Introduction
Rachel Maddow's "Blowout" is a scathing exposé of the oil and gas industry, revealing its far-reaching impact on global politics, the environment, and society at large. This book takes readers on a journey through the industry's history, from its humble beginnings to its current status as one of the most powerful and destructive forces on the planet.
Maddow's narrative is both engaging and informative, weaving together complex geopolitical events, environmental disasters, and corporate machinations into a compelling story that highlights the urgent need for change in how we approach energy production and consumption.
The Birth of an Industry
The oil industry's origins can be traced back to a fateful day in 1859 on a Pennsylvania farm. Edwin Laurentine Drake and his assistant "Uncle Billy" Smith managed to drill a hole and force a cast-iron pipe nearly 70 feet into the ground, extracting what was then called "rock oil." This seemingly modest achievement would lay the foundation for an industry that would come to dominate the global economy and shape international politics for generations to come.
The true architect of the modern oil industry, however, was John D. Rockefeller. Through his company, Standard Oil, Rockefeller wrote the playbook for ruthless business practices in the pursuit of profit. His approach was simple yet effective: squeeze out or buy out any competitor that dared to challenge his dominance. Within just two decades, Rockefeller had acquired every major oil refinery in the United States, creating a monopoly that would generate unprecedented wealth.
Rockefeller's business acumen was matched only by his ability to manipulate the political landscape. He treated the bribing of politicians who regulated the industry as just another business expense, ensuring that his empire could continue to grow unchecked. At the peak of his success, Rockefeller's wealth was estimated to be equivalent to $305 billion in 2006 dollars, making him one of the richest individuals in history.
Even when faced with legal challenges, Rockefeller managed to come out on top. A landmark antitrust lawsuit in 1911 led to the Supreme Court finding Standard Oil guilty of creating a monopoly through unfair business practices. However, the ruling only succeeded in dividing Standard Oil into smaller companies, all of which remained under Rockefeller's control. Ironically, this division actually increased Rockefeller's wealth, as the combined value of the smaller companies exceeded that of the original monopoly.
Rockefeller's legacy extended beyond his personal wealth. He instilled in the oil industry a relentless focus on cost-cutting and efficiency. Every piece of inventory was meticulously accounted for, and nothing went to waste. This penny-pinching mentality would become a hallmark of the industry, often at the expense of safety and environmental concerns.
The Shift to Natural Gas
As domestic oil supplies in the United States began to dwindle in the late 1960s and early 1970s, the energy industry turned its attention to natural gas as a potential solution to the looming energy crisis. This shift led to some rather unconventional and dangerous approaches to gas extraction.
One of the most bizarre chapters in the history of energy extraction involved the US government providing nuclear bombs to oil companies in an attempt to maintain a steady supply of cheap energy. This initiative, known as Project Plowshare, was part of a broader effort to find peaceful applications for nuclear weapons technology.
In September 1969, Project Rulison commenced in Colorado, using a 40-kiloton nuclear bomb to create a massive underground cavern in an attempt to release trapped natural gas. While the explosion did stimulate gas production equivalent to about 10 years of conventional well output, it came with a significant drawback: the gas was radioactive, containing krypton-85 and tritium.
Despite the obvious dangers and inefficiencies of nuclear fracking, the US government persisted with two more tests using even more powerful bombs. However, the method never proved commercially viable due to its high costs, messiness, and inability to capture sufficient amounts of gas.
It wasn't until the late 1990s that a breakthrough in natural gas extraction was achieved. George Mitchell, founder of Mitchell Energy & Development Corp., developed a technique called hydraulic fracturing, or "fracking." This method involved injecting a specially formulated fluid, known as slickwater, into deep rock formations to create and maintain fractures, allowing natural gas to flow more freely.
While fracking revolutionized the natural gas industry, it also brought with it a host of environmental and health concerns. The exact composition of fracking fluid remains a closely guarded trade secret, leading to heated debates in federal courts over the potential disclosure of its ingredients and their impact on farmlands and drinking water supplies.
The process of hydraulic fracking involves the high-pressure release of enormous quantities of slickwater – up to 1.2 million gallons at a time. Even if the fluid itself were harmless (which it isn't), a significant portion of it resurfaces after mixing with potentially radioactive or poisonous subterranean elements. While fracking companies attempt to contain or safely dispose of this wastewater, spills and leaks are not uncommon.
The consequences of these spills can be severe. Residents living near fracking sites have reported the deaths of pets and livestock, as well as experiencing symptoms consistent with arsenic poisoning. Tests have revealed the presence of chemicals such as ethanol, butanol, and propanol – known components of slickwater – in areas surrounding fracking operations.
Despite these alarming issues, the oil and gas industry has shown little inclination to address them adequately. Instead, it has focused on maximizing profits while minimizing accountability for the environmental and health impacts of its operations.
Environmental Disasters and Industry Negligence
The oil and gas industry's track record when it comes to preventing accidents and cleaning up environmental messes is abysmal. High-profile disasters like the Deepwater Horizon spill in 2010 have captured global attention, but they represent just the tip of the iceberg when it comes to the industry's environmental impact.
The Deepwater Horizon accident, which occurred in April 2010 in the Gulf of Mexico, resulted in the deaths of 11 workers and the release of nearly 5 million barrels of oil into the sea. This catastrophe highlighted the industry's lack of preparedness for major spills and its inadequate safety measures.
However, such incidents are far from isolated. Just two weeks after the Deepwater Horizon disaster, an ExxonMobil pipeline off the coast of Nigeria released 25,000 barrels of oil into the Niger delta. This spill was part of a larger pattern of environmental degradation in the region, with a 2006 report revealing that 546 million gallons of oil had leaked into the delta over the previous 50 years – an average of 11 million gallons annually.
ExxonMobil, despite its infamous 1989 Valdez oil spill in Alaska, proved woefully unprepared to assist with the Deepwater Horizon cleanup efforts. The company's 580-page spill response plan was revealed to be largely ineffective, with proposed solutions like containment domes and chemical dispersants failing to mitigate the disaster. The industry's reluctance to disclose the ingredients of these dispersants raised further concerns about their potential health impacts on cleanup workers.
The frustration over the industry's inability to respond effectively to major spills came to a head during a congressional subcommittee meeting in June 2010. Congressman Ed Markey confronted industry leaders, including ExxonMobil CEO Rex Tillerson, who admitted that the industry was "not well-equipped to handle [major spills]." This admission underscored the industry's prioritization of prevention over preparedness – a strategy that has repeatedly proven inadequate.
Subsequent investigations into the Deepwater Horizon disaster revealed that the accident was entirely preventable. A combination of factors, including the use of substandard cement to seal the well, inadequate pressure monitoring and control, and faulty backup systems, all contributed to the catastrophe. These findings pointed to a systemic problem within the industry: a culture of cutting corners to save time and money, often at the expense of safety and environmental protection.
The Oklahoma Case Study
The state of Oklahoma provides a stark example of the oil and gas industry's exploitative nature and its prioritization of profits over the well-being of communities and the environment.
During the first decade of the 2000s, Oklahoma experienced a fracking boom as companies rushed to tap into the state's natural gas reserves. Industry leaders promoted natural gas as a cleaner, cheaper alternative to oil, sparking a land-buying frenzy across the country.
While some individuals, like Chesapeake Energy's Aubrey McClendon and oil tycoon Harold Hamm, amassed billions in personal wealth, the state of Oklahoma found itself sliding into an economic and public health crisis. Despite the booming oil and gas industry, state revenue from related taxes plummeted from $1.14 billion in 2008 to $529 million in 2013.
This decline in tax revenue had severe consequences for public services in Oklahoma. Teachers became among the lowest-paid in the country, and many school districts were forced to switch to four-day weeks due to budget constraints. The state's infrastructure began to crumble, with newly constructed schools unable to withstand the tornadoes that frequently threaten the region. In a tragic incident in 2013, seven children lost their lives when a tornado struck their poorly built school.
Despite public outcry and protests from families and teachers, oil and gas industry lobbyists continued to fight against any increase in the state's production tax rates, which stood at a mere 1 to 2 percent. Industry leaders threatened to take their business elsewhere if rates were raised, even though drilling was routinely occurring in states with tax rates of 10 to 12 percent.
The fracking boom in Oklahoma also brought with it a new and alarming problem: man-made earthquakes. Scientific evidence began to emerge linking fracking activities to an increase in seismic activity, with some quakes exceeding 5.0 on the Richter scale. However, instead of addressing these concerns, the industry sought to suppress and deny the connection between fracking and earthquakes.
Harold Hamm, a powerful Oklahoma oil tycoon, went so far as to suggest that scientists investigating the earthquakes at the University of Oklahoma should be dismissed. This blatant attempt to silence scientific inquiry highlighted the industry's willingness to prioritize its interests over public safety and environmental concerns.
The Oklahoma case study illustrates how the oil and gas industry's influence can extend far beyond mere economic considerations. By leveraging its financial power and political connections, the industry was able to maintain favorable conditions for its operations, even as the state and its residents suffered the consequences.
Corruption and International Dealings
The oil and gas industry's problematic practices extend far beyond domestic borders. Companies like ExxonMobil have a troubling history of conducting business with corrupt governments around the world, often turning a blind eye to human rights abuses and the misuse of funds.
A prime example of this can be seen in ExxonMobil's dealings with the government of Equatorial Guinea. Despite the country boasting one of the highest per capita incomes in the world – largely due to its oil revenue – 77 percent of its population lives in poverty. Between 1990 and 2007, as oil revenue skyrocketed from $2.1 million to $3.9 billion, the country's infant mortality rate actually increased, and more than half the population still lacked access to clean water.
While the people of Equatorial Guinea struggle, the country's leader, President Teodoro Obiang Nguema Mbasogo, and his son Teodorin Nguema Obiang Mangue, live lives of extreme luxury. Teodorin, despite an official salary of just $60,000 as the country's minister of agriculture and forestry, managed to move $75 million through US banks, purchasing a luxury estate in Malibu and a $38.5 million private jet. His extravagant spending habits included buying Michael Jackson memorabilia worth nearly $1.4 million and renting villas for $7,000 per night.
When questioned about its role in potentially supporting such corruption, ExxonMobil has maintained that it's not their place to dictate how governments spend their money. This hands-off approach conveniently aligns with the company's financial interests, as Equatorial Guinea represents 10 percent of Exxon's global oil supply and offers some of the most industry-friendly tax and profit-sharing policies in the region.
Perhaps even more concerning than ExxonMobil's dealings in Equatorial Guinea is its relationship with Russian President Vladimir Putin. The story of Russia's oil industry is one of ruthless consolidation under state control. Since the fall of the Soviet Union, various entrepreneurs have attempted to establish independent oil businesses, only to be forced to sell to Kremlin-controlled companies like Gazprom and Rosneft.
These state-owned enterprises, while immensely powerful, are notoriously inefficient and corrupt. Gazprom, which controls Russia's natural gas industry as well as some media outlets, is estimated to lose around $40 billion annually due to corruption and waste. The US State Department has described it as "inefficient, politically driven and corrupt," while financial expert James Grant has called it "the worst-managed company on the planet."
Despite these issues, Russia remains a primary source of oil and natural gas for Europe, and Putin has not hesitated to use this leverage for political gain. In 2006, Russia shut off its gas supply to Ukraine, forcing the country to siphon gas meant for other European nations. This move was part of a broader strategy to undermine Ukraine's potential entry into the European Union and drum up support for a new pipeline that would bypass Ukraine altogether.
Russia's reliance on its oil and gas industry as its primary source of global influence has had far-reaching consequences. With no domestic competition and rampant corruption draining resources, the country has failed to invest adequately in research and development for new technologies or alternative energy sources. This has left Russia dependent on foreign expertise for major projects, such as Arctic drilling – a need that ExxonMobil, under the leadership of Rex Tillerson, was all too happy to fulfill.
The Geopolitical Consequences of Oil Dependence
The intertwining of the oil industry with geopolitics has led to complex and often troubling situations around the world. The case of Rex Tillerson, former CEO of ExxonMobil and later US Secretary of State, provides a clear illustration of how oil interests can influence international relations and potentially undermine diplomatic efforts.
In 2013 and 2014, Tillerson was pursuing a multi-billion dollar oil deal with Iraqi Kurds that would have allowed profits to bypass the central Iraqi government. Despite direct pleas from the Obama administration to abandon the deal, as it threatened to destabilize efforts to build a peaceful coalition among Iraq's Sunni, Shia, and Kurdish populations, Tillerson pressed ahead. This incident highlighted the oil industry's willingness to prioritize profit over geopolitical stability and US foreign policy objectives.
Tillerson's relationship with Russian President Vladimir Putin is another example of how oil interests can complicate international relations. Their partnership, which earned Tillerson Russia's Order of Friendship in 2013, was focused on Arctic drilling. Putin controlled the drilling rights and had access to the world's best ice-breaking vessels, while ExxonMobil possessed the necessary drilling technology and expertise.
This collaboration became problematic in 2014 when Russia faced international sanctions following its illegal annexation of Crimea and involvement in the conflict in eastern Ukraine. Despite being informed by the US government that joint operations with Russian state-controlled oil company Rosneft must cease due to these sanctions, ExxonMobil continued drilling until the last possible moment, announcing a significant oil strike just before the deadline to halt operations.
Russia's aggressive actions in Ukraine not only led to sanctions but also spurred the development of new forms of online warfare. The Internet Research Agency, based in St. Petersburg, began creating fake social media accounts to spread disinformation and sow discord around the world. These efforts included supporting Ukraine's pro-Russian separatists, undermining the pro-EU side of the conflict, and, most famously, interfering in the 2016 US presidential election.
The Russian support for Donald Trump's campaign, while often attributed to Putin's dislike of Hillary Clinton, can be more convincingly linked to oil interests. Russia desperately needs international assistance to sustain and expand its oil industry, and the sanctions imposed after the Ukraine conflict have made this extremely difficult. The infamous June 2016 meeting at Trump Tower between Russian representatives and members of the Trump campaign likely centered around the possibility of lifting these sanctions.
Indeed, one of President Trump's earliest actions in office was an attempt to remove the sanctions against Russia. However, this effort was thwarted by a swift, bipartisan response in the US Senate. Senators John McCain (Republican) and Ben Cardin (Democrat) quickly pushed through legislation that codified the sanctions and made them much more difficult to remove. Despite complaints from both Trump and Secretary of State Tillerson, the overwhelming support for the bill in both the Senate (98-2) and the House (419-3) left Trump with no choice but to sign it into law.
This example of democratic checks and balances working effectively offers a glimmer of hope in the face of an industry that, if left unchecked, would continue to prioritize profits over geopolitical stability, environmental protection, and public health. However, it also underscores the need for continued vigilance and more comprehensive regulations to hold the oil and gas industry accountable.
The Need for Greater Accountability
The oil and gas industry's track record of environmental destruction, political manipulation, and disregard for local communities highlights the urgent need for greater accountability and regulation. While there have been some efforts to increase transparency and responsibility in the industry, progress has been slow and often met with resistance.
One promising initiative that almost came to fruition was US participation in the Extractive Industries Transparency Initiative (EITI). This international effort aims to hold the oil and gas industry accountable for its financial dealings, requiring companies to disclose where their money comes from and where it goes. The US commitment to join the EITI followed a troubling bipartisan Senate report titled "The Petroleum and Poverty Paradox: Assessing US and International Community Efforts to Fight the Resource Curse."
However, early in his presidency, Donald Trump withdrew the United States from the EITI, disappointing those who had hoped for greater corporate responsibility in the extractive industries. This decision was seen as a step backward in the fight against corruption and the promotion of transparency in the oil and gas sector.
The need for stricter regulations and enforcement is clear. The industry's history of environmental disasters, from the Exxon Valdez spill to the Deepwater Horizon catastrophe, demonstrates that voluntary measures and self-regulation are insufficient to protect ecosystems and communities. Moreover, the industry's willingness to do business with corrupt regimes and its role in exacerbating geopolitical tensions underscore the need for greater oversight of its international operations.
Efforts to hold the industry accountable must address several key areas:
Environmental protection: Stricter regulations on drilling practices, waste management, and spill prevention and response are necessary to minimize the industry's ecological impact.
Financial transparency: Initiatives like the EITI should be supported and expanded to ensure that oil and gas revenues are properly accounted for and benefit local populations rather than enriching corrupt officials.
Climate change mitigation: The industry must be pushed to invest more heavily in renewable energy sources and to take responsibility for its role in global warming.
Political influence: Stricter campaign finance laws and lobbying regulations are needed to curb the industry's outsized influence on policy-making.
Human rights: Companies should be held accountable for their complicity in human rights abuses in countries where they operate.
Worker safety: Improved safety standards and enforcement are necessary to protect workers in this dangerous industry.
Community impact: Greater consideration must be given to the effects of oil and gas operations on local communities, including fair compensation for land use and measures to protect public health.
Conclusion
Rachel Maddow's "Blowout" presents a damning indictment of the oil and gas industry, exposing its far-reaching negative impacts on the environment, global politics, and local communities. From its origins in 19th-century Pennsylvania to its current status as a dominant force in the global economy, the industry has consistently prioritized profits over people and the planet.
The book highlights numerous examples of the industry's destructive practices, including environmental disasters like the Deepwater Horizon spill, the exploitation of communities in places like Oklahoma, and the industry's willingness to do business with corrupt regimes around the world. It also exposes the intricate connections between oil interests and geopolitics, as exemplified by Russia's aggressive actions in Ukraine and its attempts to influence the 2016 US presidential election.
While the book does offer some hope in the form of bipartisan efforts to maintain sanctions against Russia and initiatives like the Extractive Industries Transparency Initiative, it also makes clear that much more needs to be done to hold the industry accountable. The oil and gas sector's enormous wealth and political influence have allowed it to operate with minimal oversight for far too long, often at the expense of the environment, public health, and global stability.
Maddow's work serves as a call to action, urging readers to demand greater accountability and regulation of the oil and gas industry. It emphasizes the need for a transition to cleaner, more sustainable energy sources and for a reevaluation of our global energy policies.
As we face the growing threat of climate change and witness the geopolitical tensions exacerbated by the struggle for control over oil and gas resources, the message of "Blowout" becomes increasingly urgent. It is clear that the current model of energy production and consumption is unsustainable, both environmentally and politically.
The book challenges us to imagine a future where energy production does not come at the cost of environmental destruction, political corruption, and human rights abuses. It calls for a fundamental shift in how we approach energy policy, emphasizing the need for transparency, accountability, and a focus on long-term sustainability over short-term profits.
Ultimately, "Blowout" reminds us that the power to change this destructive industry lies not just with policymakers and industry leaders, but with informed and engaged citizens who demand better. By exposing the true costs of our reliance on oil and gas, Maddow's work empowers readers to advocate for a more responsible and sustainable approach to meeting our energy needs.
As we move forward, it is crucial that we heed the warnings laid out in "Blowout" and work towards a future where the pursuit of energy does not come at the expense of our planet, our communities, or our democratic institutions. Only then can we hope to break free from the destructive cycle of corruption, environmental degradation, and geopolitical instability that has long characterized the oil and gas industry.