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The oil world and its villains

In a new book, journalist Peter Maass takes a voyage into the troubled regions of the world and finds oil corrupting almost everything it touches

Climate change and worries about energy security have been the two dominant forces behind a growing popular resentment of the hydrocarbons sector in recent years. But, suggests Peter Maass, a New York Times journalist, there remain more basic and equally compelling reasons why the world should conquer its addiction to oil. From Iraq to Texas, to Central Asia, to west Africa, oil and the companies that seek it bring havoc and violence in their wake, he says.

Maass' book, Crude World: The Violent Twilight of Oil, is a disturbing depiction of the corruption, degradation and destruction that have come to be such frequent bedfellows of the oil industry. The premise of the book is not new. Armed with information from controversialists such as peak-oil guru Matthew Simmons, Maass argues that the geological fact of depletion is drawing the world's biggest firms and most rapacious energy consuming nations into a battle for the remaining resource. It is an unseemly and, in Maass' description, almost an apocalyptic battle, whose victims are the pillaged denizens of degraded areas such as the Niger Delta.

The oil companies aren't the only villains of his piece. Governments (in particular the US) have tilted their foreign policies towards the pursuit of oil, with little regard for the consequences, he argues. Indeed, although Maass concludes that the pursuit of oil was a part of the motivation for the US-led invasion of Iraq, he notes that such geopolitical strategising is often at odds with the wishes of the companies themselves, for which war is an inconvenience when business can be accomplished better without it.

The resource-owning governments are also culpable. In some cases, their guilt is egregious. Maass devotes a chapter to the bizarre and disturbing reign of Teodoro Obiang in Equatorial Guinea. Western banks and oil companies have, to be sure, helped keep the money flowing to that tyrant. Some of them, Maass shows, have helped facilitate the rampant corruption of the country's finances, too. But Obiang's villainy is nonpareil, even by the standards of tin-pot, resource-rich dictatorships. The portrait of Equatorial Guinea and its president is reportage of high quality.

Other governments have also scandalously mismanaged their oil wealth. Maass shows how Saudi Arabia's failure to diversify its economy and give its disaffected youth a stake in any wider national vision helped foster radicalism of the kind that produced Osama Bin Laden and other Jihadists. Oil, Maass writes after meeting one young Saudi warrior in Iraq, "paid for and provided the inspiration for his violence".

Even President Hugo Chávez' project in Venezuela, with its ostensible ambition to spread the country's oil wealth to its millions of impoverished citizens, has run into the ground, suggests Maass. An economy so heavily reliant on oil is unsustainable and desperately exposed to the vagaries of the crude price. Chávez and, in a similar way, Russia's Vladimir Putin, had the good fortune to take office just as oil prices set off on the bull run of the last decade. But the influx of cash has only masked the structural problems of economies that are too heavily dependent on crude exports.

These aren't conclusions drawn from economics books, but from what the journalist witnessed. It makes for an engaging first-hand narrative. Maass travelled to the hotspots of the global energy scene and spoke to people on the ground. The book was several years in the writing. There are passages of exceptionally compelling journalism, such as his travels with rebels in the Niger Delta.

It is understandable, given those experiences, that the author's sympathies rest with the poor and oppressed, who shared with him the material for his portrait of the oil industry.

But Maass' deep cynicism about the oil sector and those who work in it – especially those at the top of the business – lacks balance. He cites social psychologist Stanley Milgram's famous experiment from 1961, in which human subjects were asked to administer electric shocks of increasing force to other humans who answered questions incorrectly. The experiment, Milgram said, showed that "ordinary people can become agents in a terrible destructive process" and commit acts – like electrocuting another person for an arbitrary reason – that are "incompatible with fundamental standards of morality".

Maass says he thought of Milgram's experiment when he interviewed oil executives across the globe. "I was interested not only in the relatively few who'd been indicted or convicted of corruption, but also in the larger number who woke up every morning, ate a good breakfast, kissed their wives or girlfriends good-bye and headed out to participate in an extractive industry that had a high probability of bringing poverty, violence and dictatorship to the countries they worked in."

That is a scurrilous slur to make on many people. And what of the aid-workers, nurses, teachers, environmentalists, human-rights activists or campaigning journalists who rely on oil to do their job, switch on their lights, drive to work or tour the globe by aircraft to interview oil executives?

Better principles

Part of the blame for bad behaviour in the oil industry, suggests Maass, is that good behaviour doesn't always carry out the fiduciary duty of a company to its shareholders (see p18). "The problem is not that extractive industries have lower principles than other industries. The problem is that they must have better principles. Unfortunately, having a soul is a luxury the law and shareholders do not encourage."

Maass points to some of the absurdities of this reality – as well as some of the unintended consequences. Chevron, for example, can't simply admit liability for ecological degradation in Ecuador; its duty to shareholders is to fight such claims for as long as possible in the courts. Meanwhile, Western companies that do steer clear of unsavoury regimes and practices yield a competitive advantage to firms with lower standards and less attentive shareholders.

The book's central thesis – that our thirst for oil has brought devastation around the world – is compelling because of Maass' gifts as a story-teller and reporter. This is an account from the frontline of the energy question and its thorny ethics. The solutions Maass offers in a short conclusion – more alternative energy, conservation, and more adherence by companies to campaigns like Publish What You Pay – are worthy, but feel banal compared with the startling portraits of the main narrative.

His book won't be easy reading for anyone who works in the oil sector. The industry's underbelly is crude, ugly and dirty. Anyone can look up the price of a barrel of oil, but Maass shows us some of the true human price. The industry should worry about both costs.

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