The role of corporate oil and energy debt in creating the neoliberal era

Abstract

This article examines the relationship between the United States's rapid loss of energy sovereignty in the 1970s and the rise of speculative finance and neoliberal ideology that reshaped global trade relationships. Prevailing academic analysis of the neoliberal economy understates the tight relationship between the U.S. corporate state's influence over oil markets and persistent U.S. global hegemony since the 1973 energy crisis. During the Keynesian era, U.S. power was backed by actual geopolitical control over oil production, but after the 1970s, the influence of the so‐called Washington Consensus enforcing neoliberal policies derived in large part from leverage over international “energy debt” that propped up the U.S. dollar, allowing continued capital accumulation by banks and corporations via financial speculation, while disguising global energy risk. The article thus examines the roles of major U.S. oil companies in shaping neoliberal policies from which they benefited, the relationship of militarism to oil company profit, and the essential role of speculative debt financing in permitting otherwise uneconomic production of fossil fuels with low “energy return on investment” in the new era of climate change and resource limits.