Crude
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How the giant squid, whales, and tuna—along with the rest of the deep-water gang—will respond to the new steel stranger in their midst remains to be seen. FPSO’s steel tentacles, descending into the water column, would represent an evolutionary novelty as anomalous as a fifty-foot-tall furry spider leg plonked in the middle of a playground.
In the United States at least, regulators have studied the potential environmental impacts of deep sea oil drilling, but unfortunately, the studies they have had at their disposal haven’t been the most rigorous. The main environmental research on oil drilling in the deep water of the Gulf of Mexico, for instance, derives from studies that are neither comprehensive nor independent. One was conducted by a researcher working for the U.S. Navy in the 1960s, another by a for-hire consulting firm with no past experience in deep sea. The results of these studies were never published in the peer-reviewed scientific literature. When marine biologists were able to review the studies, they found the works flawed in design and limited in scope.79
Research on the deep sea is expensive and technically difficult. Oil companies can easily charter submersible vessels to check their pipelines and fix their underwater well-heads, but for scientists to charter such subs in order to study deep-sea ecology, they have to spend up to $75,000 per day.80 For biologists, it is an impossible sum.81 Applied deep-sea ecology falls outside the parameters of both the National Science Foundation (NSF) and the National Oceanic and Atmospheric Administration (NOAA), their two main funding sources. In any case, the entire NSF budget for all ocean sciences runs to around $300 million.82 In contrast, the oil and gas industry spends ten times more, about $3 billion, on the research and development that catapults their rigs into the deep ocean.82
When companies do conduct environmental studies, they do it fast and keep costs low. “BP paid for some survey work by commercial firms,” recalls biological oceanographer Bob Carney, who has conducted environmental studies for the Minerals Management Service. Carney was part of the team of oceanographers who discovered the “ice worm,” a flat pink worm that nestles in underwater methane hydrates.83 But commercial science for hire is not the same as an independent study conducted by research scientists. “These are for-profit businesses, their [scientists’] careers are built on getting work done in a timely manner at a good price,” says Carney. “Academics’ careers are built on writing papers that are useful in the scientific literature. Academics, such as myself, would like to ponder for five years, but BP or Shell would want the final report by next Tuesday.”
The lack of solid environmental research on deep-water oil drilling won’t make a big difference in the end, Carney thinks. “Oil is the camel’s nose,” he says. “The fact that deep oil-related studies are equivocal or irrelevant will quickly be forgotten. Proponents of exploitation will simply cite the desired conclusions and use the tally of dollars spent as ‘proof’ that impacts are acceptable.”84 In other words, unless the damage to the deeps is quick, catastrophic, and easily visible to terrestrial humans, nobody will really know about it.
Jake Molloy’s days working on the oil rigs of the North Sea are over, he says. “There is no real maintenance” on the platforms anymore, he explains, when I meet him at his cozy office in a stone building in gray Aberdeen.85 The refurbished flat is plastered with maps of oilfields and rigs. Molloy’s new job is as head of an offshore workers’ union, organizing to improve health and safety in the offshore oil industry.
“It is all reactive maintenance. It is a case of, if it’s working don’t touch it, know what I mean? They only carry out maintenance when the thing shuts down. So we get more platforms being run right at the very limit. . . . Everybody wants to make as much as they can, as quickly as they can, with the least amount of hassle.”
“You can go to bed one night and wake up the next morning and find that the platform has been sold from under you,” Molloy continues.
That is really unacceptable practice in this day and age. If you were working in the town at the shop and went back after your shift to find that there is a new sign and a new owner, you’d be a bit shocked! You’d say, ‘Well, what in bloody hell is going on around here? This company owes me!’ But they can do it offshore and nobody gives a damn, because it operates out of the public eye. The only time the public really thinks about oil is when they are putting a bit of petrol in their car, you know what I mean?”
The seagulls outside Molloy’s window wail mournfully. “If the price has gone up 2 pence, then they don’t like oil companies; if it has gone down 2 pence then they like oil companies! They’ve got no idea of what’s being done to deliver that petrol to the car.”
“We all know there are alternatives out there,” he continues. Molloy says he could tolerate wind turbines instead of oil rigs. The only trouble, he says, is that wind turbines are ugly. Behind him, his computer shimmers with its screen-saving image—a romantic sunset scene, showing an oil rig in silhouette.
CHAPTER SEVEN
The Curse of Crude
THE ACTIVITIES OF the oil industry could be just as ruinous to the people living near the oilfields as the gulls along the shipping lanes, the dolphins under the seismic ships, and the workers on board the rigs. The business of siphoning oil from countries as diverse as Algeria, Angola, Congo, Ecuador, Gabon, Iran, Iraq, Kuwait, Libya, Peru, Qatar, Saudi Arabia, and Trinidad Tobago had, ironically, sent their peoples’ standards of living tumbling downward.1
Venezuela had a functioning democracy and the highest per-capita income on the South American continent before a massive oil boom in the 1970s. By the early 2000s, the country suffered chronic violence and a per-capita income lower than it was in 1960.2 Saudi Arabia, the biggest oil producer in the world, ranks below Romania and Thailand on life expectancy, educational attainment, and income.3 The average Saudi citizen has seen his annual income drop from $28,600 in 1981 to $10,430 in 2004.4
Analysts from relief organizations, activist groups, and even the World Bank had long ago pinpointed the cycle. Oil is struck in some remote underdeveloped country. Oil companies rush in, often driving unfair bargains with hopeful bureaucrats unpracticed at negotiating with multinational companies. As the expensive business of setting up oil infrastructure starts—the building of roads, the installation of processing facilities, terminals, pipelines, and rigs—everyone but the most elite and wealthy of the local region are shut out of the game. Once the oil starts flowing, fabulous riches flow to these elites, consolidating their power even more. Governments step up public spending for ambitious new projects, only to find that volatile oil prices send their projects, half-built, to the dustbin. Then, to make up the shortfalls, many borrow massive sums from bankers, who are only too happy to provide the extra money, as the loans are backed by black gold itself. The countries become mired in debt. Defense spending rises. If violence breaks out, government leaders easily siphon money from oil sales to fuel conflict.
Meanwhile, more sustainable activities (or at least ones not dominated by giant profit-seeking corporations) such as fishing, farming, and the like, atrophy. “It is easier to import food than to produce it if a government has the cash,” Stanford’s Terry Lynn Karl, an expert in oil and development, writes, “and it is far simpler to buy technological know-how than develop it.” Economists call it the “Dutch disease.”
Unless the population is very small and the oil deposits very large, as in Brunei or United Arab Emirates, the distortions in the economy caused by petrodollars bite hard when the price of oil falls or the oil, inevitably, starts to dry up. The local elites would have already consolidated control, and the economy would be in no shape to provide for its people.
In 2002, Shell, Total, and other oil companies extracted almost 250,000 barrels of oil from Gabon every day. Awash in petrodollars, Gabon’s small urbane populace enjoys imported consumer goods, dining on tomatoes from South Africa and potatoes from France. Celebrating their oil-blessed fortunes, the Gabonese were, at one time, the world’s largest per capita
importer of champagne. By the late 1990s, though, Gabon’s oil had started to dry up. Income from export sales started to decline.5 By 2004, the oil hangover had started to kick in. The petrodollars used to buy cheap imported chicken and fish from Europe were in short supply, but the Gabonese had stopped fishing and growing their own food, with just 1 percent of the country’s land under cultivation. By 2004, about half of the government’s income was paying the interest on foreign loans. “People used to say that Gabon was a blessed country—they used to say that this oil will never dry up,” said a Gabonese businessman to the BBC in October 2004. “But now I can tell you that we have lost that former dignity and we are living in poverty.”6
In other countries, such as Angola and Sudan, petrodollars, their numbers shrouded in secrecy by corrupt government leaders and their willing partners in the oil industry, paid for wars. Over 4 million people had been displaced during Angola’s civil war, while Total, ExxonMobil, and BP helped the government pull in between $3 and $5 billion in oil income every year. At least $4 billion had gone missing over the late 1990s, likely into the private accounts of elites, while the Angolan people starved.7 It was a bloody role that had cost companies serious cash in the past. In Nigeria, sabotage of pipelines and other facilities by impoverished locals cost Shell over $1 billion in 1999.8
In 2005, Africa’s oil provided Americans with around 15 percent of their daily oil diet. By 2015, that flow of oil is expected to double, sating 25 percent of the American oil appetite. Much of the oil comes from Nigeria’s Niger delta.9
The 25,000 square miles of flat wetlands where the 2,600-mile Niger River splintered into hundreds of creeks, streams, and swamps before emptying into the Gulf of Guinea was one of the richest lands on earth. The mineral-intense sediments swept in the river’s rush settled out as the water saturated the delta, enriching its marshy soils, which sprouted lush forests of oil palms and mangroves. Every year, one hundred inches of tropical monsoon rain would wash away some of the nutrient-rich sediments. Every year, the Niger River would replenish the land with more.
A diversity of people populated the Niger’s delta, hailing from a range of different clans and ethnicities, speaking dozens of different languages. They harvested periwinkles, crabs, mussels, shrimp, and other ocean creatures swishing into salty marshes and drank the fresh water from the Niger’s rivers and creeks. They planted rice, sugar cane, plantains, yams, and cassava in the fertile soil. The mangrove forests protected their fragile coast, providing the people with fruit, medicine, and materials for rope and carvings.10
By the time oil was found in the delta, the region had been subjugated as a resource colony for outsiders for centuries. The Portuguese had set up a bustling slave trade in the delta in the fifteenth century. Over the following centuries, slave traders kidnapped millions of the delta’s inhabitants to toil on the plantations of the Americas and West Indies. They picked them off around the rivers, including a wide-mouthed one that opened into the ocean, which they called simply Escravos, Portuguese for “slave,” for the slaves the traders bought there for fifteen brass bracelets each.11
In the early nineteenth century, the slave trade was abolished, but the extraction of natural wealth from the Niger Delta to the West continued. By 1856, more than two hundred European companies were shipping off 25,000 tons of the delta’s palm oil every year, used to grease the steel machines in Europe’s factories. Over the next century, control of the delta would change hands but its status as a resource colony for outside exploitation would remain. The British, having asserted their control over the lucrative palm-oil trade by proclaiming the Niger Delta its protectorate in 1865, left the region about a hundred years later, but only after ensuring that the delta would continue to be controlled from the outside. The British forcibly joined the culturally and geographically distinct Niger Delta to the Islamic region to its north, dubbing the conglomeration “Nigeria” in 1914.
When the British left Nigeria in 1960, they handed control over the delta to the Nigerian elites in the north of the country, who, like the colonialists before them, generally looked down on the delta’s non-Muslim, tribal inhabitants. Their attempts to secede were met with a long, violent reprisal, the 1967-1970 Biafran war, which took around 2 million lives. After the war, the Nigerian government transferred all mineral rights and revenue from the delta to the federal military government. “The eastern part of the country, and particularly the Niger Delta and its inhabitants,” write Nigerian journalist Ike Okonta and human rights lawyer Oronto Douglas, “have been treated as conquered territory ever since.”12
With the delta subdued, resource extraction could continue unimpeded. When Royal Dutch Shell had struck oil in the delta in 1956, they converted the old slave ports into oil terminals, and oil companies from around the world descended on the waterlogged delta. According to the industry’s burgeoning mythology, their mission was not much different from the colonial one. By their ingenuity, know-how, and bravery, they were saving the world from barbarism and darkness, providing oil for light, speed, and prosperity.
But unlike the oilfields in the arid expanses of Texas or under the choppy grey waves of the North Sea, the oil patches in the delta were situated under fragile waterways that sustained the livelihoods of thousands of people. Whether it would have been possible to develop such oilfields without massive disruption is unclear. Yet, such questions were probably not on the table. It was the Nigerian military authorities who signed the deals with Shell, Chevron, and others to develop more than two hundred oilfields in the delta’s villages.13
What happened in the village of Okoroba is illustrative. Shell discovered oil in Okoroba in 1991, about a third of a mile away from a village precariously situated between a freshwater swamp and a saltwater marsh. The freshwater swamp provided clean water for drinking and bathing. The saltwater areas, on the other side of the village, provided nutritious, easily farmed and caught shellfish and seafood.
Into this delicate web of waterways, Shell decided to ram a canal that would be wide enough to accommodate their heavy equipment, saving the company crucial time and fuel. The dredging for the canal bulldozed a partially built hospital, coconut plantations, and ancestral graves. Six thousand people in Okoroba lost their cash crops. Piles of mud slowly silted up the life-giving waterways. Then, the saltwater contaminated the fresh waters. The fish died. The drinking water was ruined. As the oil pulsed through the pipelines that criss-crossed villagers’ backyards and garden plots, it leaked out into the soil and the now brackish muddy waters.14 The moist tropical air filled with smoke and fumes from a continuously burning plume of associated gas, constricting the lungs of the people, infesting their skin with rashes, and raining down in an acid that corroded their roofs. In Nigeria, almost 90 percent of the gas that wafted out from oil wells was burned, a perpetual bonfire that environmentalists likened to Dante’s Inferno. The flares are so bright that the delta’s children can’t tell night from day.15
Similar developments transformed much of the rest of the delta. Today, the children of the Niger Delta swim in pits filled with drilling wastes, and their parents scrape together enough money to buy frozen fish, imported to the once-seafood-rich villages.
Yet, the oil itself is just beautiful: light, sweet, low in sulfur, with hardly any polluting impurities. American refineries under the firm hand of the EPA appreciated that and were willing to pay for it, too. And so, despite the growing “unrest” among the people of the delta, and the fact that Nigeria had joined OPEC, the country was “fundamentally a low-cost oil producer,” as a Shell exec explained to the Financial Times in 1999. As such, “it is strategic to the future of the group.”16 Shell’s $14 billion operation in Nigeria was “arguably Shell’s largest and most complex exploration and production venture outside North America.”17
Each oil development in the delta was actually a “joint venture” with the state-owned oil company, but the Western oil companies always operated the fields. The state oil company didn’t have
the expertise. The oil companies were much more powerful than the Nigerian authorities, after all. A single big oil company such as Shell could earn three times more than the entire Nigerian state in a single year. And yet, the government would have to cough up 60 percent of the cost of building and maintaining the oil facilities. If the oil industry wanted some more money for a new installation or improvement, it had only to ask, for the government had no technical ability to double-check the figures.
The ever-present possibility that the Nigerians were being boondoggled probably didn’t bother the military dictators that ruled the country for many of its oil-producing years. The money required for the oil developments came out of the public treasury, while income from oil sales poured into private bank accounts. During the 1990s, Nigeria pulled in about $30 billion a year from oil sales. About $10 billion ended up in the private bank accounts of a single military general, Sani Abacha, and his cronies,18 with Western bankers making their fortunes investing the looted cash.19 On the other side of the ledger, the public coffers ran up a debt of no less than $40 billion.20
And so, despite the billions of dollars worth of oil under their feet, the people of the Niger Delta lived in poverty and darkness. In life expectancy, education, and income, Nigeria rates among the thirty most underdeveloped countries in the world.21 Conditions are worse in the delta. Over two-thirds of the delta’s inhabitants survive hand to mouth without benefit of electricity, pipe-borne water, hospitals, decent housing, or passable roads, as even Shell’s internal documents recognized. In some delta communities, up to three-quarters of the people cannot read or write.22 The casual burning of “waste” natural gas that so ravaged the environs and the people is particularly contemptuous—if the oil companies had bothered to set up facilities to use that gas, it could provide power for not just the entire Niger Delta, but half of the African continent.23 So complete is the theft of Nigerian oil that Nigerians themselves must import petroleum products, and often wait in days-long queues for fuel.24