Past Its Peak

Robert Vitalis

  • Crude World: The Violent Twilight of Oil by Peter Maass
    Allen Lane, 276 pp, £20.00, October 2009, ISBN 978 1 84614 246 8

In 1905 a British journalist called James Dodds Henry travelled to Baku, an enclave on the southern frontier of the Russian Empire that had recently become the centre of the world oil industry. ‘If oil is king, Baku is its throne,’ he wrote in Baku: An Eventful History. But the Russian industry was even then beginning a precipitous decline following a series of crippling strikes in the oilfields led by a young Joseph Stalin, and rebellion was spreading across the Caucasus. Dodds wrote of the waves of ‘inter-racial savagery’ between Muslim Tatars and Armenian Christians that had laid waste to the refineries and the surrounding boom town.

Crude World is Peter Maass’s account of the violence, tyranny, poverty, environmental degradation, corporate malfeasance, corruption and state failure that seem to be fuelled by oil. By these lights, what happened in Baku might be taken as confirmation of the ‘resource curse’ hypothesis. This is a statistical correlation that economists and political scientists began to explore in the 1980s: it holds that states whose economies are based on the production and export of oil or other mineral resources grow less fast and repress their populations more than other states. Maass uses the idea loosely to organise his often riveting account of politics in oil-producing countries (including Equatorial Guinea, Nigeria and Ecuador) and the pressures on Western companies fighting over a shrinking portion of the world’s reserves – and breaking the law as they do so. There are also accounts of the few oil producers that don’t fit the formula of kleptocracy and brutalisation quite so neatly – among them, Saudi Arabia, Russia and Venezuela.

Oil doesn’t just make certain societies more repressive and corrupt than others. According to Maass, it goes a long way towards explaining recent wars, both conventional and unconventional. Saddam Hussein marched into Kuwait in August 1990 in a bid to ‘control’ more of the stuff, and the United States overthrew him in 2003 as a result of its leaders’ own obsession with securing unimpeded ‘access’ to this ‘inebriating crude’ – which also led them to exaggerate the threat of Iraq’s weapons programme. Apparently they weren’t ‘thinking straight’. The Saudi rulers weren’t either: having paid billons to aid ‘the global spread of fundamentalism’, the money has come back to haunt them and the West in the form of violent jihadism.

The best chapters combine Maass’s own reporting with the work of other investigative journalists. Ken Silverstein, for example, the Washington editor of Harper’s, first exposed Teodoro Obiang’s use of the Riggs Bank in Washington, which stashed Equatorial Guinea’s royalty payments from Exxon in accounts controlled by Obiang himself: ‘Imagine a company making its tax payment not to an account controlled by the IRS but to … Barack Obama.’ Maass also makes good use of US court records, although in the case of James Giffen, the middleman who helped Chevron win contracts in Kazakhstan and was indicted for kicking back $80 million to President Nazarbayev and other officials, the paper trail was abandoned on grounds of national security after Giffen revealed that he was a CIA asset. In another case the trail takes Maass to Odessa, Texas, where in 2003 a handful of oil towns charged Exxon, Chevron and a dozen other giant firms with defrauding them of royalty payments for more than a decade. Unfortunately, Maass drops the story – was there corporate fraud or not? – in his rush to move on to other schemes and further instances of the resource curse theory.

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[*] ‘Carbon Democracy’ (Economy and Society 38, 2009).