Oil DA - Michigan 2024 BFHR

Oil DA
1NC
1NC---Shell [Russia]
Rising prices now but we still need to be careful.
Reuters 7/22 [Reuters is one of the largest and most trusted news agencies in the world; 07/22/2024; “Oil prices rise as investors look for signs US rate cuts to begin,” The Economic Times; https://economictimes.indiatimes.com/markets/commodities/news/oil-prices-rise-as-investors-look-for-signs-us-rate-cuts-to-begin/articleshow/111913557.cms] iman
Oil prices rose in early trade on Monday as investors keep a lookout for signs of a rate-cut cycle expected to begin as soon as September. Brent crude prices were up 48 cents, or 0.57%, at $83.10 a barrel by 0035 GMT, and U.S. West Texas Intermediate crude futures rose 42 cents, or 0.52%, to $80.55. "Since the June FOMC meeting, inflation and labour market data have signalled that disinflation and labour market rebalancing are in place, which we expect will allow the Fed to begin its interest rate cutting cycle in September," ANZ Research said in a note. The U.S. Federal Reserve will next hold a Federal Open Market Committee (FOMC) meeting on interest rates on July 30-31, at which investors expect the Fed to keep the rates unchanged, while looking for any signal of a cut coming later in the year. On the political front, U.S. President Joe Biden abandoned his reelection bid on Sunday under pressure from fellow Democrats and endorsed Vice President Kamala Harris as the party's candidate to face Republican Donald Trump in November. Slower-than-expected economic growth of 4.7% for China in the second quarter sparked concerns last week over the country's demand for oil and continues to weigh on prices.
A shift to renewables creates destabilization of oil prices which collapses stability of many countries.
Blaine 21 [Tegan; a director of climate, environment & conflict at the U.S. Institute of Peace; 06/21/2021; “Can the World Go Green Without Destabilizing Oil-Pumping Nations?”; USIP; https://www.usip.org/publications/2021/06/can-world-go-green-without-destabilizing-oil-pumping-nations]
Amid the dizzying acceleration of headlines and debate about the vital global transition to renewable energy, new research shows how that change could destabilize dozens of fragile states that depend heavily on oil exports. The new study underscores that governments and international institutions will need to guard against risks that the shift away from carbon-heavy fuels will inadvertently upset political balances and potentially ignite violent conflicts in a swath of nations from Venezuela to Nigeria to Iraq and beyond. Above all, the research suggests, the world must avoid an unplanned “traumatic decarbonization” of these economies.
The U.S. recommitment to the Paris climate accords — plus summit conferences called by the Biden administration, the G7 nations and NATO — reflect the reality that countries are moving to cut their oil consumption in hope of constraining the planet’s warming. Politicians in the world’s more comfortably developed nations focus on managing this transition to serve their own economies and polities, meeting costs and generating jobs, with an eye toward winning the next election.
Where Oil Buys Stability
Yet fragile states that produce a large share of the world’s oil face a different, more acute problem set. Their leaders, rarely confronted with true electoral challenges, pursue political survival instead by cutting deals among contentious and often violent elite factions. The deals typically involve material benefits linked to the cash from oil exports. When these countries face a sudden cutoff of their cash flow, leaders must either bargain — or battle — for slices of a smaller pie.
A challenge for U.S. and allied policymakers is that a greening of the global economy creates new risks for violence on a global scale. Violent conflict already has been rising for a decade, driven by spikes in civil unrest and again this month resetting the record for human displacement — now 82.4 million people worldwide. And we know already that a transition to renewable and other low-carbon energy sources will risk igniting unintended conflicts around the mining of minerals that will be essential to green technologies. The new research, still being synthesized, suggests that closing the planet’s oil spigot will generate simultaneous new risks in dozens of countries whose collective population will be counted in the billions.
In fragile states, governance institutions are weak. Rather than functioning under the rule of law, politics centers on transactional bargains among rival members of the elite. How the bargains operate varies from country to country. The specific mechanisms may be legal or illegal under national laws. There may be overt corruption, cronyism or structural oligarchies, a combination of all three, or other less detectable tactics. A common feature, however, is that the oil sector is typically controlled, entirely or overwhelmingly, by the members of the elite who hold the levers of state power. No matter the mechanism, oil money is central to elite deals with implications for stability.
The connection between oil prices and peacemaking in oil-dependent countries is visible in data. Since 1990, the new research finds, high oil prices accompany broader, stronger peacemaking processes in such countries. Higher oil revenues in the 2000s funded “big-tent” patronage politics in which rivals have greater incentive to cooperate for a slice of the cash pie. Leaders can spread around oil-derived cash to pay off foes and keep allies loyal. When oil prices slumped in the 2010s, peace agreements became thinner — often merely cease-fire accords. The lack of cash to pay off factions left rival groups more often to chase their goals through unstable, shorter-term deals, or simply by continuing armed conflict, which itself is often part of the bargaining process.
The transition to the global green economy will not simply unleash power struggles over existing resources in oil-pumping fragile states. It also will push those countries’ elites to seek new revenues. The new research suggests that the scrambles for alternate income streams — ranging from legally obtained natural resources to illicit activities — will create further, specific risks. An example: When Sudan lost oil income after the secession of South Sudan, Sudanese leaders found replacement incomes partly by renting their mercenary forces to Middle Eastern states that used them in the wars in Libya and Yemen.
Lowering oil prices below sixty dollars exhausts Russia’s National Wealth Fund.
Alexandra Prokopenko 24, fellow at the Carnegie Russia Eurasia Center, visiting fellow at the German Council on Foreign Relations, 4/10/2024, "Is the Kremlin Overconfident About Russia’s Economic Stability?" Carnegie Endowment for International Peace, https://carnegieendowment.org/research/2024/03/is-the-kremlin-overconfident-about-russias-economic-stability, christian
NWF = National Wealth Fund
No Shortage of Money
Of course, the Russian economy is hardly impervious to the effects of G7 sanctions. Despite a 25 percent increase in 2023 in non-oil and gas revenues, the Russian state budget has become even more dependent on energy exports.12 In the event of a global recession that crimps energy prices, or if Western sanctions on the Russian oil and gas sector are tightened, Russia’s state finances will feel the crunch. This is well understood in the Kremlin, which has voluntarily cut production in line with the decisions of the OPEC-Plus arrangement that it co-leads with Saudi Arabia and changed the way it calculates oil taxation.13 The goal is to stabilize oil and gas revenues and to avoid any sudden decreases in the sector’s tax payments.
It is far from clear that Western sanctions on the Russian energy sector are delivering the kind of blow U.S. Deputy Treasury Secretary Wally Adeyemo had in mind when he said that they are designed to “reduce the revenues the Kremlin has to fuel its war of choice.”14 Even though U.S. President Joe Biden’s administration deliberately devised the oil price cap mechanism to take Russian oil off international markets, the uncomfortable reality is that Moscow has generally learned to circumvent the restrictions, as was widely anticipated.15 The Russian Finance Ministry currently predicts that in 2024 oil and gas revenues will increase to 11.5 trillion rubles ($124 billion), a 30 percent increase from the year before.16
Such a forecast may be optimistic, but it appears realistic. Sanctions have created an $11 billion annual market for “gray” shipping companies, which now transport 45 percent of exports of Russian crude and refined products.17 Meanwhile, Russia’s total export earnings have hit a ceiling. Non-oil and gas exports also face problems. Even if external demand for Russian exports (of any kind) somehow materializes, the Russian economy will struggle to meet it, as it is operating close to capacity.18
As the war in Ukraine rages on, state spending has grown. In 2022 and 2023, the government was able to both spend on the war and to maintain the economy with budget money injections, having saved enough during the better years to cover the budget deficit.19 As of the beginning of 2022, Russia’s rainy day fund, the National Wealth Fund (NWF), held $210 billion. By January 2024, its reserves stood at $130 billion, certainly enough to cover expenditures for 2024.
The Finance Ministry has promised to reduce Russia’s deficit to zero in 2025, but few knowledgeable observers place much faith in such pronouncements. After all, spending has grown, and the government has suspended the budget rule by which Russia sells foreign currency from the NWF to make up for any shortfall in revenue from oil and gas exports. (Conversely, the NWF traditionally makes purchases in the event of a surplus.) While it was in operation, the budget rule restrained spending and ensured the buildup of currency reserves.
Under Russian law, the NWF must compensate the government for any decreases in oil and gas revenues. All else being equal, a $10 per barrel decline in the price of oil would leave Russia’s state budget about 1.6 trillion rubles short. For the fund’s reserves to be at risk of exhaustion, the average annual price of oil would have to fall below $60 a barrel. Anything short of this will merely eat into revenues. In any case, revenue decreases can be offset with loans, cost-cutting, or even funds raised through a public offering on the Russian stock exchange.
The need to support economic growth through budget spending in the absence of a budget rule prompted the Finance Ministry to balance the 2024 budget upon a projected oil price of $71. In other words, expenditure is inflated because the budgeted oil price is significantly higher than it was before ($60). Nevertheless, the authorities have indicated that they will need to perform a fiscal belt tightening in 2025, which could have a dampening effect on economic growth. A return to the old budget rule means that expenditure will also be reduced. It is possible that the spending cuts will help to curb inflation (though this is not guaranteed), but they will also have a negative impact on economic growth.
Economic instability destabilizes the regime.
Cyrus Newlin 22, Former Adjunct Fellow (Non-resident) for the Europe, Russia, and Eurasia Program; Andrew Lohsen, Fellow with the CSIS Europe, Russia, and Eurasia Program, 5/4/2022, "Russia Futures: Three Trajectories," Center for Strategic & International Studies, https://www.csis.org/analysis/russia-futures-three-trajectories, christian
The Kremlin has grown confident that its risk-taking usually achieves favorable results, leading it to adopt a more confrontational stance with the West to achieve its strategic aims. That attitude of risk tolerance rests on a perception that Russia and the current regime do not face any imminent existential threats, despite fevered statements from top officials about the dangers posed by NATO enlargement and Ukraine’s cooperation with Euro-Atlantic partners. In reality, the most likely threats to regime survival are likely to come from within and not from the West. A genuine political crisis emerges that threatens the regime politically—for instance, the emergence of a nationwide protest movement calling for new leadership over poor economic conditions and endemic corruption, an excessively violent crackdown on public protests that ignites outrage, or the emergence of a grassroots anti-war movement as Russian soldiers are killed and wounded while enforcing Russia’s claims to a sphere of influence—could induce the Kremlin to move toward extreme risk acceptance as it hopes to deflect emerging discontent by mobilizing the country against external threats.
Economy
The timeline for the “baseline” economic trajectory of prolonged stagnation (outlined in the first scenario) is accelerated by the rate of decarbonization globally. State coffers shrink while the costs of climate change for Russia grow, due in part to penalties imposed by third-party countries on Russian imports. The government is forced to make further cuts to social services, increase taxes to offset lost oil and gas revenues, and freeze or reduce state workers’ wages in an effort to maintain equilibrium. However, declining commodity prices linked to lower demand for hydrocarbons cause the value of the ruble to drop substantially, increasing poverty rates and leading to large-scale street protests. Russia begins to tap into its Sovereign Wealth Fund with increasing frequency to prop up the ruble and to issue bailouts and subsidies in the hope of maintaining order.
That ignites a nuclear black market---extinction.
Joseph Cirincione 23, national security analyst and author with 40 years of experience in DC, member of the Council for Foreign Relations, author or editor of seven books including Nuclear Nightmares: Securing the World Before It Is Too Late and Bomb Scare: The History and Future of Nuclear Weapons, served on the International Security Advisory Board for Secretaries of State John Kerry and Hillary Clinton, 6/25/2023, "Russia Mutiny Is More Proof the World Needs to Get Rid of Nuclear Weapons," Daily Beast, https://www.thedailybeast.com/russia-mutiny-is-more-proof-the-world-needs-to-get-rid-of-nuclear-weapons, christian, edited for language
With Putin now gravely weakened, the Russian state again appears unstable. But there is no guarantee that such an effort could be repeated. A nuclear black market could spread weapons, material and scientists to the far corners of the globe.
The final terror was that an insane [unstable] Putin might explode the weapons in revenge. If the coup succeeded and he was going down, would he take the nation down with him? Or worse? A nuclear version of Hitler in the bunker asking “Is Paris burning?”
As in all nine nuclear-armed states, the decision to launch nuclear weapons is left to one or two leaders. There is no democracy in nuclear use. No vote required. No debate. No court decision can block it. The military is drilled daily to follow a launch order immediately, without question. Only a far greater mutiny than we saw June 24 could prevent it.
Although there have been dozens of computer and machine failures that brought us perilously close to mistaken nuclear launches over the decades, the weakest link in the nuclear command and control chain remains the humans who manage them. Many of these leaders have been considered mentally unbalanced, including in our country. It takes a committed optimist to believe that we can leave thousands of nuclear weapons in fallible human hands indefinitely and something terrible won’t happen.
Something terrible will happen. It just didn’t happen this time.
1NC---Shell [Middle East]
Rising prices now but we still need to be careful.
Reuters 7/22 [Reuters is one of the largest and most trusted news agencies in the world; 07/22/2024; “Oil prices rise as investors look for signs US rate cuts to begin,” The Economic Times; https://economictimes.indiatimes.com/markets/commodities/news/oil-prices-rise-as-investors-look-for-signs-us-rate-cuts-to-begin/articleshow/111913557.cms] iman
Oil prices rose in early trade on Monday as investors keep a lookout for signs of a rate-cut cycle expected to begin as soon as September. Brent crude prices were up 48 cents, or 0.57%, at $83.10 a barrel by 0035 GMT, and U.S. West Texas Intermediate crude futures rose 42 cents, or 0.52%, to $80.55. "Since the June FOMC meeting, inflation and labour market data have signalled that disinflation and labour market rebalancing are in place, which we expect will allow the Fed to begin its interest rate cutting cycle in September," ANZ Research said in a note. The U.S. Federal Reserve will next hold a Federal Open Market Committee (FOMC) meeting on interest rates on July 30-31, at which investors expect the Fed to keep the rates unchanged, while looking for any signal of a cut coming later in the year. On the political front, U.S. President Joe Biden abandoned his reelection bid on Sunday under pressure from fellow Democrats and endorsed Vice President Kamala Harris as the party's candidate to face Republican Donald Trump in November. Slower-than-expected economic growth of 4.7% for China in the second quarter sparked concerns last week over the country's demand for oil and continues to weigh on prices.
A shift to renewables creates destabilization of oil prices which collapses stability of many countries.
Blaine 21 [Tegan; a director of climate, environment & conflict at the U.S. Institute of Peace; 06/21/2021; “Can the World Go Green Without Destabilizing Oil-Pumping Nations?”; USIP; https://www.usip.org/publications/2021/06/can-world-go-green-without-destabilizing-oil-pumping-nations]
Amid the dizzying acceleration of headlines and debate about the vital global transition to renewable energy, new research shows how that change could destabilize dozens of fragile states that depend heavily on oil exports. The new study underscores that governments and international institutions will need to guard against risks that the shift away from carbon-heavy fuels will inadvertently upset political balances and potentially ignite violent conflicts in a swath of nations from Venezuela to Nigeria to Iraq and beyond. Above all, the research suggests, the world must avoid an unplanned “traumatic decarbonization” of these economies.
The U.S. recommitment to the Paris climate accords — plus summit conferences called by the Biden administration, the G7 nations and NATO — reflect the reality that countries are moving to cut their oil consumption in hope of constraining the planet’s warming. Politicians in the world’s more comfortably developed nations focus on managing this transition to serve their own economies and polities, meeting costs and generating jobs, with an eye toward winning the next election.
Where Oil Buys Stability
Yet fragile states that produce a large share of the world’s oil face a different, more acute problem set. Their leaders, rarely confronted with true electoral challenges, pursue political survival instead by cutting deals among contentious and often violent elite factions. The deals typically involve material benefits linked to the cash from oil exports. When these countries face a sudden cutoff of their cash flow, leaders must either bargain — or battle — for slices of a smaller pie.
A challenge for U.S. and allied policymakers is that a greening of the global economy creates new risks for violence on a global scale. Violent conflict already has been rising for a decade, driven by spikes in civil unrest and again this month resetting the record for human displacement — now 82.4 million people worldwide. And we know already that a transition to renewable and other low-carbon energy sources will risk igniting unintended conflicts around the mining of minerals that will be essential to green technologies. The

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