Oil's Slippery Slope

Review of Sonia Shah's new book, Crude: The Story of Oil shakes up the daydream that events in Iraq, Nigeria or Columbia don't affect us all....

Published: 18-Oct-2004

class=intro-copy>If someone sitting in air-conditioned comfort in one part of the world believes that what happens in Iraq or Nigeria, Venezuela or Colombia doesn't affect him or her, Sonia Shah's Crude: The Story of Oil takes that little daydream and shakes it up.

Whether it's a geopolitical conflict or social protest against oil companies or the spewing of pollutants into the atmosphere, oil is always seeping into our world.

Shah puts it bluntly: We are living on borrowed time.

The supply of oil is, of course, finite. And there is fear that the era of peak production — the time when about half of the reserves are gone — is approaching.

In 1999, Goldman Sachs characterized the oil business as a "dying industry."

In 2002, the USA used almost 20 million barrels of oil a day, the global leader of consumption. China is in second place, followed by Japan.

Shah, a journalist whose work has appeared in The Nation and on Salon.com, has written a book that couldn't be more relevant.

In the chapter titled "Running on Empty," Shah examines the situation in Iraq. Saddam Hussein, she writes, was using Iraqi oil as a "weapon to punish his enemies."

By February 2003, "He claimed Iraq would double its oil production to 6 million barrels a day by 2012," and he said the ones drilling for oil would be Russian, French and Chinese companies, Shah writes.

"Then, seemingly out of nowhere, in the spring of 2003, the United States invaded Iraq on a flimsy pretext, purporting to rid the broken country of destructive weapons," she writes.

Most of the richest deposits of oil and natural gas are to be found in countries racked by war, civil unrest and other problems, or in forbidding locations, such as the North Sea.

Oil companies have masterfully linked increased oil and energy production as "essential to the continued progress, prosperity and well-being of the world's citizens," Shah writes.

Yet, she adds, analysts from relief organizations, activists groups and "even the World Bank," point out that the standard of living tumbles when oil companies set up shop.

Nigeria is a painful example. In the Niger Delta, residents lived in one of the lushest places on Earth. Seafood was plentiful and the people who lived there were able to sustain themselves.

Oil exploration and extraction destroyed the fragile ecosystem, and in places such as Okoroba and Ogoniland, the legacy was the loss of cash crops, dead fish and acidic pollutants that tightened residents' lungs, affected their skin and eroded their roofs.

Any attempt to fight the oil companies led to bloody reprisals by the Nigerian government. While people starved, Shah notes, former Nigerian military strongman Sani Abacha and his cronies were able to amass a multibillion-dollar fortune.

And what are we to make of all this? Well, Shah says, oil executives should have been preparing themselves and consumers for a new world order in which oil no longer rules.

Instead, she demonstrates, oil companies have led consumers on an elaborate charade where profits, consolidation of oil empires and market dominance are more important than reality.

"An unprecedented crisis is just over the horizon," says former Shell geologist Kenneth Deffeyes. "There will be chaos in the oil industry, in governments, in national economies. Even if governments and industries were to recognize the problem, it is too late to reverse the trend. Oil production is going to shrink."

Industrialized countries, which already gobble vast amounts oil, are competing with developing countries which, as their economies expand, have an increasing appetite for more oil and money.

Shah puts the responsibility squarely on all the policymakers — and consumers — but it's unclear who, if anyone, has the will, the courage and the juice to turn around this dicey situation.

Shah concludes her book with this Saudi Arabian saying: "My father rode a camel, I drive a car, my son rides in a jet airplane. His son will ride a camel."




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