struggle against tobacco and began by banning smoking in hospitals and other medical facilities. This effort was later extended to public facilities — schools, government buildings, airports, and so on — until vast areas of the public sphere became smoke-free. Anti-smoking activists also campaigned to have warning labels displayed in tobacco advertising and cigarette packaging.
Such approaches helped reduce tobacco consumption around the world and can be adapted to the anti-carbon struggle. College campuses and town centers could, for instance, be declared car-free — a strategy already embraced by London’s newly elected mayor, Sadiq Khan. Express lanes on major streets and highways can be reserved for hybrids, electric cars, and other alternative vehicles. Gas station pumps and oil advertising can be made to incorporate warning signs saying something like, “Notice: consumption of this product increases your exposure to asthma, heat waves, sea level rise, and other threats to public health.” Once such an approach began to be seriously considered, there would undoubtedly be a host of other ideas for how to begin to put limits on our fossil fuel addiction.
Such measures would have to be complemented by major moves to combat the excessive influence of the fossil fuel companies and energy states when it comes to setting both local and global policy. In the U.S., for instance, severely restricting the scope of private donations in campaign financing, as Senator Bernie Sanders advocated in his presidential campaign, would be a way to start down this path. Another would step up legal efforts to hold giant energy companies like ExxonMobil accountable for malfeasance in suppressing information about the links between fossil fuel combustion and global warming, just as, decades ago, anti-smoking activists tried to expose tobacco company criminality in suppressing information on the links between smoking and cancer.
Without similar efforts of every sort on a global level, one thing seems certain: the future projected by the EIA will indeed come to pass and human suffering of a previously unimaginable sort will be the order of the day.
Michael T. Klare, a TomDispatch regular, is a professor of peace and world security studies at Hampshire College and the author, most recently, of The Race for What’s Left. A documentary movie version of his book Blood and Oil is available from the Media Education Foundation. Follow him on Twitter at @mklare1.
Follow TomDispatch on Twitter and join us on Facebook. Check out the newest Dispatch Book, Nick Turse’s Next Time They’ll Come to Count the Dead, and Tom Engelhardt’s latest book, Shadow Government: Surveillance, Secret Wars, and a Global Security State in a Single-Superpower World.
Copyright 2016 Michael T. Klare
By David Morris
Reprinted with permission from the Institute for Local Self-Reliance
[Editor’s Comment: Note in the article that follows the discussion of the Bank of North Dakota, which has received particular attention in the last few years because of its beneficial role in helping North Dakota weather the storms of the Great Recession. Note especially in this regard the writings of Ellen Brown, President of the Public Banking Institute, author of Web of Debt and the The Public Bank Solution. See also her article, “NORTH DAKOTA’S ECONOMIC “MIRACLE”—IT’S NOT OIL.”]
On June 14th, North Dakotans voted to overrule their government’s decision to allow corporate ownership of farms. That they had the power to do so was a result of a political revolution that occurred almost exactly a century before, a revolution that may hold lessons for those like Bernie Sanders’ supporters who seek to establish a bottom-up political movement in the face of hostile political parties today.
Here’s the story. In the early 1900s North Dakota was effectively an economic colony of Minneapolis/Saint Paul. A Saint Paul based railroad tycoon controlled its freight prices. Minnesota companies owned many of the grain elevators that sat next to the rail lines and often cheated farmers by giving their wheat a lower grade than deserved. Since the flour mills were in Minneapolis, shipping costs reduced the price wheat farmers received. Minneapolis banks held farmers’ mortgages and their operating loans to farmers carried a higher interest than they charged at home.
Farmers, who represented a majority of the population, tried to free themselves from bondage by making the political system more responsive. In 1913 they gained an important victory when the legislature gave them the right, by petition, to initiate a law or constitutional amendment as well as to overturn a law passed by the legislature.
But this was a limited victory for while the people could enable they could not compel.
In 1914, for example, after a 30-year effort, voters authorized the legislature to build a state-owned grain elevator and mill. But in January 1915 a state legislative committee concluded it “would be a waste of the people’s money as well as a humiliating disappointment to the people of the state.” The legislature refused funding.
A few weeks later, two former candidates on the Socialist Party ticket, Arthur C. Townley and Albert Bowen, launched a new political organization, the Non Partisan League (NPL). The name conveyed their strategy: To rely more on program-based politics than party-based politics. According to the NPL its program intended to end the “utterly unendurable” situation in which “the people of this state have always been dependent on their existence on industries, banks, markets, storage and transportation facilities either existing altogether outside of the state or controlled by great private interests outside the state.”
The NPL’s platform contained concrete and specific measures: state ownership of elevators, flour mills, packing houses and cold storage plants; state inspection of grain grading and dockage; state hail insurance; rural credit banks operating at cost; exemption of farm improvements from taxation.
In his recent book, Insurgent Democracy Michael Lansing explains, “Small-property holders anxious to use government to create a more equitable form of capitalism cannot be easily categorized in contemporary political term.” The NPL “reminded Americans that corporate capitalism was not the only way forward.” Supporters of the NPL wanted state sponsored market fairness but not state control. They wanted public options, not public monopolies.
In the language of our 2016 political campaigns, it would not be much of a stretch to characterize the NPL as a movement for an American-style decentralized, anti-corporate, democratic socialism.
The NPL was as one contemporary observer, Thorstein Veblen described it, “large, loose, animated and untidy, but sure of itself in its settled disallowance of the Vested Interests… “
The movement was membership-based. Members were kept informed through a regular newsletter. This was part of a massive popular education effort. Membership fees allowed the NPL to hire organizers and lecturers who traveled throughout the state. Townley, the founder and leader of the NPL, proved an entertaining and charismatic speaker. Sometimes thousands would gather to hear him speak. Speeches themselves were community affairs.
The goal was to convince farmers that collectively they could significantly influence the decisions that would affect their personal and business lives.
To gain power the NPL relied on a political tool born of the Progressive movement: the political primary. To make government more responsive and transparent, Progressives urged states to bypass political conventions, political bosses and backroom deals and adopt direct primaries. By 1916, 25 of the then 48 U.S. states had adopted the primary as the vehicle for nominating political candidates.
The primary system gave people the power to elect candidates of their political party, but the key to the remarkable political revolution that swept through North Dakota was its adoption, in 1908, of an “open primary” law that allowed anyone to vote in a party’s primary even if unaffiliated with that party.
On March 29, 1916 the NPL took advantage of that law by convening its first convention. Attendees endorsed candidates who swore allegiance to its platform. These candidates ran in the June Republican primary, a primary targeted by the NPL because then (as now) the Republican Party dominated North Dakota.
In June 1916 the NPL effectively took over the Republican Party. In November 1916 NPL –endorsed candidates won every statewide office except one and gained a majority in the state Assembly, although not in the Senate. By that time the NPL boasted 40,000 members, an astonishing number given the state population of only 620,000.
In the succeeding legislative session the NPL was able to implement parts of its platform: a grain grading system, a 9-hour workday for women, regulation of railroad shipping rates and increased state aid to rural schools. But the Senate narrowly defeated the key to implementing NPL’s broad vision: a constitutional amendment to allow for state-owned businesses.
In 1918, the NPL gained a majority in the state Senate. That year North Dakotans voted on 10 constitutional amendments. They approved every one. One, endorsed by a resounding margin of 59-41 gave state, county and local governments permission “to engage in industry, enterprises or businesses.” Another allowed the state to guarantee $2 million in bonds and established voting requirements for future bonding. Another created state hail insurance.
Other amendments expanded the possibility of direct democracy by reducing the number of signatures required to put an initiative on the ballot, and by allowing constitutional amendments to be passed by a simple majority of the voters.
In June 1919, voters approved 6 of 7 legislatively referred statutes, including the establishment of a state bank, that latter by a vote of 56-44. The one ballot initiative North Dakotans rejected—giving the Governor the authority to appoint every county school superintendent—was itself revealing. North Dakotans wanted a state that could stand up to big out-of-state corporations but they preferred local control to state control.
The Bank of North Dakota (BND) was the centerpiece of the NPL’s effort to take back control of their economy. It was intended to strengthen, not undercut local banks. It established no branches, nor did it accept independent deposits or accounts. The Bank “strongly recommended” that borrowers seek mortgages by working through local institutions. Banks across the state used the BND as a clearinghouse for various financial transactions.
Farmers immediately benefited as their interest rates on loans dropped to about 6 percent from the prevailing 8.7 percent.
In November 1920 voters strengthened the BND by narrowly approving an initiative requiring all state, county, township, municipal and school district funds be deposited there.
In March 1920 the NPL legislature referred to the people a constitutional amendment allowing them to petition for the recall of any elected officials. That unprecedented extension of direct democracy proved its undoing, for in late 1918, at the peak of the NPL’s power, political opposition had coalesced into a new organization, the Independent Voters Association (IVA). As the NPL battled internal divisions and a growing unease that it had begun to pursue measures beyond its mandate, the IVA gained support.
The IVA used the political tools the NPL had created. In 1921 its members successfully petitioned for recall elections for the three state officers who constituted the membership of the Industrial Commission that oversaw state enterprises: the governor, attorney general and commissioner of agriculture. The IVA slate won by a whisker. It was the first and last time a U.S. Governor has been successfully recalled.
The IVA immediately set about to undo the NPL program by putting nine provisions on the ballot, including one to abolish the state Bank. Another intended to shrink the capacity of state government by reducing the amount of state bonded debt. Another would have undermined the open primary by requiring separate party ballots for primaries.
Every ballot measure lost, albeit by very narrow margins.
In November 1922 the IVA achieved what the NPL had four years before: Control of all three branches of state government. The NPL’s abrupt disintegration resulted from a number of factors. In 1921 the price of wheat dropped about 60 percent. The resulting economic pain would have reduced the support for any sitting government. The Russian Revolution ushered in a nationwide “Red Scare.” The opposition labeled the NPL’s leaders Communists and Bolsheviks and launched a new magazine called Red Flame. Townley himself was jailed under a Minnesota sedition law for opposing the U.S. involvement in WWI. Meanwhile, internal divisions continued to beset the NPL.
The Legacy of the NPL
As the Nation magazine observed in 1923, “…although the visible machinery largely melted away, a sentiment and a point of view had been established in the minds of hundreds of thousands of farmers and ranchers.” Looking back in 1955, Robert L. Morian, author of the classic Political Prairie Fire, comment that the NPL helped to develop “some of the most independently minded electorates in the country.”
Those independently minded electorates and their anti-corporate, pro-cooperative and independent business sentiment continued to inform and often guide policymakers in the decades to come.
The North Dakota Mill and Elevator Association began operation in a modern facility in 1922. Today it consists of 7 milling units, an elevator and flour mill and a packing warehouse to prepare bagged products for shipment. It is the largest flour mill in the U.S. and the only state-owned milling facility.
In 1932, North Dakotans voted 57 to 43 to ban corporations from owning or leasing farmland.
In 1963 the legislature enacted a law that required pharmacies be owned by a state-registered pharmacist. The effect was to ban chains, except those operating at the time the law was passed.
In 1980 North Dakotans voted to establish a State Housing Finance Agency to provide mortgages to low income households.
In recent years several of these laws protecting independent farmers and businesses have come under attack by big corporations. After several attempts by Big Pharmacy failed to convince the legislature to repeal the Pharmacy Ownership Law, Wal Mart spent $9.3 million to finance a ballot initiative. In November 2014, by a vote of 59-41 the initiative lost.
In 2015 big corporations did convince the legislature to overturn the 1932 anti-corporate farming law. This June, as noted at the beginning of this article, by a resounding margin of 76-24 North Dakotans voted to reinstate the old law.
Today the economic structure of North Dakota reflects its focus on independent and cooperative businesses.
The Pharmacy Ownership law, for example, has markedly benefited North Dakota. A report by the Institute for Local Self-Reliance (ILSR) found that on every key measure of pharmacy care, including quality and the price of drugs, North Dakota’s independent pharmacies outperform those of neighboring states and the U.S. as a whole. Unsurprisingly North Dakota also has more pharmacies per capita than other states. Its rural residents are more likely to have a nearby pharmacist.
North Dakota’s banking system reflects a similar community-based structure. An analysis by ILSR found that, on a per capita basis, the state boasts almost six times as many locally owned financial institutions as the rest of the nation. (89 small and mid sized community banks and 38 credit unions). These control 83 percent of the deposits of the state. North Dakota’s community banks have given 400 percent more small business loans than the national average. Student loan rates are among the lowest in the country.
As Stacy Mitchell, Director of ILSR’s Community-Scaled Economy Initiative observes, “While the publicly owned BND might well be characterized as a socialist institution, it has had the effect of enabling North Dakota’s local banks to be very successful capitalists.” In recent years local banks in North Dakota have earned a return on capital nearly twice that of the nation’s largest 20 banks.
In the last two decades years the BND has generated almost $1 billion in “profit” and returned almost half of that to the state’s general fund.
Recall that in 1919, voters had approved the Bank of North Dakota, by the very slim margin of 51-49. A switch of 2,000 votes would have killed the Bank in its infancy. Today no party would dare propose its destruction.
North Dakota’s impressive 21st century telecommunications infrastructure is also a testament to its historic focus on local and independent ownership. The state ranks 47th in population density. That means it has one of the highest costs per household for installing state-of-the-art high-speed fiber networks. Nevertheless it boasts the highest percentage of people with access to such networks in the country. Why? One reason is its abundance of rural cooperatives and small telecom companies, 41 providers in all, including 17 cooperatives.
North Dakota is also home to the Dakota Carrier Network. Owned by 15 independent rural telecommunications companies, the DCN crisscrosses the state with more 1,400 miles of fiber backbone. In the last five years independently owned companies have invested more than $100 million per year to bring fiber to the home. They now serve more than 164,000 customers in 250 communities.
What Should Bernie’s Brethren Do?
Certainly the road to political power faces many more obstacles now than the NPL faced a century ago. North Dakota was a largely agricultural state. The key to NPL’s organizing effort was access to a car and gas money, not an easy get in those days, but much easier than the amount of money now needed to mount a political campaign.
Most new movements will be unable to take advantage of the open primary. After the NPL gained power in more than half a dozen states, the existing parties fought back. Nevertheless, 11 states still have pure open primaries; about a dozen more have hybrid systems.
Recently the courts have not been sympathetic to the open primary. Not long ago the Supreme Court invented a new “right of association” and bestowed that right on political parties. In 2000, for example, by a 7-2 vote, the Court overturned a California form of open primary approved by the voters by a 60-40 vote. Writing for the Majority, Justice Antonin Scalia objected that the California law “forces political parties to associate with—to have their nominees, and hence their positions, determined by—those who, at best, have refused to affiliate with the party, and, at worst, have expressly affiliated with a rival.”
After the California decision the voters of Washington, by a similar 60-40 vote, adopted an open primary system similar to California’s but with a key difference: The candidate would have to declare a “party preference” that would appear next to his or her name on the ballot. In 2008, the Supreme Court, again by a 7-2 vote, this time upheld that law, a ruling that might allow for a variant of the NPL strategy.
Before we develop a strategy for winning office we need to take a page from the NPL playbook and develop a platform, one consisting of specific, concrete, policies, not a laundry list of all desirable policies.
Bernie Sanders and his followers currently are working to write a platform for the Democratic Party convention. That is important and useful, but that platform by its nature will have a national focus and speak to the exercise of power by the federal government. We also need platforms that focus on states and cities and counties and school districts and offer concrete measures they have the authority to enact.
Those platforms will provide the basis for endorsing candidates, regardless of their political affiliation or whether they run in a closed or open primary state. In those states that permit, we may be able to enact various planks of the platform through initiative and referendum. At this point 27 states have initiative and 24 have referendum. Nineteen allow constitutional amendments by initiative.
The Nonpartisan League’s tenure in power was brief, but its policies, the public institutions it built and perhaps most important, the public sentiment it nurtured and brought to maturity, endure to this day: A true example of a political revolution from the bottom up.
Scientists believe that simple land management techniques can increase the rate at which carbon is absorbed from the atmosphere and stored in soils.
For many climate change activists, the latest rallying cry has been, “Keep it in the ground,” a call to slow and stop drilling for fossil fuels. But for a new generation of land stewards, the cry is becoming, “Put it back in the ground!”
As an avid gardener and former organic farmer, I know the promise that soil holds: Every ounce supports a plethora of life. Now, evidence suggests that soil may also be a key to slowing and reversing climate change.
Evidence suggests that soil may also be a key to slowing and reversing climate change.
“I think the future is really bright,” said Loren Poncia, an energetic Northern Californian cattle rancher. Poncia’s optimism stems from the hope he sees in carbon farming, which he has implemented on his ranch. Carbon farming uses land management techniques that increase the rate at which carbon is absorbed from the atmosphere and stored in soils. Scientists, policy makers, and land stewards alike are hopeful about its potential to mitigate climate change.
Carbon is the key ingredient to all life. It is absorbed by plants from the atmosphere as carbon dioxide and, with the energy of sunlight, converted into simple sugars that build more plant matter. Some of this carbon is consumed by animals and cycled through the food chain, but much of it is held in soil as roots or decaying plant matter. Historically, soil has been a carbon sink, a place of long-term carbon storage.
But many modern land management techniques, including deforestation and frequent tilling, expose soil-bound carbon to oxygen, limiting the soil’s absorption and storage potential. In fact, carbon released from soil is estimated to contribute one-third of global greenhouse gas emissions, according to the Food and Agriculture Organization of the United Nations.
Ranchers and farmers have the power to address that issue. Pastures make up 3.3 billion hectares, or 67 percent, of the world’s farmland. Carbon farming techniques can sequester up to 50 tons of carbon per hectare over a pasture’s lifetime. This motivates some ranchers and farmers to do things a little differently.
“It’s what we think about all day, every day,” said Sallie Calhoun of Paicines Ranch on California’s central coast. “Sequestering soil carbon is essentially creating more life in the soil, since it’s all fed by photosynthesis. It essentially means more plants into every inch of soil.”
Carbon released from soil is estimated to make up to one-third of global greenhouse gas emissions.
Calhoun’s ranch sits in fertile, rolling California pastureland about an hour’s drive east of Monterey Bay. She intensively manages her cattle’s grazing, moving them every few days across 7,000 acres. This avoids compaction, which decreases soil productivity, and also allows perennial grasses to grow back between grazing. Perennial grasses, like sorghum and bluestems, have long root systems that sequester far more carbon than their annual cousins.
By starting with a layer of compost, Calhoun has also turned her new vineyard into an effective carbon sink. Compost is potent for carbon sequestration because of how it enhances otherwise unhealthy soil, enriching it with nutrients and microbes that increase its capacity to harbor plant growth. Compost also increases water-holding capacity, which helps plants thrive even in times of drought. She plans to till the land only once, when she plants the grapes, to avoid releasing stored carbon back into the atmosphere.
Managed grazing and compost application are just a few common practices of the 35 that the Natural Resources Conservation Service recommends for carbon sequestration. All 35 methods have been proven to sequester carbon, though some are better documented than others.
David Lewis, director of the University of California Cooperative Extension, says the techniques Calhoun uses, as well as stream restoration, are some of the most common. Lewis has worked with theMarin Carbon Project, a collaboration of researchers, ranchers, and policy makers, to study and implement carbon farming in Marin County, California. The research has been promising: They found that one application of compost doubled the production of grass and increased carbon sequestration by up to 70 percent. Similarly, stream and river ecosystems, which harbor lots of dense, woody vegetation, can sequester up to one ton of carbon, or as much as a car emits in a year, in just a few feet along their beds.
One application of compost doubled the production of grass and increased carbon sequestration by up to 70 percent.
On his ranch, Poncia has replanted five miles of streams with native shrubs and trees, and has applied compost to all of his 800 acres of pasture. The compost-fortified grasses are more productive and have allowed him to double the number of cattle his land supports. This has had financial benefits. Ten years ago, Poncia was selling veterinary pharmaceuticals to subsidize his ranch. But, with the increase in cattle, he has been able to take up ranching full time. Plus, his ranch sequesters the same amount of carbon each year as is emitted by 81 cars.
Much of the research on carbon farming focuses on rangelands, which are open grasslands, because they make up such a large portion of ecosystems across the planet. They are also, after all, where we grow a vast majority of our food.
“Many of the skeptics of carbon farming think we should be planting forests instead,” Poncia said. “I think forests are a no-brainer, but there are millions of acres of rangelands across the globe and they are not sequestering as much carbon as they could be.”
The potential of carbon farming lies in wide-scale implementation. The Carbon Cycle Institute, which grew out of the Marin Carbon Project with the ambition of applying the research and lessons to other communities in California and nationally, is taking up that task.
“It really all comes back to this,” said Torri Estrada, pointing to a messy white board with the words SOIL CARBON scrawled in big letters. Estrada is managing director of the Carbon Cycle Institute, where he is working to attract more ranchers and farmers to carbon farming. The white board maps the intricate web of organizations and strategies the institute works with. They provide technical assistance and resources to support land stewards in making the transition.
“If the U.S. government would buy carbon credits from farmers, we would produce them.”
For interested stewards, implementation, and the costs associated with it, are different. It could be as simple as a one-time compost application or as intensive as a lifetime of managing different techniques. But for all, the process starts by first assessing a land’s sequestration potential and deciding which techniques fit a steward’s budget and goals. COMET-Farm, an online tool produced by the U.S. Department of Agriculture, can help estimate a ranch’s carbon input and output.
The institute also works with state and national policy makers to provide economic incentives for these practices. “If the U.S. government would buy carbon credits from farmers, we would produce them,” Poncia said. These credits are one way the government could pay farmers to mitigate climate change. “Farmers overproduce everything. So, if they can fund that, we will produce them,” he said. While he is already sequestering carbon, Poncia says that he could do more, given the funding.
Estrada sees the bigger potential of carbon farming to help spur a more fundamental conversation about how we relate to the land. “We’re sitting down with ranchers and having a conversation, and carbon is just the medium for that,” he said. Through this work, Estrada has watched ranchers take a more holistic approach to their management.
On his ranch, Poncia has shifted from thinking about himself as a grass farmer growing feed for his cattle to a soil farmer with the goal of increasing the amount of life in every inch of soil.
Sunday, April 17th was the designated moment. The world’s leading oil producers were expected to bring fresh discipline to the chaotic petroleum market and spark a return to high prices. Meeting in Doha, the glittering capital of petroleum-rich Qatar, the oil ministers of the Organization of the Petroleum Exporting Countries (OPEC), along with such key non-OPEC producers as Russia and Mexico, were scheduled to ratify a draft agreement obliging them to freeze their oil output at current levels. In anticipation of such a deal, oil prices had begun to creep inexorably upward, from $30 per barrel in mid-January to $43 on the eve of the gathering. But far from restoring the old oil order, the meeting ended in discord, driving prices down again and revealing deep cracks in the ranks of global energy producers.
It is hard to overstate the significance of the Doha debacle. At the very least, it will perpetuate the low oil prices that have plagued the industry for the past two years, forcing smaller firms into bankruptcy and erasing hundreds of billions of dollars of investments in new production capacity. It may also have obliterated any future prospects for cooperation between OPEC and non-OPEC producers in regulating the market. Most of all, however, it demonstrated that the petroleum-fueled world we’ve known these last decades — with oil demand always thrusting ahead of supply, ensuring steady profits for all major producers — is no more. Replacing it is an anemic, possibly even declining, demand for oil that is likely to force suppliers to fight one another for ever-diminishing market shares.
The Road to Doha
Before the Doha gathering, the leaders of the major producing countries expressed confidence that a production freeze would finally halt the devastating slump in oil prices that began in mid-2014. Most of them are heavily dependent on petroleum exports to finance their governments and keep restiveness among their populaces at bay. Both Russia and Venezuela, for instance, rely on energy exports for approximately 50% of government income, while for Nigeria it’s more like 75%. So the plunge in prices had already cut deep into government spending around the world, causing civil unrest and even in some cases political turmoil.
No one expected the April 17th meeting to result in an immediate, dramatic price upturn, but everyone hoped that it would lay the foundation for a steady rise in the coming months. The leaders of these countries were well aware of one thing: to achieve such progress, unity was crucial. Otherwise they were not likely to overcome the various factors that had caused the price collapsein the first place. Some of these were structural and embedded deep in the way the industry had been organized; some were the product of their own feckless responses to the crisis.
On the structural side, global demand for energy had, in recent years, ceased to rise quickly enough to soak up all the crude oil pouring onto the market, thanks in part to new supplies from Iraq and especially from the expanding shale fields of the United States. This oversupply triggered the initial 2014 price drop when Brent crude — the international benchmark blend — went from a high of $115 on June 19th to $77 on November 26th, the day before a fateful OPEC meeting in Vienna. The next day, OPEC members, led by Saudi Arabia, failed to agree on either production cuts or a freeze, and the price of oil went into freefall.
The failure of that November meeting has been widely attributed to the Saudis’ desire to kill off new output elsewhere — especially shale production in the United States — and to restore their historic dominance of the global oil market. Many analysts were also convinced that Riyadh was seeking to punish regional rivals Iran and Russia for their support of the Assad regime in Syria (which the Saudis seek to topple).
The rejection, in other words, was meant to fulfill two tasks at the same time: blunt or wipe out the challenge posed by North American shale producers and undermine two economically shaky energy powers that opposed Saudi goals in the Middle East by depriving them of much needed oil revenues. Because Saudi Arabia could produce oil so much more cheaply than other countries — for as little as $3 per barrel — and because it could draw upon hundreds of billions of dollars in sovereign wealth funds to meet any budget shortfalls of its own, its leaders believed it more capable of weathering any price downturn than its rivals. Today, however, that rosy prediction is looking grimmer as the Saudi royals begin to feel the pinch of low oil prices, and find themselves cutting back on the benefits they had been passing on to an ever-growing, potentially restive population while still financing a costly, inconclusive, and increasingly disastrous war in Yemen.
Many energy analysts became convinced that Doha would prove the decisive moment when Riyadh would finally be amenable to a production freeze. Just days before the conference, participants expressed growing confidence that such a plan would indeed be adopted. After all, preliminary negotiations between Russia, Venezuela, Qatar, and Saudi Arabia had produced a draft document that most participants assumed was essentially ready for signature. The only sticking point: the nature of Iran’s participation.
The Iranians were, in fact, agreeable to such a freeze, but only after they were allowed to raise their relatively modest daily output to levels achieved in 2012 before the West imposed sanctions in an effort to force Tehran to agree to dismantle its nuclear enrichment program. Now that those sanctions were, in fact, being lifted as a result of the recently concluded nuclear deal, Tehran was determined to restore the status quo ante. On this, the Saudis balked, having no wish to see their arch-rival obtain added oil revenues. Still, most observers assumed that, in the end, Riyadh would agree to a formula allowing Iran some increase before a freeze. “There are positive indications an agreement will be reached during this meeting… an initial agreement on freezing production,” said Nawal Al-Fuzaia, Kuwait’s OPEC representative, echoing the views of other Doha participants.
But then something happened. According to people familiar with the sequence of events, Saudi Arabia’s Deputy Crown Prince and key oil strategist, Mohammed bin Salman, called the Saudi delegation in Doha at 3:00 a.m. on April 17th and instructed them to spurn a deal that provided leeway of any sort for Iran. When the Iranians — who chose not to attend the meeting — signaled that they had no intention of freezing their output to satisfy their rivals, the Saudis rejected the draft agreement it had helped negotiate and the assembly ended in disarray.
Geopolitics to the Fore
Most analysts have since suggested that the Saudi royals simply considered punishing Iran more important than raising oil prices. No matter the cost to them, in other words, they could not bring themselves to help Iran pursue its geopolitical objectives, including giving yet more support to Shiite forces in Iraq, Syria, Yemen, and Lebanon. Already feeling pressured by Tehran and ever less confident of Washington’s support, they were ready to use any means available to weaken the Iranians, whatever the danger to themselves.
“The failure to reach an agreement in Doha is a reminder that Saudi Arabia is in no mood to do Iran any favors right now and that their ongoing geopolitical conflict cannot be discounted as an element of the current Saudi oil policy,” said Jason Bordoff of the Center on Global Energy Policy at Columbia University.
Many analysts also pointed to the rising influence of Deputy Crown Prince Mohammed bin Salman, entrusted with near-total control of the economy and the military by his aging father, King Salman. As Minister of Defense, the prince has spearheaded the Saudi drive to counter the Iranians in a regional struggle for dominance. Most significantly, he is the main force behind Saudi Arabia’s ongoing intervention in Yemen, aimed at defeating the Houthi rebels, a largely Shia group with loose ties to Iran, and restoring deposed former president Abd Rabbuh Mansur Hadi. After a year of relentless U.S.-backed airstrikes (including the use of cluster bombs), the Saudi intervention has, in fact, failed to achieve its intended objectives, though it has produced thousands of civilian casualties, provoking fierce condemnation from U.N. officials, and created space for the rise of al-Qaeda in the Arabian Peninsula. Nevertheless, the prince seems determined to keep the conflict going and to counter Iranian influence across the region.
For Prince Mohammed, the oil market has evidently become just another arena for this ongoing struggle. “Under his guidance,” the Financial Timesnoted in April, “Saudi Arabia’s oil policy appears to be less driven by the price of crude than global politics, particularly Riyadh’s bitter rivalry with post-sanctions Tehran.” This seems to have been the backstory for Riyadh’s last-minute decision to scuttle the talks in Doha. On April 16th, for instance, Prince Mohammed couldn’t have been blunter to Bloomberg, even if he didn’t mention the Iranians by name: “If all major producers don’t freeze production, we will not freeze production.”
With the proposed agreement in tatters, Saudi Arabia is now expected to boost its own output, ensuring that prices will remain bargain-basement low and so deprive Iran of any windfall from its expected increase in exports. The kingdom, Prince Mohammed told Bloomberg, was prepared to immediately raise production from its current 10.2 million barrels per day to 11.5 million barrels and could add another million barrels “if we wanted to” in the next six to nine months. With Iranian and Iraqi oil heading for market in larger quantities, that’s the definition of oversupply. It would certainly ensure Saudi Arabia’s continued dominance of the market, but it might also wound the kingdom in a major way, if not fatally.
A New Global Reality
No doubt geopolitics played a significant role in the Saudi decision, but that’s hardly the whole story. Overshadowing discussions about a possible production freeze was a new fact of life for the oil industry: the past would be no predictor of the future when it came to global oil demand. Whatever the Saudis think of the Iranians or vice versa, their industry is being fundamentally transformed, altering relationships among the major producers and eroding their inclination to cooperate.
Until very recently, it was assumed that the demand for oil would continue to expand indefinitely, creating space for multiple producers to enter the market, and for ones already in it to increase their output. Even when supply outran demand and drove prices down, as has periodically occurred, producers could always take solace in the knowledge that, as in the past, demand would eventually rebound, jacking prices up again. Under such circumstances and at such a moment, it was just good sense for individual producers to cooperate in lowering output, knowing that everyone would benefit sooner or later from the inevitable price increase.
But what happens if confidence in the eventual resurgence of demand begins to wither? Then the incentives to cooperate begin to evaporate, too, and it’s every producer for itself in a mad scramble to protect market share. This new reality — a world in which “peak oil demand,” rather than “peak oil,” will shape the consciousness of major players — is what the Doha catastrophe foreshadowed.
At the beginning of this century, many energy analysts were convinced that we were at the edge of the arrival of “peak oil”; a peak, that is, in the output of petroleum in which planetary reserves would be exhausted long before the demand for oil disappeared, triggering a global economic crisis. As a result of advances in drilling technology, however, the supply of oil has continued to grow, while demand has unexpectedly begun to stall. This can be traced both to slowing economic growth globally and to an accelerating “green revolution” in which the planet will be transitioning to non-carbon fuel sources. With most nations now committed to measures aimed at reducing emissions of greenhouse gases under the just-signed Paris climate accord, the demand for oil is likely to experience significant declines in the years ahead. In other words, global oil demand will peak long before supplies begin to run low, creating a monumental challenge for the oil-producing countries.
This is no theoretical construct. It’s reality itself. Net consumption of oil in the advanced industrialized nations has already dropped from 50 million barrels per day in 2005 to 45 million barrels in 2014. Further declines are in store as strict fuel efficiency standards for the production of new vehicles and other climate-related measures take effect, the price of solar and wind power continues to fall, and other alternative energy sources come on line. While the demand for oil does continue to rise in the developing world, even there it’s not climbing at rates previously taken for granted. With such countries also beginning to impose tougher constraints on carbon emissions, global consumption is expected to reach a peak and begin an inexorable decline.According to experts Thijs Van de Graaf and Aviel Verbruggen, overall world peak demand could be reached as early as 2020.
In such a world, high-cost oil producers will be driven out of the market and the advantage — such as it is — will lie with the lowest-cost ones. Countries that depend on petroleum exports for a large share of their revenues will come under increasing pressure to move away from excessive reliance on oil. This may have been another consideration in the Saudi decision at Doha. In the months leading up to the April meeting, senior Saudi officials dropped hints that they were beginning to plan for a post-petroleum era and that Deputy Crown Prince bin Salman would play a key role in overseeing the transition.
On April 1st, the prince himself indicated that steps were underway to begin this process. As part of the effort, he announced, he was planning an initial public offering of shares in state-owned Saudi Aramco, the world’s number one oil producer, and would transfer the proceeds, an estimated $2 trillion, to its Public Investment Fund (PIF). “IPOing Aramco and transferring its shares to PIF will technically make investments the source of Saudi government revenue, not oil,” the prince pointed out. “What is left now is to diversify investments. So within 20 years, we will be an economy or state that doesn’t depend mainly on oil.”
For a country that more than any other has rested its claim to wealth and power on the production and sale of petroleum, this is a revolutionary statement. If Saudi Arabia says it is ready to begin a move away from reliance on petroleum, we are indeed entering a new world in which, among other things, the titans of oil production will no longer hold sway over our lives as they have in the past.
This, in fact, appears to be the outlook adopted by Prince Mohammed in the wake of the Doha debacle. In announcing the kingdom’s new economic blueprint on April 25th, he vowed to liberate the country from its “addiction” to oil.” This will not, of course, be easy to achieve, given the kingdom’s heavy reliance on oil revenues and lack of plausible alternatives. The 30-year-old prince could also face opposition from within the royal family to his audacious moves (as well as his blundering ones in Yemen and possibly elsewhere). Whatever the fate of the Saudi royals, however, if predictions of a future peak in world oil demand prove accurate, the debacle in Doha will be seen as marking the beginning of the end of the old oil order.
Michael T. Klare, a TomDispatch regular, is a professor of peace and world security studies at Hampshire College and the author, most recently, of The Race for What’s Left. A documentary movie version of his book Blood and Oil is available from the Media Education Foundation. Follow him on Twitter at @mklare1.
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Copyright 2016 Michael T. Klare
In January 2011, I presented a futures research project to the Progressive Caucus in Congress, then the largest of all the caucuses in that body. The report, Progressives 2040 — which was sponsored by ProgressiveCongress.org and published by Demos — analyzed a large set of major trends that would shape the future of the progressive movement for the next three decades, and offered a set of scenarios that illustrated how these trends might work together to create a range of possible futures that the movement will need to be prepared for.
This is the first post in “What We Know About The Progressive Future” — a series that I imagine will be a long (probably 10-12 post) look at that research five years on, updating my conclusions and taking a fresh look at the big drivers and high leverage points that will determine the future of our movement.
For most pundits, the most striking thing about the Iowa Caucus was the virtual tie between the two Democratic candidates (which portends a longer and perhaps more exciting election season and higher ratings for those in the media to look forward to), and the surprising 1-2-and-3 order of Cruz, Trump, and Rubio. I’m writing this less than 24 hours after the caucuses ended, and more than enough on both these topics has already been written by others (for God’s sake, people, it’s just Iowa), so I’m going to spare you another analysis ex cathedra from my belly button as to What It All Means For November.
I’m far more interested in another trend that emerged last night — a small detail that will almost certainly have a much longer historical tail than anything else that might happen between now and Election Day. This trend was crystallized by the stunning fact that Bernie Sanders got 85% of the votes of caucus-goers under 30.
That’s not a typo. Eighty-five percent.
That’s a number that strategists from every end of the political spectrum need to be paying attention to, because it is heralding the arrival of the Millennial Generation as a political force to be reckoned with.
My report saw this coming. Back in January 2011, I wrote this about them:
The Millennial generation (born 1980-2000) is the largest and most ethnically diverse generation in American history, with 44% identifying as members of a racial minority. They are the most globally connected generation to date: they travel more, speak more languages, and have friends all over the world. They are more progressive in their core values and attitudes that any cohort we’ve seen in at least a century. And they are rising fast: by 2020, they will be outvoting their elders, dominating elections and bringing their own priorities to the table. We can expect the Millennials to launch their first serious presidential candidate in 2020, and elect their first president probably no later than 2024.
Perhaps the most important fact about the Millennials is the sheer size of this generation. They’re the first cohort we’ve seen in the past 40 years that’s actually big enough to swamp their Boomer parents, whose interests and worldviews have dominated American politics ever since the youngest of them hit voting age in the late 1970s. The Boom was the biggest generation in American history, to the point where their sheer size itself was transformative (as they say: quantity has a quality all its own). But the Millennials are even bigger. And between now and 2020, the youngest edge of this generation will finally turn 18 and register to vote. The results stand to be at least as transformative for us as a nation as the moment when the Boomers themselves arrived.
Conservative Millennials? Don’t hold your breath
Any number of GOP pundits have written thumb-sucking articles explaining how this cohort is going to become more conservative as it ages (because every generation does, right?) Feel free to rip those up: it’s not likely to happen, for several reasons — starting with the fact that no, not every generation does. The Boomers did, because from left to right and youth through their approaching old age, they’ve shared a belief in radical individualism — the primacy of the individual over any claims made by society — that fed everything from Evangelicalism and free market fundamentalism on the right to New Age religions and social experimentation on the left. That individualism is the one shining through-line that defines everything that generation has ever embraced. It made them hippies. And it also made them vote for Reagan.
The Millennials are their historical opposite number — a generation raised from babyhood to cooperate, share, include, network, and self-organize. They value conformity (Boomers and Xers are horrified by the “calling out” ritual that Millennials run on each other constantly as they vigilantly police each other’s behavior. We’d have choked on our own spit before telling each other what to say, think or do; and would have rightly expected to be told to fuck off if we tried it), and as this pervades their politics in the coming decades, it’s going to involve a lot of telling other people how they should live. That’s how their GI grandparents created and enforced the great American Consensus of the ’40s, ’50s, and ’60s, and it’s how they’re going to re-create a new consensus about the Next America they’re going to build.
That bred-in-the-bone collectivism is likely to be as durable a lifelong feature as Boomer individualism has been; but it stands in stark opposition to conservatism as it’s currently constituted. It’s possible to imagine another, distinctively Millennial form of conservatism emerging in time — but it would have to be rooted in the idea of a strong social contract, one that obligates individuals to cede some of their desires to the greater good, represented by trusted authorities — and is willing to use social shame as an enforcement mechanism. The GOP is a long way from offering any narratives along these lines now. If they do emerge, it could take another 20 years or more, becoming something today’s Millennials embrace as they age on through their 40s, 50s and 60s.
Other conservatives hold out hope that that all-time-high number of Millennials from immigrant families will benefit them in time, since the usual pattern has been for second-generation immigrants (the first generation born here) to do very well educationally and economically, and to vote more conservatively than either their parents or their third-gen kids. That might be a very plausible scenario — except for the nasty fact that Millennials have already grown up scarred and terrorized by a GOP that has never been able to lay off immigrant-bashing. Again, it’s going to take a radical change within that party — plus another 15 years of over-the-top effort — to win even the grudging trust of a generation that’s already marinated in decades of conservative anti-immigrant hysteria before that’s even remotely likely.
In any event: anybody waiting for the Great Millennial Conservative Revival probably shouldn’t hold their breath. If it comes at all, it’s going to be a very long while indeed. In the meantime, these young adults have a revolution to pull off. And that moment is coming — much sooner than anybody seems ready to think.
Millennials and Elections
Obama, to his credit, was the first candidate to recognize the raw political power and profound unrest of this rising cohort in 2008. Even though fully half of the Millennial generation was still too young to vote, his overt efforts to capture the energy and attention of the half that could was a conscious strategy. The Millennials ended up supplying him with the margin that put him over the top in the election — support he later rewarded by bringing home the troops (most of whom were Millennials) and restructuring the federal student loan program to make over $30 billion more in Pell Grants available and reduce the loan burden on new graduates (both of which were policies I pointed to in my original 2011 report).
But the Millennials want more. They’re looking into a future that most of them understand is a fatal dead end without a radical, rip-up-the-floorboards restructuring of how the entire planet works — how we do everything from energy and money to community and education to transportation and agriculture. This yearning for a different kind of world even has the potential to upend our current understandings of “right” and “left,” as I wrote in my report:
Some research suggests that this generation’s politics lean toward the “independent” and the “centrist.” However, those words don’t mean the same thing to under-30 Americans that they do to older ones. The self-described “independents” also express core values that are deeply collectivist and inclusive, which gives them a strong affinity for progressive ideas and solutions. (Studies by Pew and Barna have even found these same affinities among self-identified conservatives in this cohort.) Likewise, these “centrists” see their generation’s communal focus on a shared future and shared prosperity as a matter of plain common sense. To them, “we’re in this together” is not a radical idea; indeed, it stands at the center of their politics.
The Millennials spurned Hillary in 2008 because they were craving a true change candidate — and Obama promised to be that. But in the end, the change he could deliver wasn’t enough. And that’s why this generation is going, overwhelmingly, for Bernie Sanders, whom they see as sitting entirely outside the corrupt party system that made it impossible for Obama to give them the goods, unbeholden to Wall Street, uncontaminated by party cronyism, unfiltered in the media — someone who seems to be entirely their own. This is what their candidates look like — and are going to continue to look like for the next several election cycles.
Given that the youngest 15% or so of the Millennial cohort is still too young to vote, it’s not clear that the Millennials will get their revolution this year. My prediction above that they’d dominate our elections by 2020 was based on the fact that that’s when the very tail end of the cohort — the ones born in 2000 — will all have reached adulthood, putting them finally at their full political strength. Whether or not they show up for 2016 is also complicated by a few other factors, including:
- How disillusioned the older ones are following their experience with Obama, whom many of them feel very disappointed by — a real problem that surfaced in 2012, when many of them didn’t return to the polls.
- The general tendency of young adults in their 20s to not vote. Voting is a behavior that becomes more reliable with age. By 2020, the oldest Millennials will be 40, and half will be over 30 — which means they should start showing up far more regularly.
- Persistent efforts on the part of the GOP to disenfranchise students, which have large effects in some parts of the country.
- How well Sanders survives the onslaught of conservative attacks that we all know are coming.
It’s safe to say that the Millennials will be a vastly bigger factor in 2016 than they were in either 2008 or 2012 — and that Sanders’ success to date can and should be interpreted as this generation’s announcement of its growing political presence with far louder and more insistent authority than we’ve ever heard from them before.
However, in this election cycle, it’s not at all clear that it will be enough to get them what they want. We are tantalizingly close to a generational tipping point, but have not completely arrived at it just quite yet. But by the next cycle, that point will almost certainly be well behind us — and from then on, for the next 40 years, our politics will be pretty much entirely dominated, owned, and determined by the Millennials’ collectivist worldviews, interests, desires, and priorities. They will, this time or next, succeed in voting themselves the transformation they seek. It’s not a question of if, but when.
What we’re seeing when we look at the Bernie Sanders phenomenon is a direct window into our own political future. When will it emerge? Maybe not today, and maybe not this November — but it’s coming soon, and it or something like it will be the dominant political reality for the rest of our lives.
Photo: Ian Buck via Flickr
Sara Robinson is a Seattle-based futurist and veteran blogger on culture, politics, and religion. Since 2006, her work (gathered in the Archive section of her blog) regularly appeared at Orcinus, Our Future, Group News Blog, and Alternet. She’s also written for Salon, Huffington Post, Grist, the New Republic, New York Magazine, Firedoglake, and many other sites.
Robinson holds an MS in Futures Studies from the University of Houston, and a BA in Journalism from the USC Annenberg School of Communication. She was a Schumann Fellow, and also held senior fellowships at the Campaign for America’s Future and the Commonweal Foundation. She currently serves on the national board of NARAL Pro-Choice America.
Near Misses, Radioactive Leaks, and Flooding
In both Chernobyl and Fukushima, areas around the devastated plants were made uninhabitable for the foreseeable future. In neither place, before disaster began to unfold, was anyone expecting it and few imagined that such a catastrophe was possible. In the United States, too, despite the knowledge since 1945 that nuclear power, at war or in peacetime, holds dangers of a stunning sort, the general attitude remains: it can’t happen here — nowhere more dangerously in recent years than on the banks of New York’s Hudson River, an area that could face a nuclear peril endangering a population ofnearly 20 million.
As the Fukushima tragedy struck, President Obama assured Americans that U.S. nuclear plants were closely monitored and built to withstand earthquakes. That statement covered one of the oldest plants in the country, the Indian Point Energy Center (IPEC) in Westchester, New York, first opened in 1962. One of 61 commercial nuclear plants in the country, it has two reactors that generate electricity for homes across New York City and Westchester County. It is located in the sixth most densely populated urban area in the world, the New York metropolitan region, just 30 miles north of Manhattan Island and the planet’s most economically powerful city.
The plant sits astride two seismic faults, which has prompted those opposing its continued operation to call for a detailed analysis of its capacity to resist an earthquake. In addition, a long series of accidents and ongoing hazards has only increased the potential for catastrophe. According to a report by the National Resources Defense Council (NDRC), if a nuclear disaster of a Fukushima magnitude were to strike Indian Point, it would necessitate the evacuation of at least 5.6 million people. In 2003, the existing evacuation plan for the area was deemed inadequate in a report by James Lee Witt, former head of the Federal Emergency Management Agency.
American officials have urged U.S. citizens to stay 50 miles away from the Fukushima plant. Such a 50-mile circle around IPEC would stretch past Kingston in Ulster County to the north, past Bayonne and Jersey City to the south, almost to New Haven, Connecticut, to the east, and into Pennsylvania to the west. It would include all of New York City except for Staten Island and all of Fairfield, Connecticut. “Many scholars have already argued that any evacuation plans shouldn’t be called plans, but rather ‘fantasy documents,’” Daniel Aldrich, a professor of political science at Purdue University, told the New York Times.
Paul Blanch, a nuclear engineer who worked in the industry for 40 years as well as with the Nuclear Regulatory Commission (NRC), thinks a worst-case accident at Indian Point could make the region, including parts of Connecticut, uninhabitable for generations.
According to a report from the Indian Point Safe Energy Coalition, there were 23 reported problems at the plant from its inception to 2005, including steam generator tube ruptures, reactor containment flooding, transformer fires, the failure of backup power for emergency sirens, and leaks of radioactive water laced with tritium. In the latest tritium leak, reported only last month, an outflow of the radioactive isotope from the plant has infused both local groundwater and the Hudson River. (Other U.S. nuclear plants have had their share of tritium leaks as well, including Turkey Point nuclear plant in Florida where such a leak is at the moment threatening drinking water wells.)
Experts agree that although present levels of tritium in groundwater near the plant are “alarming,” the tritium in the river will not be considered harmful until it reaches a far greater concentration of 120,000 picocuries per liter of water. (A picocurie is a standard unit of measurement for radioactivity.) Tritium is the lightest radioactive substance to leak from Indian Point, but according to an assessment by the New York Department of State, other potentially more dangerous radioactive elements like strontium-90, cesium-137, cobalt-60, and nickel-63 are also escaping the plant and entering both the groundwater and the river.
Representatives of Entergy Corporation, which owns the Indian Point plant, report that they don’t know when the present leak began or what its source might be. “No one has made a statement as to when the leak started,” wrote Paul Blanch in an email to us. “It could have started two years ago.” Nor does anyone seem to know where the leak is, how much radioactive matter is leaking, or how it can be stopped. The longer the leak persists, the greater the likelihood of isotopes more potent than tritium contaminating local drinking water.
According to David Lochbaum, director of the Nuclear Safety Project for the Union of Concerned Scientists (UCS) and once a trainer for NRC inspectors, the danger of flooding at the reactor should be an even greater focus of concern than radioactive substance outflows, since it could result in a reactor core meltdown. Yet despite repeated calls for Indian Point’s shutdown from the early 1970s on, it keeps operating.
On April 2, 2000, the NRC rated one of Indian Point’s two reactors the most troubled in the country, and it has been closed for lengthy periods because of system failures of various sorts. This, it turns out, is typical of Entergy-owned reactors. There were 10 “near-miss” incidents at U.S. nuclear reactors last year, a majority of them at three Entergy plants, according to a UCS report on nuclear plant safety. A near-miss incident is an event or condition that could increase the chance of reactor core damage by a factor of 10 or more. In response, the Nuclear Regulatory Commission must send an inspection team to investigate.
The number of such incidents has declined since UCS initiated its annual review in 2010, “overall, a positive trend,” according to report author Lochbaum. “Five years ago, there were nearly twice as many near misses. That said, the nuclear industry is only as good as its worst plant owner. The NRC needs to find out why Entergy plants are experiencing so many potentially serious problems.” Upstate New York’s Ginna plant, he adds, has been operating as long as Indian Point, but with only two “events” in its history. At Indian Point “there’s a major event every two to three years.”
What troubles Lochbaum more than anything else is Indian Point’s vulnerability to flooding. “There was a problem in May 2015 where a transformer exploded,” he told us. “There was an automatic fire sprinkler system installed to put this out. But it ended up flooding the building adjacent to where the explosion had taken place. Fortunately a worker noticed that an inch or two of water had accumulated. If the room had flooded up to five inches, all the power in the plant would have been lost. It would have plunged unit 3 into a ‘station blackout.’”
This might indeed have led to some kind of Fukushima-on-the-Hudson situation. In Fukushima, after the earthquake wiped out the normal power supply and tsunami floodwaters took away the backup supply, workers were unable to get cooling water into the reactor cores and three of the plant’s six reactors melted down.
In 2007, when Indian Point’s plant owner applied to the NRC for a 20-year extension of the plant’s operating license, it was found that a flood alarm could be installed in the room in question for about $200,000. As Lochbaum explains, “The owner determined it was cost-beneficial, that if they installed this flood alarm… it [would reduce] the risk of core meltdown by 20%, and [reduce] the amount of radiation that people on the plant could be exposed to by about 40%, at a cost of about two cents per person for the 20 million people living within 50 miles of the plant.” But nine years later, he told us, that flood alarm has still not been installed.
Potential Pipeline Explosions
As if none of this were enough, a new set of dangers to Indian Point have arisen in recent years due to a high-pressure natural gas pipeline currently being built by Spectra Energy. Dubbed the Algonquin Incremental Market (AIM) pipeline, it is to carry fracked natural gas from the Marcellus Shale formation underlying New York and adjacent states to the Canadian border. At 42 inches in diameter, this pipeline is the biggest that can at present be built — and here’s the catch: AIM is slated to pass within 150 feet of the plant’s reactors.
A former Spectra worker hired to help oversee safety during the pipeline’s construction told a reporter that the company had taken dangerous shortcuts in its rush to begin the project. He had witnessed, he said, “at least two dozen” serious safety violations and transgressions.
Taking shortcuts in pipeline construction could, in the end, prove a risky business. Pipeline ruptures are the commonest cause of gas explosions like the one that, in March 2014 in Manhattan’s East Harlem, killed eight, injured 70, and leveled two apartment buildings. Robert Miller, chairman of the National Association of Pipeline Safety Representatives, attributed the rising rates of such incidents in newly constructed pipelines to “poor construction practices or maybe not enough quality control, quality assurance programs out there to catch these problems before those pipelines go into service.”
In January 2015, the National Transportation Safety Board published a study documenting that gas accidents in “high-consequence” areas (where there are a lot of people and buildings) have been on the rise. With the New York metropolitan area so close to Indian Point, it seems odd indeed to independent experts that the nuclear plant with the sorriest safety history in the country has been judged safe enough for a high-pressure gas pipeline to be run right by it.
A hazards assessment replete with errors was the basis for the go-ahead. Richard B. Kuprewicz, a pipeline infrastructure expert and incident investigator with more than 40 years of energy industry experience, has called that risk assessment “seriously deficient and inadequate.”
At another nuclear plant subsequently shut down, as David Lochbaum points out, a rigorous risk analysis was conducted for possible explosions based on a worst-case scenario. (“I couldn’t think of any scenario that would be worse than what they presumed.”) At Indian Point, the risk analysis was, however, done on a best-case basis. Among other things, it assumed that any pipeline leak around the plant could be stopped in less than three minutes — an unlikelihood at best. “It’s night and day. They did a very conservative analysis for [the other plant] and a very cavalier best-case scenario for Indian Point… I don’t know why they opted for [this] drive-by analysis.”
Of all the contaminants released in this industrial world, radioactivity may, in a sense, be the least visible and least imaginable, even if the most potentially devastating, were something to go wrong. As a result, the dangers of the “peaceful” atom have often proved hard to absorb before disaster strikes — as at the Three Mile Island reactor near Middletown, Pennsylvania, on March 28, 1979. Even when such a power plant sits near a highway or a community, it’s usually a reality to which people pay scant attention, in part because nuclear science is alien territory. This is why safety at nuclear power plants has been something citizens have relied on the government for.
The history of Indian Point, however, offers a grim reminder that the government agencies expected to protect citizens from disaster aren’t doing a particularly good job of it. Over the past several years, for instance, residents in the path of the AIM pipeline project have begun accusing the Federal Energy Regulatory Commission (FERC) of overwhelming bias in the industry’s favor. As FERC has a corner on oversight and approval of all pipeline construction, this is alarming. Its stamp of approval on a pipeline can only be contested via appeals that lead directly back to FERC itself, as the Natural Gas Act of 1938 gave the agency sole discretion over pipeline construction in the U.S. Ever since then, its officials have approved pipelines of every sort almost without exception. Worse yet, at Indian Point, the Nuclear Regulatory Commission joined FERC in green-lighting AIM.
During the two-and-a-half-year period in which the pipeline was approved and construction began, the mainstream media virtually ignored the project and its potential dangers. Only this February, when New York Governor Andrew Cuomo, who has been opposed to the relicensing of Indian Point, first raised concerns about the dangers of the pipeline, did the New York Times, the paper of record for the New York metropolitan area, finally publish a piece on AIM. So it fell to a grassroots movement of local activists to bring AIM’s dangers to public attention. Its growing resistance to a pipeline that could precipitate just about anything up to a Fukushima-on-the-Hudson-style event evidently led Governor Cuomo to urge FERC to postpone construction until a safety review could be completed, a request that the agency rejected. In February, alarmed by reports of tritium leaking from the plant, the governor also directed the state’s departments of environmental conservation and health to investigate the likely duration and consequences of such a leak and its potential impacts on public health.
According to Paul Blanch, the risk of a pipeline explosion in proximity to Indian Point is one in 1,000, odds he believes are too high given what’s potentially at stake. (He considers a one-in-a-million chance acceptable.) “I’ve had over 45 years of nuclear experience and [experience in] safety issues. I have never seen [a situation] that essentially puts 20 million residents at risk, plus the entire economics of the United States by making a large area surrounding Indian Point uninhabitable for generations. I’m not an alarmist and haven’t been known as an alarmist, but the possibility of a gas line interacting with a plant could easily cause a Fukushima type of release.”
According to Blanch, attempts to regulate nuclear plants after a Fukushima- or Chernobyl-type catastrophe are known in the trade as “tombstone regulation.” Nobody, of course, should ever want to experience such a situation on the Hudson, or have America’s own mini-Hiroshima seven decades late, or find literal tombstones cropping up in the New York metropolitan area due to a nuclear disaster. One hope for preventing all of this and ensuring protection for New York’s citizenry: the continuing growth of impressive citizen pressure and increasing public alarm around both the pipeline and Indian Point. It gives new meaning to the phrase “power to the people.”
TomDispatch regular Ellen Cantarow reported on Israel and the West Bank from 1979 to 2009 for the Village Voice, Mother Jones, Inquiry, and Grand Street, among other publications. For the past five years she has been writing about the environmental ravages of the oil and gas industries.
Alison Rose Levy is a New York-based journalist who covers the nexus of health, science, the environment, and public policy. She has reported on fracking, pipelines, the Trans-Pacific Partnership, chemical pollution, and the health impacts of industrial activity for the Huffington Post, Alternet,Truthdig, and EcoWatch.
Copyright 2016 Ellen Cantarow and Alison Rose Levy