Blowout Summary

“Does it have to be this destructive? Or does the oil and gas industry simply choose to value its profits over everything else?”

The Origins of Oil Dominance: Rockefeller's Legacy

The journey of the oil industry began on a Pennsylvania farm in 1859, with Edwin Drake and his assistant drilling the first successful oil well. What followed was the creation of an industry that would grow into one of the greatest drivers of wealth and power in the world.

John D. Rockefeller turned oil into an empire. By 1875, he owned every major refinery in the United States, effectively creating a monopoly through his company, Standard Oil. Rockefeller's ability to buy out competitors, leverage economies of scale, and control the supply chain set the blueprint for how the oil sector operated—and still operates today.

Rockefeller's meticulous management style ensured no resource went to waste, solidifying the industry's focus on cost-cutting. Though the Supreme Court ordered the breakup of Standard Oil in 1911, Rockefeller emerged even richer, demonstrating how oil's pursuit of profit could trump regulatory supervision.

Examples

• Rockefeller amassed a fortune equivalent to $305 billion in today’s dollars.
• His business practices inspired antitrust laws but still allowed him to retain financial control.
• The focus on cutting costs became industry-standard, even at the expense of safety and transparency.

Fracking's Dubious Beginning with Nuclear Bombs

When traditional oil supplies began to dwindle in the late 1960s, the industry turned to natural gas. However, it faced challenges in extracting gas from deep, solid rock formations. In a wild attempt to solve this, oil companies collaborated with the US Atomic Energy Commission to use nuclear bombs for fracturing rock.

Project Rulison tested this method in Colorado in 1969, resulting in a blast that freed significant quantities of natural gas. However, the byproduct was "mildly radioactive" gas, which proved unsuitable for public use. The exercise raised pressing concerns about environmental and public safety over the desperation for energy extraction.

The failure of these early efforts revealed the extremes to which the industry would go to maintain energy supplies. Despite better technology appearing later, fracking’s origins highlighted a willingness to risk long-term harm for short-term gains.

Examples

• Project Rulison used a 40-kiloton atomic bomb to access gas in Colorado.
• The gas was deemed radioactive, proving commercially useless.
• Subsequent nuclear attempts revealed massive inefficiencies and environmental hazards.

Hydraulic Fracking: Great Profits, Greater Risks

In the late 1990s, George Mitchell developed hydraulic fracking, a technique that made gas more accessible by keeping fractures in rock open using a unique fluid called "slickwater." While this technique revolutionized gas extraction and created billions in profits, it introduced serious safety and health concerns.

Hydraulic fracking releases millions of gallons of fluid, much of which mixes with toxic, even radioactive, materials from underground. This “wastewater” frequently contaminates farmland, drinking water, and local ecosystems. In some areas, illnesses, livestock deaths, and water contamination followed.

Despite growing awareness, the oil and gas industry keeps the exact composition of fracking fluids a trade secret. This secrecy makes regulatory oversight challenging and demonstrates how economic priorities take precedence over public safety.

Examples

• Contaminated water supplies around fracking sites feature toxic chemicals such as arsenic.
• Hydraulic fracking uses up to 1.2 million gallons of slickwater for a single operation.
• Residents near fracking sites suffer from illnesses linked to toxic exposures.

Catastrophic Oil Spills and Corporate Carelessness

Oil spills provide the most visible evidence of the industry's environmental neglect. Whether it’s the Deepwater Horizon spill of 2010 or Exxon Valdez in 1989, these events illustrate how unprepared industry leaders are to manage the damage they cause.

In 2010, BP and ExxonMobil scrambled to contain nearly 5 million barrels of oil leaking into the Gulf of Mexico. Their proposed solutions, like deploying containment domes and chemical dispersants, proved ineffective and led to further environmental issues. Across decades, companies demonstrated little improvement in managing or preventing spills.

Congressional investigations revealed the industry often neglects necessary safety protocols in favor of lowering costs. Unfortunately, this focus on profit maximization continues despite repeated disasters and public outrage.

Examples

• Exxon’s Valdez spill discharged nearly 11 million gallons of oil off the Alaskan coast.
• Cleanup attempts from Deepwater Horizon used undisclosed chemicals that sickened workers.
• Nigeria’s Niger delta sees an average of 11 million gallons of oil spilled annually.

Fracking and Earthquakes: The Oklahoma Case

Oklahoma’s fracking boom during the 2000s brought billions to CEOs but left the state with economic and environmental crises. Fracking causes earthquakes, a fact suppressed by the industry even as complaints and damage claims surged across the state.

In tandem with environmental degradation, state funding for essential services like education plummeted. Oil companies spent millions lobbying to keep taxes minimal while public infrastructure failed. Teachers were underpaid, schools shut down due to lack of funding, and seven children perished in a tornado due to poorly constructed shelters.

Industry leaders like Harold Hamm went as far as to intimidate scientists studying earthquake activity, exerting financial and political influence to silence dissent.

Examples

• Fracking in Oklahoma led to earthquakes above 5.0 on the Richter scale.
• Oil industry lobbying kept state production tax rates to 1–2 percent.
• Between 2008 and 2013, taxes from oil dropped by over $600 million while public services suffered.

Enriching Corruption: The Case of Equatorial Guinea

In Equatorial Guinea, ExxonMobil profits immensely while the majority of citizens live in poverty. Oil revenue increased from $2.1 million to $3.9 billion between 1990 and 2007, yet infant mortality rose, and clean water remained inaccessible for over half the population.

Meanwhile, millions flowed into the private accounts of President Obiang and his son. Teodorin Obiang’s outrageous spending on luxury items, such as Michael Jackson memorabilia and estates, became a symbol of unchecked power. ExxonMobil, however, insists it bears no responsibility for how governments spend oil money.

The disparity between the wealth generated through oil and its impact on global inequality underscores how the industry perpetuates corruption.

Examples

• Teodorin Obiang bought a $38.5 million private jet while earning $60,000 annually as a minister.
• ExxonMobil's contracts represent 10% of Equatorial Guinea’s oil exports.
• Despite billions in oil revenue, 77% of the population lives in poverty.

Putin's Mastery of Gas and Oil Politics

Under Vladimir Putin, Russia uses its energy resources as political leverage, especially against neighboring countries like Ukraine. By controlling state-owned companies Gazprom and Rosneft, Putin ensures the Kremlin manipulates natural gas supplies to exert influence.

For instance, Gazprom halted gas to Ukraine in 2006, creating an energy crisis and framing Ukraine as unreliable to European Union partners. Domestically, these companies bleed billions due to inefficiency and corruption.

Still, the scope of Russia’s oil and gas dominance grants Putin leverage on the world stage. This government-industry synergy reveals how energy resources shape and sustain authoritarian regimes.

Examples

• Gazprom loses $40 billion yearly to waste and corruption per US estimates.
• Putin’s control extends to global partnerships like ExxonMobil’s Arctic endeavors.
• Russia’s energy moves undermine alliances such as the pro-EU movement in Ukraine.

Interference in Global Politics Through Energy

Russia’s meddling in the 2016 US election, often attributed to animus toward Hillary Clinton, aligns closely with its oil sector priorities. Efforts like the June 2016 Trump Tower meeting sought assurances sanctions would be lifted, allowing ExxonMobil-Russia projects to resume.

Social media bots and disinformation campaigns run by Russia's Internet Research Agency aimed to influence elections and public opinion, not just in the US but globally. These efforts destabilize democracies and ensure energy transactions remain favorable.

The connection between resource dependency and geopolitical conflict cannot be ignored. It lays bare how oil profits dictate political decisions.

Examples

• Russia's Arctic drilling ambitions drove its alliance with Rex Tillerson’s ExxonMobil.
• The Internet Research Agency spread election misinformation as early as 2013.
• Sanctions blocked lucrative joint ventures like ExxonMobil's Kara Sea oil field project.

Bipartisan Efforts to Confront Oil Industry Abuse

Despite oil and gas influence, the US Senate showed its capacity to push back. Legislation codifying sanctions against Russia passed with overwhelming bipartisan support in 2017, a rare display of unity aimed at curbing damaging practices.

Efforts like the Extractive Industries Transparency Initiative (EITI) tried to hold corporations accountable for their financial impacts but were later abandoned under Trump’s administration. At its best, democracy shows it can challenge industry excess—but long-term solutions require greater transparency and accountability.

Examples

• A Senate vote (98–2) upheld sanctions against Russia despite Trump’s objections.
• Bipartisan reports highlighted the link between oil wealth and societal harm.
• The US withdrew from the EITI, halting progress toward financial accountability.

Takeaways

1. Advocate for stricter environmental laws to ensure oil companies are held accountable for the full impact of their activities.
2. Support transparency initiatives like EITI to trace how energy revenues are distributed globally to combat corruption.
3. Push for investment in renewable energy to reduce global reliance on destructive fossil fuel practices.