The European: The European Union has been awarded the Nobel Peace Prize. Is the honor well-deserved?
Ganser: No. I was very irritated by the decision. Alfred Nobel explicitly formulated the criteria for the prize in his last will, stating that it should be awarded to the person who has done the most in the preceding year to bring about peace. I just re-read that passage: The aim of the prize is to show that a single individual can indeed make a difference. That is important, because many people feel powerless and think that one person can’t contribute to world peace anyways. But that’s evidently wrong. Recipients like the Dalai Lama or Dag Hammarskjöld are great role models. The EU isn’t, because you cannot identify with it on a personal level: It’s a bureaucratic union, not a charismatic individual. Power is concentrated at the top, away from the citizens who lack almost any say in decisions about the transfer of billions of Euros between different countries and interest groups. It’s true that the EU contributed to peace after World War II, especially peace between Germany and France, and that’s a valuable legacy – but it’s insufficient for the Nobel Peace Prize. Because it’s also true that Great Britain invaded Iraq in 2003, that France bombed Libya in 2011, and that Germany, Italy, Denmark and other European countries deployed troops to Afghanistan. The CIA maintained secret prisons on European soil in cooperation with different European intelligence agencies. We rarely talk about those chapters of our recent history! 2009, the Nobel Peace Prize was awarded to Barack Obama, which was equally irritating, since Obama was presiding over a war in Afghanistan.
The European: Europe’s problem today seems to be the precariousness of social peace rather than inter-state peace. Can we at least deduce certain calls to action from the Nobel prize?
Ganser: I think the hope of the Nobel Committee was to maintain peace in Europe. The prize was awarded just a few days after Angela Merkel visited Athens, where it was evident that tensions run high. 7000 cops had to protect Merkel from angry protesters. Many people recognize that the power of nation-states is shrinking within the EU. The common currency means that the Greeks, for example, cannot simply devalue their currency. I’m from Switzerland, and I’m somewhat critical of the EU because it doesn’t include direct democracy and instead vests power in international bureaucrats like Mario Draghi, the head of the ECB. The fiscal union that is now under consideration would strip national parliaments of their authority over fiscal and economic policy. It would be the capitulation of national parliaments.
The European: You also warn against the danger of high oil prices. Why are you worried?
Ganser: First, we should remember that a barrel of oil used to cost much less in the 1950s and 1960s than it does today: Two dollar or less per barrel. It was almost free, and the expansion of the car industry – for example – was based on the premise of cheap oil. Now we’re facing a situation where the price of oil has fluctuated tremendously between 2000 and 2012: From ten dollars to 140 dollars, down to 40, and back up to 100. We know that a high oil price can lead to an economic recession.
The European: How can we make sense not only of the drastic rise in oil prices, but also of the fluctuations?
Ganser: Two things caused the fluctuations. First, the so-called “fundamentals”, like a shifting balance between supply and demand. The two biggest oil producers in Europe, Norway and Great Britain, have reached their peak and now drill less oil every year. The same is true for Mexico and Indonesia. In the US, annual oil production varies, but it won’t ever be as high again as it was in 1970. The supply is drying up. The newest solution is to drill from the deep ocean or from oil sand. Shell has announced to exploit oil reserves in the Arctic. The trend is clear: We must drill from sites that are harder to reach and more expensive. The second cause is the loss of value of the US dollar. When the dollar drops, oil producers for example from Saudi Arabia will demand higher dollar prices per barrel.
The European: Several recent studies about global food prices concluded that a significant percentage of the rise and fluctuation of commodity prices was driven by speculation, not by supply and demand. Does the oil market exhibit a similar trend?
Ganser: Speculation is always a factor, but I’m opposed to saying, “If only the speculators would go away, we’d be back to a price of two dollars per barrel.” Speculation merely intensifies a pre-existing problem: We’re using 88 million barrels of oil per day and refuse to acknowledge that oil is a scarce resource. It’s easy to attack speculators and say that we’re not responsible ourselves and might as well carry on as before. I believe that we consumers must reduce our oil use. We won’t ever get the low 1950s prices back.
The European: Is there a threshold price that cannot be topped without severe economic problems?
Ganser: We used to think that the oil price could climb to 300 dollar or even to 400. I don’t agree. Maybe the limit is 150 dollars, or maybe it’s 200. But anything above that price will drive us into a recession. When the economic situation worsens, demand will temporarily drop and ease the pressure a little bit. But as soon as growth kicks back in, the squeeze returns. We should be ready for several years of up-and-down oil prices, or we might already be in the midst of it.
The European: Can nuclear energy be an alternative?
Ganser: Not for me. All non-renewable energy sources have serious problems; in the case of nuclear energy, the problem is safety. We outsource the costs of potential catastrophes to future generations. If you actually insured nuclear power plants against the risk of a radiation leak, nuclear power would be much more expensive. Coal isn’t an alternative because of climate change. Natural gas can be used as a bridge during the transition to renewables, but gas pipelines are relatively vulnerable and can easily be turned into political pawns. In the end, we simply have to be more determined about transitioning our energy supply to renewables.
The European: Germany opted out of nuclear power after Fukushima, but the transition has hit major obstacles. Electricity is becoming more expensive, and the reconfiguration of the grid is proceeding more slowly than expected.
Ganser: It’s still a step in the right direction. Every country pursues its own approach to energy questions. In Greece, for example, the people have started to chop down forests because the government raised the tax on oil. In Saudi Arabia, oil is massively subsidized to prevent popular unrest, and it’s leading to rising oil consumption. Germany has invested in wind and solar and geothermal power. A country that pursues energy transition increases its independence and supports an industry that will be globally competitive.
The European: You mentioned independence. In the US, politicians have begun linking energy policy quite explicitly to energy independence and foreign policy.
Ganser: The US isn’t independent at all, despite what you can read in the media. The country needs 19 million barrels of oil per day but only produces six million barrels domestically. It doesn’t matter whether the president’s name is Obama or Romney: The US remains dependent on oil imports. That’s a problem for all major powers: The US needs 19 million barrels per day, the EU needs 15 million, the Chinese and Japanese are also reliant on oil imports. The fight for oil is heating up.
The European: Where do you see the biggest potential for conflict: In the fight for oil, the fight against the consequences of climate change, or the fight for access to clean water and food?
Ganser: Those problems are often intertwined. Over the course of the last two centuries, the world’s population grew from one billion to seven billion. At the same time we got used to the idea that energy was cheap and ubiquitous. We almost consider energy a human right! But for most of human history, energy was scarce. Two options exist: We can simply carry on and accept the consequences of climate change, of another Fukushima, or of an economic recession – that’s possible as long as we’re willing to bear the consequences. But I believe that our vision for the 21st century should rather be to combine the peaceful resolution of conflicts and the quest for renewable energies. Ultimately, we want a system that ensures our survival. The system of the 20th century is currently breaking apart.
The European: You recently wrote that the Iraq war was “evidently a haul for oil”. Do you believe in mono-causal explanations?
Ganser: Conflicts are never mono-causal. But if Iraq’s main export had been broccoli, the same war of aggression would not have happened. The two main Western parties – the US and Great Britain – both suffer from energy scarcity, and the former US vice president Dick Cheney once made it explicit that he believed that the 21st century would be dominated by the countries that controlled energy sources. Europeans never quite understood that the US wanted to secure the oil fields of the Middle East ahead of the Chinese and Europe.
The European: So all the talk about democratization and national security is… what? A big scam?
Ganser: We’ve all heard the narrative that the war in Afghanistan was necessary to hunt down Osama Bin Laden, or that we had to intervene in Libya to uphold human rights, or that Iraq had produced weapons of mass destruction. But we never talk about resource wars. No politician is willing to stand up and say, “We’re engaged in resource wars. They are the price we have to pay for our dependency on the Black Gold.” I am hoping for a more honest discussion. Most people would then agree that we must re-think our energy policy. Transitioning to renewables isn’t only about building profitable solar panels but also about the question of whether we want to continue to fight wars over energy resources or not.
The European: You argue that the market is usually “a peaceful and secure market” and that transnational corporations are an important part of peace-building activities. Do you trust private companies more than you trust governments?
Ganser: I don’t generally trust them more. You’ll always find honest actors and those who are in for quick money and big power, and who are willing to sell their own grandmother if necessary. We have to look at specific companies and ask whether they support energy transition or whether they have an interest – like Exxon Mobil – to be granted access to Iraq’s oil fields by the Pentagon. The latter is not conducive to peace.
The European: International law is poorly suited to hold private companies accountable. We’re often forced to rely on self-governance and voluntary commitments. Do you think that the legal framework is still adequate in the 21st century?
Ganser: International law only catches the small offenders. The big ones simply tear through the net. The Iraq war was a war of aggression and a violation of international law. Ever since Hitler’s invasion of Poland in 1939, wars of aggression are considered grave crimes and I don’t see why the US and Great Britain should be allowed to attack Iraq without a UN mandate. International law was useless in this instance, and now more than 100,000 people have died in Iraq. Or take Libya: A UN mandate did exist, but it was for a No-Fly-Zone. The British and the French and the Americans turned it into a mandate for regime change – that was clearly illegal. The fight for resources is so heated that international law gets ignored.
The European: Let me play devil’s advocate: We value human rights, and we value secure access to energy sources. And rather than giving up on those, politicians use whatever leverage they have, even if the solution is not a peaceful one. Is there a realistic alternative to that scenario?
Ganser: We need an open dialogue about resource wars. Where are they being fought, how are we implicated as consumers, and what are the alternatives? I have argued for several years that resource wars are a reality, and now more people are embracing that view. The next step would be to consider investing the Pentagon’s 700 billion dollar budget into renewable energies. We would be able to create an affordable, sustainable and decentralized energy supply almost immediately. We know how geothermal energy works. We know what it takes to build cars with better mileage. We know how to insulate homes or how to put solar panels on the roof. The question is whether we have the guts to redirect the flow of money and to finance energy transition instead of energy wars.
The European: The guts, and the political clout. Many actors profit immensely from high defense budgets or from our dependence on oil and gas.
Ganser: I recently sat on a discussion panel with Peter Voser, the head of Shell. The moderator mentioned that Shell reported a profit of seven billion dollars last year, and Voser cleared his throat and mentioned that the seven billion were quarterly earnings. You see: We’re talking about incredible amounts of money! We’re faced with the choice between keeping all that money in the defense and coal and oil sectors – and then we’d have to tolerate the exacerbation of our problems – and the redirection of money flows. Opposition to the latter option will be fierce.
The European: We’ve talked a lot about politics and politicians – but what can scientists contribute to those discussions?
Ganser: Science says: If we continue to rely on coal, oil, natural gas and nuclear power in the 21st century, we will pay dearly for it. If we fail to solve the resource problem, the whole system will become destabilized. NGOs make a similar argument, by the way. But some private companies have started to echo the message as well. Their argument: “We can turn your house into a low-energy building. It’ll cost you, but it’ll be worth it.” Many managers have an incentive to support energy transition, so there’s a split across the private sectors: Some companies support renewables and some companies oppose them. Politics is similarly divided: Politicians who represent the interests of the defense industry or of oil companies argue against shaking things up. And others say that we’ll be able to create new jobs and that we must free ourselves from the shackles of oil imports. That’s out of concern for national security questions, too.
The European: Your argument seems to be based on economic arguments and on the creation of incentives. But what about a moral commitment to resolve conflicts peacefully even if it is economically disadvantageous to big players?
Ganser: Of course moral arguments play a role. I wouldn’t recommend to my children that we should solve conflicts by killing people and seizing the assets we want. It would be good if politicians adhered to this moral principle and defended it publicly. Resource wars only create new problems: Our oil supplies are dwindling and our dependency remains high. Resource wars only influence who controls the access to a scare resource. We see tensions between the Philippines and China, between the British and the French in Libya, conflicts in Sudan – and we might ask as well, for example, what has driven countries like Germany into Afghanistan and why exactly they want to build a pipeline from the Caspian Sea to the Indian Ocean. We must turn this into a public discussion, and that is what I’m hoping to do with my new book.
Translated from German. Daniele Ganser’s current book Europa im Erdölrausch was published in 2012.