DAVE DAVIES, host:
This is FRESH AIR. I'm Dave Davies, filling in for Terry Gross.
The Gulf Coast oil spill was a sober warning about the risks involved in extracting oil and gas from deposits miles under the earth's surface in increasingly remote locations and another reminder that our dependence on fossil fuels comes with a price.
Months before the Deepwater Horizon burned and sank in the Gulf, our guest Peter Maass wrote a book arguing that our relentless pursuit of diminishing oil stocks has visited a host of evils on the world especially in the countries that hold the deposits we crave. Maass argues that in many developing countries, oil breeds corruption, heightens social divisions, increases violence and degrades the environment.
Peter Maass is a contributing writer to The New York Times magazine. He's written for several other national publications and has reported from the Middle East, Asia, South America and Africa. His book is now out in paperback. It's called "Crude World: The Violent Twilight of Oil."
Peter Maass, welcome back to FRESH AIR. Let's talk about Equatorial Guinea. It's a tiny country in West Africa that most people couldn't locate on a map. Tell us just a bit about the country, you know, its size, its geography.
Mr. PETER MAASS (Author, "Crude World: The Violent Twilight of Oil"): Equatorial Guinea is in the Gulf of Guinea, not far from Cameroon and Nigeria. And it's a tiny little country, 500,000 people, if that and basically, it was ignored for the world for quite a long time. It used to be a Spanish colony. It got independent in the 1960s and then, was presided over by a really ruthless dictator who basically committed genocide there and forced out or killed about a third of its population.
In 1979, this dictator was overthrown by his nephew, Teodoro Obiang, who then had his uncle executed in a show trial. And after 1979, Obiang ran the country in a very dictatorial fashion. Nobody seemed to care because it was such a small country.
But then in the early 1990s, an American exploration company found commercially viable deposits of oil in Equatorial Guinea's waters in the Gulf of Guinea and thus, began a kind of a new chapter in this country's history - a chapter that involved a heck of a lot of attention from particularly, American oil companies.
DAVIES: An interesting thing about the country geographically, is that the capital is actually on an island, right, and then there's a little spit of land on the African mainland, right?
Mr. MAASS: Exactly. The capital, Malabo, is on an island called Bioko, and that's the capital. And the mainland, which is a very small portion of territory, is kind of stretched between Gabon and Cameroon. So you have a strange sort of political situation where the government resides offshore, quite literally speaking, but the largest piece of its territory is onshore.
But that, you know, in and of itself isn't kind of the major problem associated with Equatorial Guinea. I mean the problem was that it had no history of democracy or anything close to that. And then once it discovered oil, all of the oil reserves, all of the revenues that came in were basically under the control of the country's leader, Teodoro Obiang.
DAVIES: Yeah, tell us about Teodoro Obiang and his relationship with the oil companies there.
Mr. MAASS: Teodoro Obiang had, for a dictator, a wonderful relationship with these oil companies. They wanted to get at his oil. They were willing to pretty much do whatever he wanted to have done in the way of payments or whatnot. So, the first batch of revenues over a couple of years, about $700 million of revenue, were deposited into secret bank accounts at Riggs Bank in Washington, D.C. As well, Obiang, for purposes of what we believe is personal enrichment, had all these side deals with these oil companies where they would rent buildings and land from relatives of his for extraordinary amounts of money. So, you know, a 14-year-old nephew of the president's, for example, was the legal owner and received revenues of several hundred thousand dollars from one of these oil companies.
So it was a period of marvelous enrichment for him that kind of was blown up in about 2000-2001 when it was discovered that these accounts existed. Riggs Bank had not been filling suspicious activity reports, even though in some cases there was one of the Riggs Bank officials who would go to the Equatorial Guinean Embassy in Washington, D.C. and pick up suitcases of cash and deposit them into the bank.
And around 2002-2001, this was discovered and kind of the hatch was blown off of that. But it didn't really change things in the country itself because Obiang remained the most powerful, the most wealthy. Elections were pretty much of a joke. I mean I think in the ones that began this decade he won about 99 percent of the popular vote. And then in the election that occurred just last year, he won about 97 percent of the popular vote, and he's not that popular of a dictator.
DAVIES: You traveled to Equatorial Guinea, tell us about what you saw. I mean surely, there's enough wealth coming in from the oil revenue to both make the president and his family happy and, you know, at least build some roads, bridges, schools, hospitals. What did you see?
Mr. MAASS: My visit to Equatorial Guinea was a couple of years ago, so things have developed slightly since then in terms of more in the way of infrastructure, according to the people that I've been in touch with about conditions in the country now.
Nonetheless, it remains a country where health, education, welfare indicators are really at the bottom of the rung for Africa, even though on a per capita basis, if like all of the oil revenue were shared equally amongst all the people of Equatorial Guinea, it would be one of the richest countries, not just in Africa, but perhaps in the world.
And so, you had when you go there, when I went there, for example, you know, kind of rutted streets, very bad infrastructure, schools that had no books, not even schools in most villages. Hospitals, for example, I went to one major town on the mainland and they had one hospital and it basically just had a little bit of aspirin and that was pretty much it. It was place not for people to be cured but for people to go and die. And you also still have this very dictatorial situation. I mean I lasted in Equatorial Guinea for just a week, at the end of which I was expelled on charges of being a spy.
DAVIES: Now, I imagine the oil companies, they certainly are under no illusions that Teodoro Obiang is, you know, a democratic leader. They know what he's about and I suppose what they would say is look, we don't make the rules. If we have a product that there's a market for and if we want to do business here, we play by the rules that the local authorities set for us. To what extent are they responsible for or complicit in the kind of corruption that you see?
Mr. MAASS: Well, they have to play not just by the rules of the local government, but also obviously, the ones that prevail in the United States of America as well. And so, that's why you've seen as number of companies, for example, in Nigeria, there was a major scandal over a natural gas facility that was built by a consortium of companies that included Halliburton and other Western companies that were exposed for being involved in massive amounts of corruption and they were brought to book for it.
So, when you're in these countries, you can't just say well, you know, the local dictators asked us for this money or this is the way it operates here. You do have to obey American laws too. They do have a point though, when they say, you know, look, what do you want us to do? We can't, you know, be agents of political change, etcetera.
And what they also say - and this was great - there was this one American oil executive I talked to and write about in the book, who was actually convicted for tax fraud related to payoffs that he apparently had received while negotiating contracts on behalf of Mobil, and he said to me look, you know, if you only want us to get oil and gas from London and Paris because laws there are nice and there's not so much bribery, okay, fine. But then we're going to be stepping over manure in the streets of New York City.
The point that he was making and that a lot of people in the industry make - and it doesn't exonerate them, but it certainly kind of gives you some sort of context - they're saying look, we're just doing what the American government wants us to do, what the American consumer wants us to do. If you don't want us to go to these fairly nasty places and do business there, business in a way that might enrich or enhance dictatorships, fine. But then oil, instead of costing $2.50 at the pump is going to cost $5.00 at the pump.
Now, this doesn't, I think, exonerate them because they still have a moral responsibility, if not a legal responsibility, to act in ways that do not harm the countries that they're operating in. But it does also kind of, I think, make us broaden the spotlight away from them or just outside of them and also to our own government, and also to ourselves.
DAVIES: Now, in Equatorial Guinea you have situation where you have a dictator who rules the country with an iron fist. You also write about Nigeria, which is, of course, a much larger country in West Africa with large oil deposits and operations. But there's been a lot of tribal strife and civil armed conflict there. What's been the effect of oil production and oil wealth on those conflicts?
Mr. MAASS: Well, Nigeria has just been devastated by oil. In the early 1960s, when Nigeria became independent from British rule, and when also it discovered commercially viable amounts of oil, it was actually a very promising country. I mean, it had an educated elite, it had a good forming sector, it had the beginnings of good manufacturing sector and quite quickly the country went into a tailspin. And it's not just because of oil. We have to kind of be clear about this.
You know, when something goes bad in a country where the country is a major oil producer, it's not necessarily all kind of accounted to by oil. There are other factors involved. Nigeria kind of obviously was inherently fragile in the sense of it was composed of a lot of different racial ethnic groups - excuse me, I mean and religious groups that were going to cause problems anyways. But there was, of course, the Biafran War in Nigeria, which was partly related to oil and control over oil resources, so that wasn't the only consideration by far.
But then, once that was over, you had this period in the 1970s or whatever, when all this oil money was pouring into Nigeria and it really wasn't trickling down. I mean so much of it was actually just being diverted into foreign bank accounts of government officials or local bank accounts of smaller level officials that were corrupt at the local level in Nigeria. And so, what you had is a country that actually, after 30 years of oil extraction, by the late 1990s, people realized that Nigeria generally speaking, had become poorer since it found oil.
So, you had a country that was devastated economically and politically because the political culture in Nigeria just became, you know, a kind of carnival of corruption. You had a series of military dictators, the most well-known of all, Sonny Abacha, who died with several billion dollars in offshore bank accounts.
And so, you had a country that was really quite devastated by this legacy of oil extraction to the point where now you had for kind of the last decade in the Niger Delta, which is the heart of the oil-producing region in Nigeria, a kind of undeclared civil war going on over control of these resources because the people who actually live where the resources are based rather than profiting from them, end up suffering the very most. And in the Niger Delta the people there have truly, you know, had their fisheries devastated, their farmland devastated. And so, they've had a series of rebellions, began peacefully but became violent.
So now it's extremely dangerous to travel around there. Oil extractions continues. Oil pollution has just been tremendously awful there because of the incredibly difficult conditions in which the companies operate. They probably shouldn't even be operating there but they do.
And so, the result - and I went into Niger Delta - is that it's, you know, a kind of a, you know, a wasteland of violence and failed-state conditions where you don't in the way of government activity other than army activity against local people in many parts of the Delta.
DAVIES: Our guest is Peter Maass. His new book is called "Crude World." We'll talk more after a break. This is FRESH AIR.
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DAVIES: If you're just joining us, our guest is journalist Peter Maass. He's written a book about the oil industry worldwide and its impacts on underdeveloped societies. It's called "Crude World: The Violent Twilight of Oil."
We should talk about BP. It sort of underwent a transformation in the mid '90s. Tell us about that.
Mr. MAASS: Well BP underwent a, I think we can now assert, rhetorical transformation. In the mid 1990s, when it had then a new chief executive, John Browne, it began a really aggressive expansion and it became kind of instead a second level oil company, really one of the world's largest oil companies. And John Browne, the chief executive at the time, was celebrated for that. I mean he had taken this kind of so-so oil company and really made it kind of a top player in terms of reserves, in terms of profitability, production, etcetera.
And then around 2000, somewhere around there, he kind of embarked on a new fold of activity, which was to make British Petroleum the greenest oil company around. And the transformation that kind of he embarked on was to kind of do away with British Petroleum being as the title of the company. Just have it be BP and have it stand for Beyond Petroleum.
There was a certain amount of skepticism over whether or not John Browne and BP were as green as they said they were, but John Browne did go out and say he was more or less in favor of Kyoto Protocols and he was one of the first major oil executives to admit that global warming was happening and was the result of human activity, particularly the burning of fossil fuels. So he was quite unusual in that regard in the oil industry. But, you know, there were questions at the time, okay, this is very nice rhetoric, but how is this company actually operating? Is it really operating in a way that's different from the oil companies - the other ones?
DAVIES: And what was the company's record on environmental responsibility, on safety, integrity after this transformation?
Mr. MAASS: Well, it rapidly emerged that BP really wasn't any different and, in fact, might not have been even as good in terms of actual environmental operations as its main competitors.
There was, in 2005, an explosion at a BP refinery in Texas City that killed, I believe it was 15 workers and injured many more. And it - the investigations that then occurred afterwards revealed that this explosion was the result of the plant being run with very small budgets, very little investments in new equipment. Workers safety was not terribly well-followed at this place. And it was all the result of a really kind of harsh cost-cutting plan that the company had overall to increase its profitability.
And so this was, you know, necessarily and obviously quite a black eye for the company. And then also, there was a major kind of pipeline problem up in the North Slope of Alaska, where BP's a major operator. A lot of oil was spilled from its pipelines, which - subsequent investigations revealed - where badly maintained and were - had to actually be shut down because they were in such dire need of maintenance and repairs.
And then you had, actually, around the same time, too, you had a trading scandal in which BP traders were found to have been planning the manipulation of propane markets in America. So, it rapidly became quite clear that there was a lot of smoke, a lot of mirrors, but really not much in the way of different behavior, and, in fact, maybe even worse behavior by BP, despite the rhetoric of being Beyond Petroleum and being a green oil company.
DAVIES: I'm interested in your evaluation of their response to the Gulf spill, and whether it would've been any different were it another company.
Mr. MAASS: Well, their response - their initial response was to downplay the extent of the accident, to try to keep information about the accident away. Quite famously, the video feeds that BP had access to from their submersible robots were not made available to the public, or even to Congress, until the company was forced to make them available. And so you had a company that was incredibly in-transparent, that was trying to downplay and to keep people away from the truth about what was happening.
And, you know, one of the things that's been interesting about kind of not only what BP did after the accident, but the reaction to it, is that reaction seems to have been BP's a rotten apple, that, you know, look, the company lied when this accident happened. The company was incredibly reckless in its management of the Deepwater Horizon rig, and that's why the accident happened. It's a rogue.
But actually, as terrible as the company's behavior has been, in my opinion, it's not necessarily that much different from what might have been the case with other oil companies. Because, you know, I mean you need to keep - remember, I think, that quite famously, you know, this repair plan that BP had - or damage control plan, in terms of cleaning up any accident in the Gulf of Mexico - included caring for the walruses that were in the Gulf of Mexico and included kind of the phone number and name of a disaster expert who actually was dead. And this was kind of used to show how, you know, kind of BP hadn't planned at all and wasn't terribly responsive to the needs of - and to its responsibilities.
But then it emerged that, actually, Exxon and other companies had the exact same disaster recovery-type plan, also mentioned walruses which do not, of course, exist in the Gulf of Mexico, also mentioned the same dead disaster expert. So I think that was really interesting evidence of how, although BP provably has the worst environmental and safety record than, for example, Exxon, nonetheless, the other companies are still in the same league in terms of, generally speaking, how they operate, how they would operate, how well they had planned or not well planned for a disaster of this sort.
DAVIES: You know, it's interesting, the last chapter of your book, the one which deals with solutions, is pretty short, because you say it's not like there's any great mystery about a lot of this. We need to cut our dependence. We need to look for alternative energy sources. But you did have one other notion, and that is new transparency in oil contracts, that there is a movement afloat to make the financial arrangements surrounding oil extraction public. Tell us about that.
Mr. MAASS: This is actually something that, whenever you feel pessimistic about the possibilities of change and good things happening, that now one can point to and actually kind of realize hey, that there are things happening that are hopeful. Because one of the ways to diminish the problematic aspects of oil in the sense of the corruption that it can enhance and nurture, is to just have transparency.
If people know how much is being paid for contracts, what the contracts are, where the money's going, etcetera, then it's harder for corrupt rulers to steal. It's harder for companies to bribe. And also, the money that is then kind of known to be flowing one way or the other will be used in a better fashion because people will know how it's being spent. It won't be spent on ridiculous projects, or whatever.
And about two years ago, there was a bill that was proposed in the U.S. Congress called the Energy Security Through Transparency Act, which would require every extractive company - not just in the oil industry, but also coal and other extractive industries - to publish all the payments that they make to foreign governments for the resources that they extract. And, you know, of course, this bill went nowhere in the first year. This is part of the whole transparency movement that began, really, not so long ago. But actually - and this is quite a wonderful thing that just happened in the financial reform bill that passed Congress just quite recently - at the last minute, at the 11th hour, that bill, the transparency bill, was kind of attached to the financial reform act.
And so now, actually, all extractive industry companies that are registered with the SEC - it's not just American companies. It's also most of the world's extractive companies - are going to have to publish if they want to abide by SEC laws and continue operating in American jurisdiction. They're have to publish what they pay to all these foreign governments for their extractive activities. And that's really a quite marvelous and unexpected breakthrough. It's not going to end corruption. I mean, corruption is, you know, one of the oldest endeavors in human history, perhaps. But it's going to make it a lot more difficult for companies and for countries to be corrupt. It's going to give civic groups a lot more information to make sure that oil is not the curse that it might've been up until now.
So it's easy to be pessimistic these days because, you know, the world's a complicated place, and there are a lot of bad things going on. But, you know, just this one little act here - which is so new that nobody really knows kind of what its impact truly is going to be - could be quite a big deal.
DAVIES: Well, Peter Maass, thanks so much for speaking with us.
Mr. MAASS: Thank you.
DAVIES: Peter Maass' book is called "Crude World: The Violent Twilight of Oil." It's now out in paperback, and you can read an excerpt on our website, freshair.npr.org.
Coming up, David Edelstein reviews the new film "Scott Pilgrim vs. the World."
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