by Peter Maass
It is common for writers to thank their agents, but my esteem for Kathy Robbins exceeds the norm. Counselor, guardian, friend—there is no role or task that Kathy and David Halpern, who works with her, have not fulfilled. It is hard to imagine a writing life without them.
Quite obviously I am able to write because of the special literary biosphere I am fortunate to inhabit. The people I have just mentioned have been constant presences over the years, but for this book I was helped by an additional group of collaborators.
I often worked in foreign countries with interpreters who did much more than translate; they were political and cultural guides who also kept me safe at moments of risk. In Iraq I had the great fortune of teaming up with Thaier Aldaami, who learned English by listening to the songs of Donny and Marie Osmond. I also worked with Salam Pax, a blogger who was reading a Philip K. Dick novel when we met.
In Nigeria I was led by Tony Iyare, who had the ability to not only smooth my passage into the violent Niger Delta but to smile throughout our journey. In Ecuador, where things went slightly more easily, Yury Guerra and Julian Larrea were my linguistic companions. In Venezuela, Leonardo Lameda steered me from Gramoven to Miraflores. In Russia, Anya Masterova was at my side. In Pakistan, Majeed Khan arranged entrée into the halls of power and the corridors of madrassas; his humor was a welcome bonus.
I conducted hundreds of interviews with executives, politicians, dissidents, activists, lawyers, warlords and others. Some of them may not agree with my views, but they were kind enough to talk without preconditions. Those who were generous with their time or facilitated my work include Matthew Simmons, Sadad al-Husseini, John Bennett, Frank Ruddy, Carlos Robles, Gabriel Nguema Lima, Dokubo Asari, King Tom Mercy, Chris Finlayson, Steve Donziger, Donald Moncayo, Marlon Santi, James Giffen, J. Bryan Williams, Colonel Bryan McCoy, Osama Kashmoula, Mohammed Aboush, Dathar Khashab, Captain Tom Hough, Bassim Alim, Ibrahim al-Mugaiteeb, Vagit Alekperov, Bernard Mommer, José Toro-Hardy and Charlie Cooper.
With journalists facing economic challenges, the support of nonprofit and educational institutions is more important than ever. I was fortunate to have a semester-long teaching position at Princeton University’s Council of the Humanities, a spell as a Regents’ Lecturer at the University of California at Berkeley, and a residency at the Blue Mountain Center in the Adirondacks. All were wonderful respites from the slog of writing as usual.
In much of my travels I had the luck of working with remarkable photographers, including Gilles Peress, Christopher Anderson, Laurent van der Stockt and Thomas Dworzak. This book features pictures by Anderson and Dworzak, as well as Michael Kamber, Ed Kashi, Antonin Kratochvil and Christopher Morris, among others. I have often thought that if my words could be half as powerful as their photos, I would have succeeded at my job.
Friends have pitched in, too. Michael Massing has been a source of enlightenment and advice. Alexander Stille and his son, Sam, have been warm and inspiring hosts. Catherine Talese provided crucial advice on the photos that appear in this book. I received excellent readings on various chapters from Paul Tough, Ken Silverstein, Michael Watts, Owen Matthews, Robert Worth, Michael Massing and Chris Anderson. Chuck Wilson and Dan Kaufman did the hard work of fact-checking. Thanks also to Gary Bass, Anne Kornhauser, Richard Kaye and Ruti Teitel. And as ever, thanks to my colorful family—mother, siblings, stepmother, nephews, nieces and cousins.
I have saved the best for last. My wife, Alissa Quart, is my love, my friend, my teacher and my partner in mirth. She had the patience to read early drafts of my manuscript and the wisdom to realize when I was heading into a ditch; she shaped this book. The writing process was not easy for me, but I suspect it was even more difficult for her, because an author struggling with a manuscript is an author in pain. I have dedicated this book to her, but more justified is the dedication of my life to her.
Peter Maass
New York City
MAY 2009
APPENDIX A
WORLD CRUDE OIL RESERVES*
SELECTED COUNTRIES
(First figure is barrels of oil in billions; second figure is percent of world total)
Saudi Arabia 264.2 21.3%
Iran 138.4 11.2%
Iraq 115.0 9.3%
Kuwait 101.5 8.2%
United Arab Emirates 97.8 7.9%
Venezuela 87.0 7.0%
Russian Federation 79.4 6.4%
Libya 41.5 3.3%
Kazakhstan 39.8 3.2%
Nigeria 36.2 2.9%
United States 29.4 2.4%
Canada** 27.7 2.2%
Qatar 27.4 2.2%
China 15.5 1.3%
Algeria 12.3 1.0%
Mexico 12.2 1.0%
Angola 9.0 0.7%
Norway 8.2 0.7%
Azerbaijan 7.0 0.6%
Sudan 6.6 0.5%
Oman 5.6 0.5%
India 5.5 0.4%
Indonesia 4.4 0.4%
Ecuador 4.3 0.3%
United Kingdom 3.6 0.3%
Gabon 2.0 0.2%
Equatorial Guinea 1.8 0.1%
Brunei 1.2 0.1%
Chad 0.9 0.1%
Total World Reserves: 1,237.9
OPEC 934.7 75.5%
Former Soviet Union 128.1 10.4%
Source: BP Statistical Review of World Energy 2008
* Proved reserves of oil: Generally taken to be those quantities that geological and engineering indicates with reasonable certainty can be recovered in the future from known reservoirs under existing economic and operating conditions.
** Canadian oil sands: 152.2 billion barrels
APPENDIX B
U.S. CRUDE OIL IMPORTS
TOP 15 COUNTRIES
(Figures in barrels per day)
Canada 1,845,000
Mexico 1,092,000
Venezuela 949,000
Saudi Arabia 944,000
Nigeria 860,000
Angola 644,000
Iraq 587,000
Brazil 334,000
Colombia 254,000
Russia 219,000
Algeria 215,000
Ecuador 210,000
Kuwait 181,000
Gabon 108,000
Norway 103,000
Source: Energy Information Administration. Figures for March 2009.
NOTES
Introduction
“Nothing to do with oil”: Quote from Rumsfeld interview with Steve Kroft in November 2002. Available at www.defenselink.mil/transcripts/
transcript.aspx?transcriptid=3283.
They are examples: The resource curse theory gathered force in academic circles after Jeffrey Sachs and Andrew Warner published a National Bureau of Economic Research paper in 1995: “Natural Resource Abundance and Economic Growth.” Their paper, which tracked the performance of ninety-five countries between 1970 and 1990, showed a correlation between dependence on natural resources and slow economic growth. “Resource-poor economies often vastly outperform resource-rich economies in economic growth,” they concluded. Subsequent research showed variations in the fates of resource-rich nations; the curse was not absolute and was affected by a variety of factors. Some of the best research on the curse has been conducted by Michael Ross of the University of California-Los Angeles, Paul Collier of Oxford University and Terry Lynn Karl of Stanford. Karl’s The Paradox of Plenty: Oil Booms and Petro-States is a seminal text.
As the graffiti: Along the Quito-Lago Agrio highway, about forty miles west of Lago Agrio.
Norway was the outlier: For an incisive look at Norway’s unique experience with oil, see Terry Lynn Karl’s The Paradox of Plenty: Oil Booms and Petro-States, pp. 213–221. “The structures that ‘received’ Norway’s boom could hardly have been more different from those of the developing countries,” Karl wrote. “Oil companies, especially eager to exploit resources outside of OPEC’s dominion, did not encounter a poor country, a weak state, undeveloped social forces, or a predatory, authoritarian ruler … Organizing a framework for controlling the oil industry required a h
igh degree of sophistication in planning and administration, which Norway, unlike other oil exporters, possessed in abundance.” There is no shortage of reports and articles on the fortunate outcome of the Norwegian experience. Some of the latest include “Thriving Norway Provides an Economics Lesson,” by Landon Thomas Jr., New York Times, May 14, 2009, and “Frugal Norway Saves for Life After the Boom,” by Doug Sanders, Globe and Mail, January 31, 2008.
“fill the sight by force”: Roland Barthes, Camera Lucida: Reflections on Photography, p. 91.
1 Scarcity
Simmons is the prosperous founder: The firm, Simmons & Company International, is based in Houston. Since its 1974 founding, the company says, it has acted as financial adviser on $134 billion in transactions.
Most, if not all: See The End of Oil: On the Edge of a Perilous New World, by Paul Roberts, pp. 48–49.
As a teenager: Simmons’s participation on a high school debate team was chronicled by Mimi Swartz in a Texas Monthly article, “The Gospel According to Matthew,” published in February 2008.
The geological phenomena: Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, by Matthew R. Simmons, pp. 100 and 334.
Daniel Yergin: See Daniel Yergin’s opinion piece “It’s Not the End of the Oil Age,” Washington Post, July 31, 2005.
The price is expected: For an analysis of the relationship between supply, demand and prices, see the report “Causes and Consequences of the Oil Shock of 2007-2008” by James Hamilton, an economics professor at the University of California, San Diego. Hamilton presented his report at an April 2009 conference sponsored by the Brookings Institution; it has been posted at www.brookings.edu/
economics/bpea/~/media/Files/Programs/
ES/BPEA/2009_spring_bpea_papers/2009_
spring_bpea_hamilton.pdf. Also, the global recession that began in 2008, though reducing the price of oil in the short term, could make the return of high prices even more dramatic, because some companies have been unable to secure financing for oil-exploration projects. In a story on its website, The Wall Street Journal noted that “the long-term outlook for oil supply isn’t getting any better, which means the prospects for a price spike when demand finally recovers is increasing.” See www.blogs.wsj.com/environmentalcapital/
2009/04/24/oil-prices-opec-secretary-warns-of-darkening-crude-supply/.
He tells audiences: See Naimi’s speech to an OPEC meeting in Vienna on September 12, 2006. Available at www.saudi-us-relations.org/fact-book/speeches/2006/
060912-naimi-vienna.html.
There is an echo of truth: See the report by the U.S. Senate Permanent Subcommittee on Investigations, “The Role of Market Speculation in Rising Oil and Gas Prices,” June 27, 2006.
Simmons reintroduced: For a lengthier discussion of peak oil, see pages 45–52 in Paul Roberts’s The End of Oil. For an even lengthier discussion, see Kenneth Deffeyes’s Beyond Oil: The View from Hubbert’s Peak.
Nor can we squeeze: See “Scraping Bottom,” by Robert Kunzig, National Geographic, March 2009; “The Costly Compromises of Oil from Sand,” New York Times, January 7, 2009; “Canada Pays Environmentally for U.S. Oil Thirst,” Washington Post, May 31, 2006; “An Empire from a Tub of Goo,” Globe and Mail, January 26, 2008; and Elizabeth Kolbert’s “Unconventional Crude,” New Yorker, November 12, 2007.
Responding to American support: For an excellent description of the 1973 embargo, see Daniel Yergin’s The Prize: The Epic Quest for Oil, Money, and Power.
What’s known is that: According to the 2008 BP Statistical Review of World Energy, published in June 2008, the world’s proved reserves of oil are 1.2 trillion barrels. Posted at www.bp.com/liveassets/bp_internet/
globalbp/globalbp_uk_english/reports_and_
publications/statistical_energy_review_2008/
STAGING/local_assets/downloads/pdf/
statistical_review_of_world_energy_full_
review_2008.pdf.
A modern example is Oman: For more information on Oman’s troubles, see “Oman’s Oil Yield Long in Decline, Shell Data Show,” New York Times, April 8, 2004, and “Thirst for Oil Feeds Innovation in Oman,” Washington Post, August 12, 2008.
Saudi Arabia possesses: Figures from the BP Statistical Review of World Energy, 2008. See www.bp.com/productlanding.do?categoryId=6929&contentId=7044622.
Every day, the Saudis provide: Saudi production varies according to world demand. Aramco claims a production capacity of nearly 12.5 million barrels a day. In recent years, production has ranged between 8 million and 10.5 million barrels a day.
The much-contested reserves: See the U.S. Geological Service report “Arctic National Wildlife Refuge, 1002 Area, Petroleum Assessment, 1998, Including Economic Analysis.” See www.pubs.usgs.gov/fs/fs-0028-01/
fs-0028-01.htm
Before visiting the kingdom: The conference, organized by the Center for Strategic and International Studies, took place on May 17, 2005.
I noted that Royal Dutch/Shell: See “Can Shell Put Out This Oil Fire?,” BusinessWeek, May 3, 2004.
This scenario assumes: The technology is certainly available to significantly increase the use of alternative energy in the medium term. For instance, a key impediment to greater wind power is the absence of transmission lines to distribute wind energy across the country; building a new grid would require large amounts of capital. But combined with rigorous conservation efforts, a shift from fossil fuels is imaginable. The will to do so, as I explain in the conclusion, is another matter.
The end of the suburban: The Long Emergency: Surviving the Converging Catastrophes of the Twenty-First Century was written by James Howard Kunstler and published by Atlantic Monthly Press in 2005.
“Someday (and perhaps that day will be soon)”: See Simmons, Twilight in the Desert, p. 179.
“I can read two hundred papers on neurology”: Quoted in the Financial Times, February 27, 2004, in “Saudi Aramco Dismisses Claims over Problems Meeting Rising Global Demands for Oil.”
“This is not the first time”: “It’s Not the End of the Oil Age,” Washington Post, July 31, 2005.
2 Plunder
President Teodoro Obiang’s: His full name is Teodoro Obiang Nguema Mbasogo.
Obiang, whose salary: For salary information, see Ken Silverstein’s posting at Harpers.org, www.harpers.org/archive/2006/04/sb-obiang-eg. For details on the $700 million, see the report by the U.S. Senate Permanent Subcommittee on Investigations, “Money Laundering and Foreign Corruption: Enforcement and Effectiveness of the Patriot Act; Case Study Involving Riggs Bank,” issued on July 15, 2004. Copy posted at www.hsgac.senate.gov/public/_files/
ACF5F8.pdf.
In Ecuador, oil led to: See “Drilling into Debt,” a report pubished in 2005 by Oil Change International. Copy posted at www.priceofoil.org/thepriceofoil/
debt-poverty/.
Equatorial Guinea became: In 1999 the World Bank demanded, in exchange for loans to help build a 665-mile pipeline that would deliver Chad’s oil to an export terminal in Cameroon, unprecedented guarantees that Chad’s corruption-plagued government would use the revenues for development projects. Almost as soon as the oil began to flow, Chad’s government began to flout the agreement, diverting revenues to weapons purchases. In 2008, the World Bank officially withdrew its support for the project, but the withdrawal had no practical effect on the flow of oil and money, as the pipeline was fully operational by then and did not need further support from the bank. See “World Bank Pulls Plug on Chad Oil Pipeline Agreement,” by Lesley Wroughton, Reuters, September 9, 2008. The bank said in a statement, “Regrettably, it became evident that the arrangements that had underpinned the bank’s involvement in the Chad/Cameroon pipeline project were not working.”
Equatorial Guinea may be: My account of the history of Equatorial Guinea is drawn from a number of sources, including Max Liniger-Goumaz’s A l’Aune de la Guinée équatoriale, Robert Klitgaard’s Tropical Gangsters: One Man’s Experience with Development and Decadenc
e in Deepest Africa, and Adam Roberts’s The Wonga Coup: Guns, Thugs and a Ruthless Determination to Create Mayhem in an Oil-Rich Corner of Africa.
At Black Beach Prison, Obiang: See Roberts, Wonga Coup, p. 41.
Macias was sentenced to death: See Roberts’ Wonga Coup, p. 39.
One of his aides: See Ken Silverstein, “U.S. Politics in the ‘Kuwait of Africa,’” Nation, April 4, 2002.
“Has just devoured”: See “Where Coup Plots Are Routine, One That Is Not,” New York Times, March 20, 2004.
At the outset, the American companies: See IMF report issued in October 1999, “Equatorial Guinea: Recent Economic Developments,” p. 18. Copy posted at www.imf.org/external/pubs/ft/scr/1999/
cr99113.pdf.
He bought, for $55 million: See “Teodoro Obiang s’offre un palace volant,” Afrique Centrale, January 10, 2004, and Roberts, Wonga Coup, p. 51.
His indulgences were almost modest: See “Malibu Bad Neighbor,” L.A. Weekly, January 18, 2007.
For a weeklong Christmas cruise: For a dispatch on the cruise, see New York Daily News, August 16, 2006.
It should be noted that Teodorin’s official salary: For details on Teodorin Obiang’s salary and other financial details, see the written testimony of Arvind Ganesan, of Human Rights Watch, to the U.S. Senate Committee on the Judiciary Subcommittee on Human Rights and the Law, September 24, 2008. Copy posted at www.judiciary.senate.gov/hearings/
testimonycfm?id=3572&wit_id=7452.
More than a decade after: On malnourishment, see “The Boom That Only Oils the Wheels of Corruption,” by Cesar Chalala, International Herald Tribune, August 6, 2004.
“The staggering increases on paper”: See Jedrzej George Frynas, “The Oil Boom in Equatorial Guinea,” African Affairs, volume 103, number 413, p. 540, published in October 2004.