Crude World: the Violent Twilight of Oil

The use of refined petroleum as fuel, which began in the 1850s, freed hundreds of millions of people from the toil of centuries, gave hundreds of millions more a life of ease and plenty, and, by allowing great cities to feed themselves from every corner of the world, multiplied the population of the earth fivefold. Oil also gave the world a new and terrible kind of warfare, rendered great tracts of land uninhabitable to man and beast, and transferred to the atmosphere enough fossilised carbon to threaten the very survival of humanity.

There are signs that the age of petroleum has passed its zenith. Adjusted for inflation, a barrel of crude oil now sells for three times its long-run average. The large western oil companies, which cartellised the industry for much of the 20th century, are now selling more oil than they find, and are thus in the throes of liquidation. For the US magazine journalist Peter Maass, we are in a sort of petroleum twilight in which the search for and extraction of crude oil is becoming daily more difficult, dangerous, corrupt, violent and messy. It is in the nature of international trade to obscure the distant consequences of our actions. Few Californian drivers recognise that their commute begins in the squalor and desecration of Ecuador's Oriente Province and ends in the loss of 4,000 American lives in Iraq. In this short and vivid book, Maass seeks to show them how these things are linked.

Starting off in Firdos Square, Baghdad, where the statue of Saddam Hussein is being torn down, Maass assembles grim evidence of the curse of oil on its producers: in Nigeria, a journey upriver in the Niger Delta, past hideously polluted swamps and Shell's Potemkin villages; in Azerbaijan, the Intourist hotel in Baku in the 1990s; the Daura refinery in Baghdad; a Lukoil board meeting in Moscow; an oil-company town in Saudi Arabia; and in Venezuela the fortress of El Country Club, Caracas.

Oil is of no use to the local poor, because it uses capital, not labour. In one marvellous scene, Maass visits Marathon Oil Corporation's gas-liquefaction plant on the island of Bioko in Equatorial Guinea, where even the paint is imported. "Those are local rocks," says the Texan manager, pointing to the kerbstones, "but importing them would be cheaper."

Maass shows how oil exports cause the local currency to appreciate, sucking in luxury goods that displace domestic industry and agriculture, causing unemployment to rise, and widening the gulf between rich and poor. By a bizarre sort of post hoc, ergo propter hoc, rising oil prices confer unearned laurels on such ordinary men as the late shah of Iran Mohammad Reza Pahlavi or Hugo Chávez in Venezuela. If you possess oil, you do not have to tax your citizenry or seek their consent for indebtedness (Ecuador), a busted ideology (Soviet Union), pig-headed militarism (Ba'ath Iraq), quixotic good works (Venezuela), irresponsible missionary work (Saudi Arabia) or eschatological Bonapartism (revolutionary Iran).

Maass offers a compelling insight into the notoriously corrupt practices of the oil industry. Because crude oil sells itself, and because an Exxon has no technical or commercial edge over a BP, an oil concession is only ever won with a bribe. The slow-motion liquidation of the western oil majors will probably not improve the situation. "The ethical practices of Exxon and Chevron," Maass writes, "might even look good when compared to those of Russia's Gazprom and China's CNPC."

But he cannot be everywhere. There is nothing here, for example, of the dialectical counterpart of his third world havoc - the bored megalopolises of the west, with their obese and depressed populations. He does not visit Norway, where a tight-knit society seems to have withstood the curse of oil. As for the UK, which Maass also ignores, North Sea oil was a disaster because it drove up the exchange rate for sterling, bankrupted manufacturing industry and left the country hanging on the uncertain profits of the City and the forbearance of international capital markets.

The book ends on an optimistic note at a windfarm in the Mojave Desert, close to the base of a Marine Corps battalion that helped topple the statue of Saddam referred to at the beginning of the book. As a means of harnessing the energy of the sun, the windmill is barely more efficient than the oil well, but Maass is surely right to point out that we nevertheless have the means to replace oil.

For all this has happened before. In the 17th century in Spain, men struggled to comprehend why the silver mined at Potosí (in the land now known as Bolivia) had produced not prosperity, but poverty in metropolitan Spain. In the 18th century, an Irish banker named Richard Cantillon wrote the epitaph of both American silver and modern oil.

“When the excessive abundance of money from the Mines," Cantillon wrote, "has . . . raised the produce of the land and the labour of workmen to excessive prices . . . the money purchased by the Mines will necessarily go abroad to pay for imports; this will gradually impoverish the State and render it in some part dependent on the Foreigner . . ."

James Buchan's latest novel, "The Gate of Air", is published by Quercus (£7.99)

This article first appeared in the 02 November 2009 issue of the New Statesman, Mob rule