My late husband’s family is from Oklahoma: His father came from Illinois, and his mother from Texas. They met in the early days of the state’s history. And while Vida Mae and Justus brought my husband and their other children to California just before the start of World War II, other members of the family remained in Oklahoma. Uncle Cecil was one of them.
As soon as Cecil was able, he began buying up mineral rights to land in Oklahoma. As the owner of the mineral rights on a parcel of land, Cecil had no rights to the parcel itself, only to any minerals that might be underground, including any gas or oil. By the time he passed away in 2005, he had amassed the mineral rights to 60 separate parcels.
However, he shared the ownership of some of those rights with others, so his interest in the mineral rights of a given parcel might only represent 10 percent of the total. And like many others in Oklahoma, those rights tend to be passed down to heirs, which often involves splitting the interest even further. Since Cecil and his wife had no children, his mineral rights were divided among his 13 nieces and nephews. As a result, there are parcels in which I now hold as little as a .000364 percent interest.
After my husband passed away, it fell to me to manage the mineral rights. Since I knew next to nothing about the business, I joined with most of the heirs, allowing a single cousin to negotiate with the landmen. As I learned about fracking and its cost to the environment, I became uncomfortable with profiting from the industry, as meager as those profits were. (Not all of the rights have been leased, and not all of the leases provide income.)
So I asked the cousin what would happen if I refused to lease my share of the mineral rights to the oil companies. He told me that the oil company would probably appeal to the Oklahoma Corporation Commission, which oversees the fossil fuel industry, to “force pool” the unsigned interests. That meant that I would not receive the signing bonus but would be paid royalties based upon my share of the mineral rights. The fossil fuel industry was going to drill, regardless.
Over the last few years I have been selling off my mineral rights rather than profiting from what appears to be a very rapacious industry. Until I read Blowout, I had no idea of just how rapacious the fossil fuel industry is, nor how deeply it corrupts the societies in which it thrives.
By Rachel Maddow
Published by Crown Publishing
October 1, 2019
370 pages
Rachel Maddow serves as the voice of the sane on MSNBC. Frankly, I doubt that there is another broadcast journalist today with her depth of knowledge, curiosity, and appreciation of the absurd. From her website:
Maddow received a bachelor’s degree in public policy from Stanford University. She earned her doctorate in political science at Oxford University, which she attended on a Rhodes Scholarship. She lives in New York City and Massachusetts with her partner, artist Susan Mikula.
Winner of multiple awards for her work, she now hosts The Rachel Maddow Show on MSNBC, as she has done since 2008. I reviewed her first book, DRIFT: The Unmooring of American Military Power, for the Readers and Book Lovers group, here. As I did with Drift, I listened to Ms. Maddow narrate her her latest book, Blowout. There is something special about listening to an audiobook by Rachel Maddow. It is like being able to reside in her universe for a full 15.5 hours.
The book is divided into chapters that examine the fracking industry in Oklahoma, the exploration of the Arctic, the resource curse that plagues nations that are rich in fossil fuels but poor in governance, and the dynamic duo of Vladimir Putin and Rex Tillerson.
Blowout is not just about the oil industry, although that is covered with her trademark thoroughness and black humor. The book has more to do with the corruption that trails after the industry, wherever in the world it goes. Beginning with John D. Rockefeller and his creation, Standard Oil, she traces the discovery of what was known as “rock oil” in 1859 when the first successful drilling took place in western Pennsylvania.
By 1890, 90% of America’s oil was processed through Standard Oil, which early on established the attitudes which persist to this day:
“John D. and his colleagues regarded government regulators as nuisances to be bypassed wherever possible,” says Rockefeller’s estimable biographer, Ron Chernow. “He felt that politicians were basically parasites who would shake down businessmen. I mean, all of this bribery he saw as extortion; that is, the politicians shaking him down, rather than his paying off the politicians….I think he regarded these payments really as a business expense.”
She introduces us to those in America and Russia who have risen to prominence in today’s fossil fuel industry, focusing a great deal of attention on those who operate in Oklahoma, including Aubrey McClendon, great-nephew to Robert S. Kerr, a founder of Kerr-McGee. That name is familiar to most Oklahomans, as it appeared on gas stations throughout the state for years. McClendon began as a landman, whose job it was to persuade landowners to sell or lease their mineral rights for a signing bonus and “the promise of fabulous payouts to come.”
Eventually he formed Chesapeake Energy, which went public in 1993 and became a major player in the growing Oklahoma fossil fuel industry. Chesapeake, led by McClendon, borrowed hundreds of millions to get in on the newly developed fracking techniques to drill for oil from shale.
The beauty of the shale play was that it didn’t require real technical expertise to target the best place to sink a well. You just needed to own the mineral rights to as much land as possible. Once a well was bored down into the layers of shale deep below the earth’s surface, the gas was, as a rule, generously distributed. Pretty much anywhere worked. With the increasingly common techniques of hydraulic fracturing and horizontal drilling, it was kind of hard to come up with a dry hole, or “bust a pick” as one of his competitors liked to say.
But Chesapeake wasn’t the only firm to turn to fracking to produce oil and natural gas. XTO was another producer that had done so well in the field that they were bought out for $30 million by ExxonMobil, which had long stayed away from the fracking industry, feeling that it was small potatoes.
ExxonMobil, led by Rex Tillerson, was more interested in growing its worldwide business by exploiting exploring for oil in places like Equatorial Guinea and Niger and drilling and exporting the oil carelessly, with incidental leaks that drained millions of gallons of oil into virgin lands. As Maddow puts it so succinctly, they were armed with only paper towels and dish soap as tools to clean up the messes created.
The case of the corruption of Equatorial Guinea is a case study in what is known in academic circles as the “resource curse,” that phenomenon that occurs when oil is found in a poor country that does not have a stable democracy to protect the interests of its citizens. The money paid to the nation in bonuses and royalties never seems to make it into the pockets of the people, but is instead siphoned off by the men that head the government, which meant that Teodorin Nguema Obiang Mangue, the son of the ruler of Equatorial Guinea, could own a $30 million mansion in Malibu as well as a private jet worth $38.5 million and a fleet of cars valued at $10 million on a salary of $60,000 a year. Meanwhile, the people of Equatorial Guinea saw almost none of the $3.9 billion in annual oil revenues that went to the nation.
Peter Maass, the journalist who had profiled the head of Russia’s Lukoil, went on assignment in Equatorial Guinea more than a decade into the country’s oil bonanza and returned with a grim report: “Nearly half of all children under five are malnourished. Even major cities lack clean water and basic sanitation….The main hospital is a place for dying, not healing. The wards are dingy rooms with soiled mattresses and no medical equipment except for a couple of IV drips.”
Later in the book, Maddow examines what the industry has done in the state of Oklahoma and how it has for years managed to deprive its schools and its infrastructure, all in the name of profits. But one day, Oklahomans finally said “Enough.” It was a hard-fought battle that the fossil fuel industry actually lost … sort of.
But more interesting (and more timely) is her examination of Putin’s aim of restoring Russia to its pre-breakup of the USSR greatness through the use of its rich reserves of fossil fuels. I don’t know how she planned for this book to drop right in the middle of our growing awareness of the criminal attempts of the current U.S. government to get Ukraine to surrender more of its land to Russia. I am glad she did, though, because it all makes so much more sense now.
Russia provides much of Europe’s natural gas through pipelines that pass through Ukraine. Ukraine also has natural gas waiting to be exploited within its own boundaries. Putin knew that should these resources be developed, it would lead to Ukraine’s complete economic independence from Russia. This could not be allowed to happen.
In less than three weeks, Putin ripped Crimea from Ukraine and took it for Russia. The “exit of Crimea from Ukraine,” the Kremlin claimed, was the result of “complex international processes.” It was the first time since World War II that one country had rewritten another’s borders by force and seized an entire landmass and its people for itself. Putin had blatantly violated Russia’s vow to respect Ukrainian sovereignty, and he didn’t seem content to stop at Crimea. He was already moving his forces toward other oblasts in the east of Ukraine, which also happened to be the oblasts with promising fields of oil and gas.
International sanctions were swift and damaging to Putin, as they were honored by most industries, with the possible exception of—you guessed it—the fossil fuel industry,
… Rex Tillerson had too much at stake. Like potentially hundreds of billions of dollars of deals with Putin’s favorite oil company. ExxonMobil and Rosneft—Igor Sechin’s Rosneft—were just a few months away from spudding their first well in the Russian Arctic. The take there had the potential to fill ExxonMobil’s treasury and its reserves for decades to come. And that’s not even counting Exxon’s cut in all that oil and gas hiding in the untapped shale in western Siberia. Rex still had details of the still expanding partnership to finalize with Igor Sechin, no matter his new standing as an officially designated international pariah.
Meanwhile, back in Oklahoma, earthquake swarms were increasingly being tied to the underground disposal of wastewater from fracking. One of the only good guys in the book is Austin Holland, the geophysicist/seismologist who monitored seismic activity within the state for the Oklahoma Geological Survey, and for whom the final straw was a dressing-down that he received from his boss after Science published his peer-reviewed study titled “Coping with Earthquakes Induced by Fluid Injection.” The dressing-down was triggered by yet another Oklahoma oil man, Harold Hamm, founder of Continental Resources, a drilling firm that had surpassed McClendon’s Chesapeake Energy and pressured Holland’s employer to silence him. Holland quit his work for the state of Oklahoma and moved to New Mexico, where he went to work for the U.S. Geological Survey.
Covering the industry from its 19th-century origins to its position today as an amoral colossus that reaches into every corner of the world, she suggests that being outraged by the oil industry is like ...
… being indignant when a lion takes down and eats a gazelle. You can’t really blame the lion. It’s who she is; it’s in her nature.
She continues:
The nature of Big Oil and Gas hasn’t much changed since its inception at the end of the nineteenth century. The entire point, and therefore the controlling instinct and the base ethos, is to make money—as much money as possible. That’s true in theory for every industry, but the amount of money potentially at hand for producers of oil and gas sets these particular products apart from every other low-tech filthy widget in the world. Combine that with the inherently destructive and polluting nature of production, and you end up in a relentlessly, recklessly driven cost-cutting environment in which it’s probably mathematically worth it to try to get away with almost anything. In the most profit-making industry on earth, there is still no meaningful R&D investment in cleanup technology, nor has there ever been any measurable slowdown in the pace or number of disasters that need cleaning up.
Maddow appears to believe that the industry can be contained through democratically elected governments with regulatory powers that are enforced. Clearly, the current occupant of the Oval Office and his enablers in the Senate are not the people who can get this done. As a matter of fact, Trump has worked since Day One to lift all sanctions on Russia, with an assist from Moscow Mitch McConnell.
If you wonder why Trump has sentenced our allies, the Kurds, to a massacre by Turkey and Russia, and if you wonder why Trump pressured Ukraine to make a deal with Putin that resulted in giving up yet more sovereign ground in Ukraine, you should read Blowout for the back story.