Can we see beginnings of state failure in US and Europe?

Published: 24 January 2017 at 16:00

Oil production in progress with fire blasting out the top of a rig

Study highlights potentially catastrophic outcomes in new era of energy decline

The United States and Europe face an increasing risk of state failure in coming years due to the escalation of interlinked environmental, energy and economic crises.

The warning is set out in Failing States, Collapsing Systems: BioPhysical Triggers of Political Violence, authored by Dr Nafeez Ahmed, a Visiting Fellow at Anglia Ruskin University’s Global Sustainability Institute, and published by Springer Briefs in Energy.

The study pinpoints net energy decline – a decline in energy return from the global investment in energy production and exploration when energy companies are forced to exploit lower quality, higher cost resources – as a primary factor in the vulnerability of the global financial system to crisis. 

The total value of energy produced via fossil fuel extraction has plummeted by more than half in recent decades, and continues to decline – the fracking ‘revolution’ being a symptom of this problem.  Net energy decline is leading to decreased revenues for oil producers while driving accelerated fossil fuel production, which is directly linked to increased climate-induced agricultural and water crises.

The study concludes that states can begin to fail within 15 years of a country’s main sources of energy and economic revenue becoming jeopardised.

Those factors have led countries in the Middle East and Africa – such as Syria, Iraq, Yemen, Egypt and Nigeria – to become failing states, experiencing prolonged domestic unrest, civil war and terrorism. Within the next decades, similar impacts could hit closer to home.

By 2030, all the world’s major economies will have undergone irreversible declines in their domestic oil, gas and coal production, further increasing their reliance on imports.  After 2030, even the world’s largest oil exporters in the Middle East will face energy shortages of their own, creating scarcity in global markets.

This energy shock would coincide with intensifying climate change impacts across the Middle East and North Africa making the region increasingly uninhabitable, and driving a large number of refugees toward the US and Europe. 

At the same time, the US, Europe, China and the Middle East will all face major domestic agricultural crises due to climate impacts.  The heightened strain to national economies is likely to trigger concerted outbreaks of civil unrest in the US and Europe.

While some of these outcomes are unavoidable, their worst effects can still be mitigated – although this requires serious alternatives to business as usual.

Key findings of the study include:

  • Global net energy decline is the underlying cause of the decline in the rate of global economic growth.  In the short term, slow or absent growth in Europe and the US is complicit in voter discontent and the success of anti-establishment politicians. 
  • Europe is now a post-peak oil society, with its domestic oil production declining every year since 1999 by 6%.  Shale oil and gas is unlikely to offset this decline. 
  • Europe’s main sources of oil imports are in decline. Former Soviet Union producers, their production already in the negative, are likely to terminate exports by 2030.  Russia’s oil production is plateauing and likely to decline after 2030 at the latest. 
  • In the US, conventional oil has already peaked and is in sharp decline.  The shortfall is being made up by unconventional sources such as tight oil and shale gas, which are likely to peak by 2025. California will continue to experience extensive drought over the coming decades, permanently damaging US agriculture.
  • Between 2020 and 2035, the US and Mexico could experience unprecedented military tensions as the latter rapidly runs down its conventional oil reserves, which peaked in 2006. By 2020, its exports will revert to zero, decimating Mexican state revenues and potentially provoking state failure shortly thereafter.
  • After 2025, Iraq is unlikely to survive as a single state.  The country is experiencing worsening water scarcity, fuelling an ongoing agricultural crisis, while its oil production is plateauing due to a combination of mounting costs of production and geopolitical factors.
  • Saudi Arabia will face a ‘perfect storm’ of energy, food and economic shocks most likely before 2030, and certainly within the next 20 years.
  • Egypt will begin to experience further outbreaks of civil unrest leading to escalating state failure after 2021.  Egypt will likely become a fully failed state after 2037.
  • India’s hopes to become a major economic player will falter due to looming food, water and energy crises.  India’s maximum potential domestic renewable energy capacity is insufficient to meet projected demand growth.
  • China’s total oil production is likely to peak in 2020.  Its rate of economic growth is expected to fall continuously in coming decades, while climate change will damage its domestic agriculture, forcing it to rely increasingly on expensive imports by 2022.

Author Dr Nafeez Ahmed, a Visiting Fellow at Anglia Ruskin University’s Global Sustainability Institute, said:

“Syria and Yemen demonstrate how climate and energy crises work together to undermine state power and fuel terrorism. 

“Climate-induced droughts ravage agriculture, swell the ranks of the unemployed and destroy livelihoods.  Domestic oil depletion undercuts state revenues, weakening the capacity to sustain domestic subsidies for fuel and food.  As the state is unable to cope with the needs of an increasingly impoverished population, this leads to civil unrest and possibly radicalisation and terrorism. 

“These underlying processes are not isolated to Syria and Yemen.  Without a change of course, the danger is that eventually they will occur inside the US and Europe.”