Beyond the environment, one of the most persuasive arguments for reducing western nations’ dependence on fossil fuels is the extraordinary power that our current arrangements give to authoritarian and aggressive regimes.
How many times have noble sentiments from British and allied politicians about human rights and the international order been undermined by the need to cosy up to Saudi Arabia? How much western treasure has, indirectly and despite sanctions, been poured into Vladimir Putin’s war machine?
In contrast, those governments have no such gap between their economic and geopolitical positions. Ever since forming the Organisation of Petroleum Exporting Countries (Opec) in 1960, the likes of Saudi Arabia and Iran – as well as countries like Russia in the wider grouping of Opec+ – have been able to wield immense influence on the world stage.
Why have Riyadh and Moscow been able to deploy their natural resources so much more effectively than Washington and Ontario?
Today, there can be little argument that this influence is being used against us. Despite the war in Ukraine and the global inflationary pressures it has unleashed, Opec governments have repeatedly coordinated to slash production and push up oil prices.
This has kept the price of oil at a point where Russian exports remain sufficiently profitable to bankroll its military operations, and increased the cost-of-living pressures on western voters which, the Kremlin hopes, will eventually sap their governments’ commitment to Kyiv.
Yet in letting this group wield such power, the West has missed a trick. After all, when you look at total oil production, including crude oil, all other petroleum liquids, and biofuels, the world’s largest producer is actually the United States. In 2022, it pumped out over 20 million barrels day, versus just 12 million by Saudi Arabia and 11 million by Russia. And the world’s fourth-largest producer? Canada, at 5.7 million barrels a day.
So why have Riyadh and Moscow been able to deploy their natural resources so much more effectively than Washington and Ontario? In a word: coordination. It’s time that Western nations counter-organised. It’s time for Nopec.
If America and Canada worked together to raise their combined output by several million barrels a day, it would go a long way towards tackling the authoritarian axis propped up by Opec. Prices would fall for consumers, there would be more opportunities for striking deals with fuel-hungry nations, and Russia’s creaking war economy would come under renewed, perhaps intolerable pressure.
Such action would not be sufficient on its own. Unlike autocracies like Saudi Arabia, American and Canadian industries are privately owned; they cannot dramatically raise or cut production overnight on the orders of the government.
Our democratic systems also pose other barriers to any major increase in production. Exploration and development of new wells needs democratic consent, and face fierce opposition from green campaigners. Vital infrastructure, such as refineries and terminals for export, can likewise be delayed or even blocked by local opposition. That Canada has so far failed to hit the increased production targets it promised after the Russian invasion of Ukraine shows how difficult it will be to compete with countries where the state’s command is law.
Nor can we ignore the fact that Opec’s power does not arise from Saudi Arabia and Russia alone (indeed, the latter is not formally a member), but from providing leadership and coordination to a much larger group of exporters, from Opec members, such as Iran, to allies such as Brazil.
But this need not be the case. For starters, other western nations with significant oil and natural gas reserves should be part of any ‘Nopec’ alliance. The most obvious candidates are Norway and the United Kingdom, both Nato members with a direct interest both in increasing returns on their exports and in defending European and global security.
This would, however, pose hard questions to British politicians and voters, who have often preferred offshoring this country’s carbon footprint by relying on imports to facing up to our requirements and responsibilities and developing our own natural resources.
Rishi Sunak’s recent announcement of a more realistic approach to net zero, and the government’s authorising a tranche of new North Sea oil and gas licences, is a welcome step. But will ministers ever be prepared to let business exploit this country’s huge shale gas reserves – the one step which could make the UK a real player on the global energy stage?
Natural gas is also an obvious plank for Nopec; five of the top ten global producers (US, Qatar, Canada, Australia, and Norway) are allied or friendly nations. We should also make a more concerted push to exploit existing fractures in the Opec alliance. As I have written previously, the 24-member Opec+ is a fractious, often tenuous group, with several current or former members who could be wooed by a revivified western alliance. Qatar and Oman, Britain’s closest allies in the Gulf, for instance, have ended up in opposing camps on Opec.
Qatar left Opec in 2019 following the Saudi-led blockade of their country. It has since been both willing and able to broker deals with several western powers, including Germany and the UK, to supply liquified natural gas (LNG) as they diversify away from Russian gas, supplying 30 per cent of Britain’s LNG in 2022.
Meanwhile Oman, which has remained a member of Opec+, might be persuaded to follow suit; Britain has long-standing historic security and intelligence-sharing ties with its Royal Family, a soft-power asset London should not hesitate to exploit.
Then there’s Kuwait, one of only two Gulf nations standing foursquare behind Ukraine – unsurprising, perhaps, given its own history of invasion by a militarist neighbour and the vital role Nato played in preserving its independence. It’s firm commitment to smaller nations’ territorial integrity is now deeply at odds with Opec’s policies.
Such overtures need not, and should not, be based on high-minded appeals to our values. Access to western markets can be a powerful draw. Algeria, for instance, has not allowed Opec membership to prevent it signing a series of major gas deals with Italy; could it be drawn out of the alliance altogether?
Western nations have a huge number of advantages, both moral and material, over the world’s autocracies. But to date, we have allowed them to steal the march on us organisationally and undermine our interests and values in the process. We have the means to fight back. Now we need the will.
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