[Vision2020] 10-18-04 USA Today Book Review: Oil's slippery slope

[Art Deco aka W. Fox]

Oil's slippery slope
By Barrington Salmon, Special for USA TODAY

If someone sitting in air-conditioned comfort in one part of the world believes 
that what happens in Iraq or Nigeria, Venezuela or Colombia doesn't affect him 
or her, Sonia Shah's Crude: The Story of Oil takes that little daydream and 
shakes it up.
Whether it's a geopolitical conflict or social protest against oil companies or 
the spewing of pollutants into the atmosphere, oil is always seeping into our 
world.

Shah puts it bluntly: We are living on borrowed time.

The supply of oil is, of course, finite. And there is fear that the era of peak 
production - the time when about half of the reserves are gone - is approaching.

In 1999, Goldman Sachs characterized the oil business as a "dying industry."

In 2002, the USA used almost 20 million barrels of oil a day, the global leader 
of consumption. China is in second place, followed by Japan.

Shah, a journalist whose work has appeared in The Nation and on Salon.com, has 
written a book that couldn't be more relevant.

In the chapter titled "Running on Empty," Shah examines the situation in Iraq. 
Saddam Hussein, she writes, was using Iraqi oil as a "weapon to punish his 
enemies."

By February 2003, "He claimed Iraq would double its oil production to 6 million 
barrels a day by 2012," and he said the ones drilling for oil would be Russian, 
French and Chinese companies, Shah writes.

"Then, seemingly out of nowhere, in the spring of 2003, the United States 
invaded Iraq on a flimsy pretext, purporting to rid the broken country of 
destructive weapons," she writes.

Most of the richest deposits of oil and natural gas are to be found in countries 
racked by war, civil unrest and other problems, or in forbidding locations, such 
as the North Sea.

Oil companies have masterfully linked increased oil and energy production as 
"essential to the continued progress, prosperity and well-being of the world's 
citizens," Shah writes.

Yet, she adds, analysts from relief organizations, activists groups and "even 
the World Bank," point out that the standard of living tumbles when oil 
companies set up shop.

Nigeria is a painful example. In the Niger Delta, residents lived in one of the 
lushest places on Earth. Seafood was plentiful and the people who lived there 
were able to sustain themselves.

Oil exploration and extraction destroyed the fragile ecosystem, and in places 
such as Okoroba and Ogoniland, the legacy was the loss of cash crops, dead fish 
and acidic pollutants that tightened residents' lungs, affected their skin and 
eroded their roofs.

Any attempt to fight the oil companies led to bloody reprisals by the Nigerian 
government. While people starved, Shah notes, former Nigerian military strongman 
Sani Abacha and his cronies were able to amass a multibillion-dollar fortune.

And what are we to make of all this? Well, Shah says, oil executives should have 
been preparing themselves and consumers for a new world order in which oil no 
longer rules.

Instead, she demonstrates, oil companies have led consumers on an elaborate 
charade where profits, consolidation of oil empires and market dominance are 
more important than reality.

"An unprecedented crisis is just over the horizon," says former Shell geologist 
Kenneth Deffeyes. "There will be chaos in the oil industry, in governments, in 
national economies. Even if governments and industries were to recognize the 
problem, it is too late to reverse the trend. Oil production is going to 
shrink."

Industrialized countries, which already gobble vast amounts oil, are competing 
with developing countries which, as their economies expand, have an increasing 
appetite for more oil and money.

Shah puts the responsibility squarely on all the policymakers - and consumers - 
but it's unclear who, if anyone, has the will, the courage and the juice to turn 
around this dicey situation.

Shah concludes her book with this Saudi Arabian saying: "My father rode a camel, 
I drive a car, my son rides in a jet airplane. His son will ride a camel."
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