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Chris Saliba reviews Crude World: The Violent Twilight of Oil, by Peter Maass
Crude World: The Violent Twilight of Oil, by Peter Maass (Published by Penguin Australia)
‘It’s the devil’s excrement’, according to former Venezuelan oil minister Perez Alfonzo. Why? Oil acted like a dangerous, addictive drug on the Venezuelan economy. It gave a fantastic rush of money when oil prices were high, prompting profligate spending. Yet when prices dipped, there would always be the morning after.
In this wide ranging book journalist Peter Maass (he contributes regularly to The New York Times Magazine and New Yorker) looks at all the ill effects oil has on individuals and countries alike. As you’d expect, Crude World is a depressing tale of extreme fear and greed.
The main thesis of the book is that oil creates volatility and havoc at all levels. For poor African nations like Nigeria and Equatorial Guinea, plundering US oil concerns are happy to work with dictators and strongmen. The money that should go to the impoverished people of these countries is funnelled back to corrupt leaders who lead the sort of lavish lifestyles that would make Marie Antoinette blush.
Other countries, like Ecuador, find their environment despoiled by marauding oil companies. The unhappy histories of the Middle East are well known. War in Iraq and Kuwait, US meddling in Iran. Saudi Arabia is an unusual case all of its own. Its massive oil endowment has created a lopsided economy, completely captive to the vicissitudes of the global oil market. (90 per cent of the country's exports are oil, bringing in 75 per cent of the country’s revenues.)
Saudi Arabia has high unemployment, a large foreign workforce of professionals and an indolent class of royalty who all live on a stipend. Oil has allowed the population to explode, but reduced the pay checks of royal princes. A lot of young people (the Kingdom has a high youth population) have nothing to do, living off a virtual mono-economy that doesn't provide career paths.
Maass summarises nicely the ill effects oil can have on an economy (the Sydney Morning Herald’s Peter Hartcher made a similar argument recently, with regards to Australia’s export of coal):
“We’ve seen this before: as the oil sector grows, farming and manufacturing contract, unemployment expands, inflation rises due to the influx of revenues from oil sales, and the gap between rich and poor widens.”
While we in the West can hold our nose when we read about these terrible troubles in the rest of the world, the reality is that our oil dependence means we help contribute to this ugly reality. Our leaders cheerfully extol the virtues of globalisation, but don't like to talk about the money that Saudi Arabia funnels into supporting fundamentalist causes.
Maass also gives an eye opening look from the business end of oil. How ironic, he notes, that we easily recall the names of superstar CEOs from the world of business. Yet the oil industry’s superstar CEO, Lee Raymond of ExxonMobil, is a complete unknown to us. The author gives an almost Dickensian description of the corpulent Lee Raymond. He is more medieval king that CEO.
A lot of the territory that Peter Maass covers in Crude Oil has been well documented elsewhere. What makes this book attractive is the extensive first hand reportage. Maass has access to a lot of good interview subjects, both high level political and business players, down to activists and the ordinary people affected by oil. This he mixes with an engaging and cheerful style. Maass has the novelist's gift for drawing lively portraits and is never at a loss for an evocative metaphor. It's these qualities that really made Crude Oil a very enjoyable book.
So often we are immersed in 'facts' on these economic and political questions. How refreshing it is to get a first hand description of real people rather than just the general sweep of events.
Crude Oil, despite its gloomy and depressing subject matter, ends in a rather upbeat tone. The problems of our oil dependence can be fixed by enthusiastically taking up the existing renewable technologies, we are assured. All we need is the will. This optimistic ending didn't work for me though, especially after wading through so much depressing reality. Peter Maass makes for a brilliant observer, but it seems obvious he hasn’t thought through very deeply the question of how we will segue from the oil economy to the new renewable economy.
And that day is coming sooner than later. In all likelihood we have used up half the world’s oil endowment. We’re quickly on our way to consuming the last half.
Crude Oil opens with an interview with Matthew Simmons, author of the influential Twilight in the Desert. Simmons is an investment banker, and a former energy advisor to George W. Bush. He has studied in depth the technical papers of the Society of Petroleum Engineers on Saudi Oil. What he found was that the Saudi authorities have vastly overstated the capacity of their reserves. He also found serious mismanagement resulting in damaged oil fields: all of the remaining oil may not be recoverable. He believes we could be in for serious trouble unless we can come up with an alternative energy source.
Even more pessimistic is James Howard Kunstler. In his book The Long Emergency, Kunstler provides some unpalatable statistics for the reader to digest. The world's total oil endowment is some 2 trillion barrels. We have made our way through 1 trillion barrels so far, most in the last 50 years. At our current rate of consumption, we will empty out every last drop in 37 years. That does not take into account any growth in the Chinese and Indian economies - or any other economy for that matter. Nor does it factor in the difficulties in extracting the last half of our global oil endowment. All of the remaining oil will not be recovered. (There is a range of technologies used currently to extract oil out of the ground, like injecting water into oil fields. They all use rising levels of energy, thus diminishing the value of the oil recovered.)
Babies born today will not be driving cars run on petrol when they hit their thirties. How will they drive their cars? How will food be transported? What will happen to all the new outer suburbs that are currently totally dependent on cars? Why aren’t governments planning for this?
Kunstler says the economy built by oil has been nothing more than a 100 year bubble – and it’s about to burst.
Can a new energy source ‘come online’ that has the value of the one trillion barrels of oil we’ve used so far, keeping us living a lifestyle we see as normal? Peter Maass thinks that if we work for it such a reality will come, yet the bulk of his book – the ugly politics, violence and money – speak of a troubling future.