Fifty years ago, a secret deal among Arab governments triggered one of the most traumatic economic crises to afflict the United States and other big oil importers.

Saudi King Faisal and other Arab leaders launched an oil embargo on Oct. 17, 1973, as payback for Washington siding with Israel in its war with neighboring Egypt and Syria.

The oil market hostilities arose from a pact between Faisal and the leaders of Egypt and Syria, whose armies planned surprise drives to retake their territory under Israeli occupation. If the United States intervened to assist Israel, Faisal and other Arab producers agreed to retaliate with the “oil weapon.”

When Washington airlifted in U.S. weapons that helped Israel thwart Arab gains, Faisal and OPEC’s Arab members retaliated. They increased oil prices, banned oil shipments to the United States and cut production by 5% per month.

The ensuing economic and political carnage is legendary. The embargo catalyzed a long period of upheaval in global oil markets and pain at the gasoline pump for Americans and consumers globally. Oil prices quadrupled nearly overnight and remained high for over a decade. Producing countries leveraged the opportunity to reclaim sovereignty over their oil reserves. By 1980, many had completed the process of kicking Western oil companies out of their territories.

Oil’s global regime change

The embargo’s disruptive power was due to two key factors: OPEC’s dominance of world oil supply, and oil’s supremacy in the global energy mix.

Prior to the embargo, oil fueled almost half of total energy consumption in the United States (47.5%) and worldwide (49%). While OPEC countries produced more than half (53%) of global oil, the concessions were operated by Western oil majors.

After the embargo, producer states took over. Control of global oil production passed from Western oil giants like Shell and Exxon to newly formed national oil companies.

Men in suits sit at two rows of tables across from one another. Ahmed Zaki Yamani is looking into the camera.
Saudi oil minister Ahmed Zaki Yamani, second from left at the table, negotiated a deal that shifted control of Arabian American Oil Company from Exxon, Chevron, Mobil and Texaco to Saudi Arabia. Saudi Aramco is now the world’s largest oil producing company. AFP via Getty Images

As a result, a torrent of cash from oil sales poured into Middle Eastern countries where rudimentary services like electricity were still being built out. Oil revenues in Saudi Arabia jumped fortyfold between 1965 and 1975, from US$655 million to $26.7 billion. These countries also amassed new geopolitical power.

How the oil price spike played out in the West

In the West, price increases wreaked havoc on economies and transport systems that were far less efficient than today. Inflation soon boiled over into “stagflation,” a combination of economic stagnation and high inflation. Misguided policies, including gasoline price controls and rationing, exacerbated shortages, creating long lines at service stations and emboldening gasoline thieves.

A look back at the 1970s oil crisis.

America saw a pell-mell downsizing of gas-guzzling vehicles and a simultaneous ramping up of imports of fuel-efficient Japanese cars. Drivers obsessed over miles per gallon, and the U.S. government imposed corporate average fuel economy, or CAFE, standards, aimed at saving fuel by requiring automakers to sell more fuel-efficient cars.

Western oil companies, kicked out of the Middle East and other oil regions, pivoted to more difficult terrain: the offshore Gulf of Mexico and North Sea, and the Arctic regions of northern Alaska.

As scholars of energy policy, we have long studied the embargo’s spillover effects on the global economy and political systems. These outcomes are a central theme in Jim Krane’s 2019 book “Energy Kingdoms.” On the embargo’s 50th anniversary, Oct. 17, 2023, King Faisal’s son, the former Saudi Ambassador to Washington Prince Turki Al Faisal, is joining us for a conference at Rice University’s Baker Institute to discuss the still-valid lessons of the Arab oil embargo.

50 years later, new pressures

Fifty years on, markets have changed. But oil continues to be the world’s dominant energy source.

On one hand, crude oil use has grown dramatically. Global supply has risen from less than 60 million barrels per day in 1973 to nearly 94 million barrels per day in 2022. Motor fuel prices are still a critical input to inflation; we calculate that the increase in gasoline prices in 2022 cost the average American household roughly $1,000.

On the other hand, OPEC’s importance – and oil’s share of the global energy mix – has declined. OPEC’s 13 members account for just 36% of global oil production today. The high oil prices caused by the 1973 embargo created incentives for oil drillers to diversify toward new sources of oil and develop substitute fuels to replace oil.

Within 15 years of the embargo, production outside OPEC increased by a massive 14 million barrels per day. Oil from Alaska and the Gulf of Mexico helped stabilize U.S. production. Later, the shale revolution turned the United States into the world’s largest producer and a net exporter of oil, capping a 50-year quest.

The world has also become much more efficient, reducing the amount of oil needed to maintain the same activity. Global per-capita oil use per dollar of gross domestic product has fallen by a massive 60% since 1973, our calculations show.

But, as in 1973, energy security concerns are back at the top of national agendas.

Russia’s 2022 invasion of Ukraine reprised the risks of energy “weaponization.” Europe, in particular, has been hurt by overdependence on Russian natural gas and has raced to shift its energy sources. The Israel-Hamas war that began on Oct. 8, 2023, has not yet ignited retaliatory responses from Arab governments, and the initial impact on oil has been minimal, but geopolitical effects from such a large event could still roil markets.

Energy security itself is also being altered. The transition to renewable energy sources like wind and solar insulates consumers from most supply chain risks. Electric vehicles likewise protect owners from swinging oil prices. So, while crucial materials can still be manipulated by governments, shortages and price spikes mainly affect component manufacturers and their investors. If supplies are bottlenecked long enough, the energy transition could be delayed.

Aerial view in 2014 of the Houston Ship Channel and surrounding energy facilities in Houston.
The U.S. still imports more than 8 million barrels of petroleum per day, but since 2020, it has exported more than it has imported. More than one-third of U.S. crude oil exports go through the Houston Ship Channel. Carol M. Highsmith/U.S. State Department Bureau of Global Public Affairs, CC BY-NC

Like the embargo 50 years ago, today’s crises have rendered the future of energy massively uncertain. Changes in the global energy mix, especially the rapid growth of electric vehicles, could weaken the importance of oil and the cartel that oversees it.

As former Saudi oil minister Ahmed Zaki Yamani was reported to have said a quarter-century ago: “The Stone Age did not end for lack of stone, and the oil age will end long before the world runs out of oil.”

The Conversation

Jim Krane has received research funding from the government of Qatar and is affiliated with the Energy Policy Research Group at the University of Cambridge.

Mark Finley owns shares in bp. He has consulted for the King Abdullah Petroleum Studies and Research Center. He is also a member of the US Association for Energy Economics and the National Association for Business Economics.

Read more …Rising oil prices, surging inflation: The Arab embargo 50 years ago weaponized oil to inflict...

In 2022, California built an emergency drought barrier across the West False River near Oakley to protect against saltwater intrusion. AP Photo/Terry Chea

Seawater intrusion is the movement of saline water from the ocean or estuaries into freshwater systems. The seawater that has crept up the Mississippi River in the summer and early fall of 2023 is a reminder that coastal communities teeter in a fragile land-sea balance.

Fresh water is essential for drinking, irrigation and healthy ecosystems. When seawater moves inland, the salt it contains can wreak havoc on farmlands, ecosystems, lives and livelihoods.

I am a coastal hydrogeologist and have studied water across the land-sea interface for 25 years. I think of seawater intrusion as being like a seesaw: The place where fresh water and salt water meet is the balance point between forces from land and forces from the sea.

A push from the land side, such as heavy rainfall or high river flows, moves the balance point seaward. A push from the sea side – whether it’s sea-level rise, storm surge or high tides – moves the balance point landward. Droughts or heavy use of fresh water can also cause seawater to move inland. As climate change and population growth stress freshwater supplies, one result will be more seawater intrusion.

Graphic of a coastal aquifer.
Under natural conditions, fresh water flows underground toward the ocean and keeps seawater from moving into coastal aquifers. Pumping too much groundwater from the aquifer lowers water levels and can draw seawater inland. USGS

When the ocean moves upriver

The current seawater intrusion in the lower Mississippi River is due primarily to drought in the Midwest, which has reduced the river’s volume. Both the magnitude of reduction in river flow and the length of time that the river is low influence how far upriver the salt water moves. As of Oct. 2, 2023, the saltwater “wedge” in the Mississippi had moved nearly 70 miles upstream from the river’s mouth.

This isn’t the first time that low water on the river has allowed seawater to move inland. But as climate change raises sea levels and causes more severe weather anomalies, intrusion will become more common and will inch farther upstream.

And the problem isn’t unique to the Mississippi. In Delaware, seawater is traveling farther up small tidal streams during storms and the highest tides, flooding farmland and killing crops.

Researchers in Maryland explain how seawater intrusion threatens coastal agriculture.

In the Sundarbans of India and Bangladesh – one of the largest coastal mangrove forests in the world – seawater is intruding into the mouth of the Ganges River. The main causes there are upstream dams and water diversions from the river for irrigation and navigability, plus encroachment due to sea-level rise. Seawater intrusion could threaten many types of plants and animals in this UNESCO World Heritage Site, which is home to countless rare and endangered species.

Invading underground

Another interface between fresh water and salt water at the coast is less obvious because it’s underground. Many coastal communities draw their freshwater supply from groundwater – clean water that moves through pore spaces between grains of sand and soil.

Groundwater doesn’t just stop at the coastline: Under the ocean floor, the groundwater is salty, and somewhere between land and the ocean, there is an underground meeting point. It typically is landward of the coastline because salt water is denser than fresh water, so it has a greater force and naturally pushes in. But just as with a river, that interface moves when groundwater levels drop on land or water levels rise offshore.

In groundwater basins of central and southern California, widespread pumping has caused groundwater levels to drop hundreds of feet in some areas. This is tipping the seesaw and causing groundwater from the sea to move far inland. Accessible groundwater has supported irrigated agriculture in these areas, but now the double hazard of reduced groundwater availability and seawater intrusion threatens crops like strawberries and lettuce.

Seawater intrusion into groundwater is happening all over the world, but perhaps the most threatened places are communities on low-lying islands. Fresh groundwater is often the sole source of water for drinking and irrigation on small islands, and it exists in a thin lens that floats on top of saline groundwater.

The lens can shrink in response to droughts, pumping and sea-level rise. It can also become salty from floodwater infiltration during storms or high tides.

In the Marshall Islands, for example, a combination of sea-level rise and wave-driven flooding is predicted to make many islands uninhabitable by the end of the century.

A woman pours water from a box into her dog's dish
Kelli Marinovich fills her dog’s bowl with boxed water at her home in Buras, La., on Oct. 4, 2023. With salt water moving up the Mississippi River, thousands of Plaquemines Parish residents have been living on bottled water and dealing with saltwater intrusion for more than three months. Kathleen Flynn/Washington Post via Getty Images

Shifting the balance

As salt water continues to encroach on freshwater systems, there will be consequences. Drinking water that contains even 2% seawater can increase blood pressure and stress kidneys. If salt water gets into supply lines, it can corrode pipes and produce toxic disinfection by-products in water treatment plants.

Seawater intrusion reduces the life span of roads, bridges and other infrastructure. It has been implicated as a contributor to the Champlain Towers South condominium collapse in Surfside, Florida, in 2021. Seawater intrusion changes ecosystems, creating ghost forests as trees die and marshes move inland.

Smart management can tip the seesaw back toward the sea. Limiting surface water extraction and groundwater pumping, or injecting treated wastewater into vulnerable aquifers, can increase the force pushing against intruding salt water.

Constructing seawalls or maintaining healthy dune systems also can help hold seawater at bay, though these approaches protect only against saltwater flooding and infiltration at the surface, not underground. Pumping out saline groundwater or installing underground barriers can keep deeper salt water from moving inland.

Being proactive is best, because once groundwater is contaminated, it’s hard to remove the salt. If salt water does penetrate inland, communities can manage water quality by constructing desalination plants and switching to salt-tolerant crops.

Another option is to let nature take its course. Allowing marshes to migrate inland can compensate for losses at the coastline as sea level rises. This preserves critical habitats, enhances flood protection and stores carbon at rates far exceeding most terrestrial ecosystems – dialing back the acceleration of climate change.

The Conversation

Holly Michael receives funding from the US National Science Foundation, the US Geological Survey, and the US National Park Service.

Read more …What is seawater intrusion? A hydrogeologist explains the shifting balance between fresh and salt...

Seeking greenhorns with green thumbs. Steve Smith/Tetra Images via Getty Images

On Oct. 12, National Farmers’ Day, Americans honor the hardworking people who keep the world fed and clothed.

But the farming labor force has a problem: It’s aging rapidly.

The average American farmer is 57 and a half years old, according to the most recent data from the U.S. Department of Agriculture. That’s up sharply from 1978, when the figure was just a smidge over 50.

As researchers who study well-being in rural areas, we wanted to understand this trend and its implications. So we dug into the data.

Amber waves of graying

We found that the average age of farmers was fairly consistent across the country, even though the general population’s age varies quite a bit from place to place.

For example, the average Maine farmer is just a few months older than the average farmer in Utah, even though the average Maine resident is more than a decade older than the average Utahn.

To be fair, we did find some local differences. For example, in New York County – better known as Manhattan – the average farmer is just north of 31. Next door in Hudson County, New Jersey, the average farmer is more than 72.

On the whole, though, America’s farming workforce is getting older. If the country doesn’t recruit new farmers or adapt to having fewer, older ones, it could put the nation’s food supply at risk. Before panicking, though, it’s worth asking: Why is this happening?

A tough field to break into

To start, there are real barriers to entry for young people – at least those who weren’t born into multigenerational farming families. It takes money to buy the land, equipment and other stuff you need to run a farm, and younger people have less wealth than older ones.

Young people born into family farms may have fewer opportunities to take them over due to consolidation in agriculture. And those who do have the chance may not seize it, since they often report that rural life is more challenging than living in a city or suburb.

The overall stress of the agriculture industry is also a concern: Farmers are often at the mercy of weather, supply shortages, volatile markets and other factors entirely out of their control.

The ups and downs of farm life take center stage in “On the Farm,” a docuseries produced by Mississippi State University.

In addition to understanding why fewer younger people want to go into agriculture, it’s important to consider aging farmers’ needs. Without younger people to leave the work to, farmers are left with intense labor — physically and mentally – to accomplish, on top of the ordinary challenges of aging.

In other words, the U.S. needs to increase opportunities for younger farmers while also supporting farmers as they age.

Opportunities to help

The USDA already has programs to aid new farmers, as well as farmers of color and female farmers, and those who operate small farms. Expanding these programs’ reach and impact could help bring new talent into the field.

Congress could do just that when it reauthorizes the farm bill – a package of laws covering a wide range of food – and agriculture-related programs that get passed roughly every five years.

The farm bill also includes nutrition aid and funds telehealth and training and educational outreach for farmers, all of which could help meet the needs of young and aging farmers alike. Notably, the Cooperative Extension Service offers programs that range from 4-H and youth development, including introduction to agriculture, to providing on-site technical help.

Congress was supposed to reauthorize the farm bill by Sept. 30, 2023, but it missed that deadline. It now faces a new deadline of Dec. 31, but due to dysfunction in the House of Representatives, many expect the process to drag on into 2024.

Also in 2024, the USDA will release its next Census of Agriculture, giving researchers new insight into America’s farming workforce. We expect it will show that the average age of U.S. farmers has reached a new all-time high.

If you believe otherwise – well, we wouldn’t bet the farm.

The Conversation

David R. Buys receives funding from the Centers for Disease Control and Prevention, the United States Department of Agriculture National Institute of Food and Agriculture (NIFA), the Substance Abuse and Mental Health Services Administration, the Health Resources and Services Administration, and the National Institutes of Health.

As Director of the Southern Rural Development Center, one of the nation's four Regional Rural Development Centers (RRDCs) focused on enhancing capacity in research and Extension among Land-Grant Universities, John J. Green is involved in projects funded through the U.S. Department of Agriculture's National Institute of Food and Agriculture. Relevant to this topic are base funding support for RRDCs and the Agricultural and Food Research Initiative Competitive Program grant 2021-67023-34425 and his participation in the Rural Population Research Network (W5001). He also receives support as part of the Interdisciplinary Network on Rural Population Health and Aging funded by the National Institute on Aging grant R24-AG065159. The opinions expressed here are those of the authors and do not necessarily reflect the views of these funders.

As an Assistant Professor of Human Development and Family Science at Mississippi State University, Mary Nelson Robertson is involved in projects supported by United States Department of Agriculture (USDA) National Institute of Food and Agriculture (NIFA) Rural Health and Safety Education Grant No. 2020-46100-32841, Department of Health and Human Services Substance Abuse and Mental Health Services Administration Rural Opioids Technical Assistance (ROTA) Grant No. 5H79TI083275-02, and USDA NIFA Farm and Ranch Stress Assistance Network (FRSAN): Southern Region Grant No. 2020-70028-32730 from the University of Tennessee Extension Service, and USDA NIFA FRSAN: State Department of Agriculture Grant No. 2021-70035-35566 from Mississippi Department of Agriculture and Commerce.

Read more …America's farmers are getting older, and young people aren't rushing to join them

Marathon Petroleum Corporation's Los Angeles refinery, California's largest producer of gasoline. David McNew/Getty Images

Many of the world’s largest public and private companies will soon be required to track and report almost all of their greenhouse gas emissions if they do business in California – including emissions from their supply chains, business travel, employees’ commutes and the way customers use their products.

That means oil and gas companies like Chevron will likely have to account for emissions from vehicles that use their gasoline, and Apple will have to account for materials that go into iPhones.

It’s a huge leap from current federal and state reporting requirements, which require reporting of only certain emissions from companies’ direct operations. And it will have global ramifications.

California Gov. Gavin Newsom signed two new rules into law on Oct. 7, 2023. Under the new Climate Corporate Data Accountability Act, U.S.- companies with annual revenues of US$1 billion or more will have to report both their direct and indirect greenhouse gas emissions starting in 2026 and 2027. The California Chamber of Commerce opposed the regulation, arguing it would increase companies’ costs. But more than a dozen major corporations endorsed the rule, including Microsoft, Apple, Salesforce and Patagonia.

The second law, the Climate-Related Financial Risk Act, requires companies generating $500 million or more to report their financial risks related to climate change and their plans for risk mitigation.

As a professor of economics and public policy, I study corporate environmental behavior and public policy, including whether disclosure laws like these work to reduce emissions. I believe California’s new rules represent a significant step toward mainstreaming corporate climate disclosures and potentially meaningful corporate climate actions.

Many big corporations are already reporting

Most of the companies covered by California’s climate disclosure rules are multinational corporations. They include technology companies such as Apple, Google and Microsoft; giant retailers like Walmart and Costco; and oil and gas companies such as ExxonMobil and Chevron.

Many of these large corporations have been preparing for mandatory disclosure rules for several years.

Close to two-thirds of the companies listed in the S&P 500 index voluntarily report to CDP, formerly called the Carbon Disclosure Project. CDP is a nonprofit that surveys companies on behalf of institutional investors about their carbon management and plans to reduce carbon emissions.

Apple CEO Tim Cook stands under a giant glittery Apple logo on a black background.
Apple has been working with its suppliers for several years to reduce their emissions. Justin Sullivan/Getty Images

Many of them also face reporting requirements elsewhere, including in the European Union, the United Kingdom, New Zealand, Singapore and cities like Hong Kong.

Moreover, some of the same U.S. companies, notably banks and asset managers that operate or sell products in Europe, have already started to comply with the EU’s Sustainable Finance Disclosure Regulation. Those regulations require companies to report how sustainability risks are integrated into investment decision-making.

While California isn’t the first place to mandate climate disclosures, it is the fifth-largest economy in the world. So, the state’s new laws are poised to have substantial influence worldwide. Subsidiaries of companies that didn’t have to report their emissions before will now be subject to disclosure requirements. California is in effect exercising its immense market leverage to establish climate disclosures as standard practice in the U.S. and beyond.

California also has a history of being a test bed for future federal U.S. policies. The U.S. government is considering broader emissions reporting requirements. But California’s new rules go further than either the U.S. Securities and Exchange Commission’s proposed corporate climate disclosure rules or President Joe Biden’s proposed disclosure rules for federal contractors.

A chart shows the differences between California's new climate disclosure laws and carbon disclosure and reporting proposals by the SEC and Biden Administration.

The most controversial part of the new disclosure rules involves scope 3 emissions. These are emissions from a company’s suppliers and its consumers’ use of its products, and they are notoriously difficult to track accurately.

California’s new emissions reporting law directs the California Air Resources Board, which will develop the regulations and administer them, to allow some leeway in scope 3 reporting as long as the reports are made with a reasonable basis and disclosed in good faith. It’s also important to note that at this point the disclosure laws don’t require companies to cut these emissions, only to report them. But tracking scope 3 emissions does highlight where companies could pressure suppliers to make changes.

What can disclosures achieve?

The plethora of climate disclosure mandates globally suggest that policymakers and investors around the world perceive climate disclosures as driving actions that protect the environment. The big question is: Do disclosure rules actually work to reduce emissions?

My research shows that voluntary carbon disclosure systems like CDP’s that focus on reporting corporate sustainability outputs, such as having science-based emissions targets, tend not to be as effective as those that focus on outcomes, such as a company’s actual carbon emissions.

For example, a company could earn an A or B grade from CDP and still increase its entitywide carbon emissions, notably when it does not face regulatory pressure.

In contrast, a recent study of the U.K.’s 2013 disclosure mandate for U.K.-incorporated listed firms found that companies reduced their operational emissions by about 8% relative to a control group, with no significant changes to their profitability. When companies report their emissions, they can gain important knowledge about inefficiencies in their operations and supply chains that weren’t evident before.

Ultimately, a well-designed disclosure program, whether voluntary or mandatory, needs to focus on consistency, comparability and accountability. Those traits allow companies to demonstrate that their climate pledges and actions are real and not just a front for greenwashing.

The Conversation

Lily Hsueh does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Read more …Exxon, Apple and other corporate giants will have to disclose all their emissions under...

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