Blowout Book Summary - Blowout Book explained in key points

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Name: Blowout
Rating: 4.2 (80 reviews)
Author: Rachel Maddow

Rachel Maddow

Corrupted Democracy, Rogue State Russia, and the Richest, Most Destructive Industry on Earth

4.2 (80 ratings)

27 mins

What is Blowout about?

Blowout (2019) takes a deep dive into the murky waters of the global gas and oil industry and reveals just how toxic it is. Author Rachel Maddow looks at evidence of this in the US, along with the corrupt deals being made in Russia and Equatorial Guinea, and makes a strong case for why big gas and oil needs to be held accountable for its actions – before things get any worse.

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Blowout
summarized in 9 key ideas

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Key idea 1 of 9

What’s in it for me? Discover just how toxic the oil and gas industry is.

You’ve probably heard about the Exxon Valdez spill of 1989, not to mention the Deepwater Horizon spill that devastated the Gulf of Mexico in 2010. But did you hear about the oil rig off the coast of Louisiana that toppled during Hurricane Ivan in 2004? As of 2018, it was continuing to leak seven hundred barrels of oil into the ocean every day, threatening to overtake Deepwater Horizon as the region’s worst spill. It’s still leaking today.

But the oil and gas industry isn’t just harming the environment; it’s also encouraging ongoing corruption and the imbalance of wealth and power around the world. This is especially the case in Russia, where that nation has put all of its chips on gas and oil being the country’s primary sources of wealth and power. Despite these troubling problems, the industry continues to generate billions of dollars, and in chasing that money and new sources of gas and oil, it is earning its reputation as the world’s most destructive industry.

In these blinks you’ll learn:

how nuclear weapons were repurposed for the gas industry;
how much one corrupt politician spent on Michael Jackson memorabilia; and
why Russian meddling in the 2016 election was more about oil than Hillary Clinton.

In the United States, oil extraction got going in the late 1800s, with John D. Rockefeller turning it into an industry.

It all started on a Pennsylvania farm in 1859. Two men, Edwin Laurentine Drake and his hired assistant “Uncle Billy” Smith, managed to drill a hole and force a cast-iron pipe sixty-nine-and-a-half feet into the ground. What emerged was called “rock oil,” and it led to an industry that has become one of the most dominant powers in the world.

That day, Drake and Smith got around twenty barrels of oil out of the ground. Fast forward to 2019, and more than 90 million barrels are being produced every single day. How did we get from there to here?

Well, the man who really turned the industry into the one we know today was John D. Rockefeller, the founder of Standard Oil and the guy who wrote the book on how to operate a ruthlessly successful oil business.

In his first twenty years of business, Rockefeller put the squeeze on and bought out any competitor that crossed his path. By 1875, he owned every major oil refinery in the United States. Other men were building up monopolies too, like those that Andrew Carnegie and Philip Armour created in, respectively, the steel and meat industries. None proved as lucrative as oil, though. Rockefeller was making so much money that paying off the politicians who regulated the industry amounted to just another business expense. Estimates suggest that, at his peak, Rockefeller was worth the equivalent of $305 billion in 2006 dollars.

In 1911, a landmark antitrust lawsuit led to the Supreme Court finding Rockefeller and his company guilty of creating a monopoly through unfair business practices. But the ruling only managed to divide Standard Oil into a bunch of smaller businesses, all of them still owned by Rockefeller. As a result, he was able to continue amassing his fortune and ended up richer than ever before.

Rockefeller also left the oil industry with a legacy of making sure no penny went unpinched. He kept a close count of every piece of inventory that was bought and made sure that nothing went unaccounted for or unused.

As the years went on, this focus on keeping operating costs as low as possible would continue to be the modus operandi of the oil industry.

When US oil supplies dried up in the late 1960s, the energy industry turned to natural gas, which it tried to extract through rather questionable means.

Did you know that the US government gave nuclear bombs to oil companies in an effort to keep cheap energy flowing?

It happened in the late 1960s and early 1970s, when domestic oil supplies were dwindling and costs were on the rise. Concerned about keeping a steady supply of low-cost energy coming, oil companies started to look toward natural gas.

Fracking became economical in the late 1990s, though there have been health concerns.

By the late 1990s, the oil and gas industry had more or less given up on fracking. Reaching the shale formations, that deep sedimentary rock that protected the natural gas, was easy enough. But fracturing it and keeping it open in order to let enough gas out was proving elusive. Many US oil and gas companies were instead focusing their efforts on securing foreign oil rights.

But then George Mitchell, founder of Mitchell Energy & Development Corp. – which eventually became part of Devon Energy – developed a kind of “fracking fluid,” which would become known as slickwater. It was injected into fractures to keep them open, in a process that would become generally known as hydraulic fracking. It would revolutionize the industry.

The oil industry is notorious for failing to prevent accidents and for not cleaning up the environmental messes it has made.

Even if you’re not a news junkie, you’ve probably heard about the Deepwater Horizon accident. In April 2010, a series of grievous mishaps on an offshore oil rig in the Gulf of Mexico led to 11 workers going missing and presumed dead and nearly 5 million barrels of oil being dumped into the sea. The disaster got the world’s attention, but it’s far from an isolated event.

Less than two weeks after the Deepwater Horizon catastrophe, an ExxonMobil pipeline off the coast of Nigeria released 25,000 barrels of oil into the Niger delta. But that isn’t exactly unusual either, since a 2006 report showed that 546 million gallons of oil have leaked into that same delta over the past 50 years. That’s an average of 11 million gallons of oil every year.

Oklahoma offers an example of the exploitative and money-hungry nature of the oil and gas industry.

There are many examples of just how much the oil industry values money over the safety and well-being of people, but one of the most vivid examples is in Oklahoma.

Oklahoma is just one of the states that has experienced a boom in fracking operations. Throughout the first decade of the 2000s, land across the country was getting bought up left and right in a mania for unlocking more natural gas. In fact, natural gas was being promoted by the industry as the great salvation: still cheap, and much cleaner and less of a threat to the environment than oil.

The ExxonMobil corporation has a troubling history of looking the other way when it deals with corrupt governments.

Along with using its lobbying power to keep its tax rate as low as possible – even if that tax money is desperately needed – the oil industry has a tendency to do business with some rather shady political players around the world.

Take the corrupt government of Equatorial Guinea, for example. The country has one of the highest per capita incomes in the world, earning an average of $37,200 for every person; much of that money comes from deals with ExxonMobil. Yet 77 percent of the population in the country live in poverty, and between 1990 and 2007, when the amount of oil revenue went up from $2.1 million to $3.9 billion, the infant mortality rate managed to increase from 10 to 12 percent and clean water remained scarce for 57 percent of the population.

The Russian government has been ruthless in controlling its oil resources.

Perhaps even more troubling than ExxonMobil’s dealings in Equatorial Guinea has been its relationship with another world leader who keeps complete control over his country’s oil supply: Russia’s Vladimir Putin.

The story of how Russia’s oil supply came to rest under the thumb of the Kremlin is a long one. Suffice it to say that since the fall of the USSR, various entrepreneurs have tried to launch their own oil businesses. But the successful ones have ended up being forced to sell to companies owned and operated by the Kremlin.

Russia’s reliance on oil resources for its status as a world power has had far-reaching consequences.

In 2013 and 2014, Rex Tillerson was trying to land an oil deal with Iraqi Kurds that would be worth billions of dollars. The deal would ensure that profits were sent straight to Kurdish-run banks and not to the central Iraqi government.

The Obama administration made direct pleas for ExxonMobil to step away from the deal, as it would undermine efforts being made to build a peaceful coalition among the nation’s Sunni, Shia and Kurd populations. As a 2017 New Yorker article pointed out, creating an independent revenue source for the Kurds would only worsen the fractures within Iraq.

The bipartisan efforts in the United States to keep Russian sanctions in place is a sign of hope, but more steps need to be taken.

Arguments have been made that Russian support for Donald Trump’s campaign was due to Putin’s great dislike of Hillary Clinton. But a more persuasive argument can be made to suggest that it was all about oil.

Russia needs international help in sustaining and expanding its oil industry, and the Ukraine sanctions have made getting that help extremely difficult. That’s why Russian representatives met with the Trump campaign in that infamous June 2016 meeting at Trump Tower. The question was: Would Trump support lifting the sanctions if elected? After all, the pending deal to build a Trump Tower in Moscow was also stuck in limbo because of those troublesome sanctions.

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About the Author

Rachel Maddow is a political commentator and host of the long-running and award-winning Rachel Maddow Show on MSNBC. She has a doctorate in political science from Oxford University and is also a best-selling writer whose work includes the book Drift: The Unmooring of American Military Power (2012).

Who should read Blowout?

Citizens worried about the erosion of democracy
Close followers of news about US-Russian relations
People concerned about corporate influence on world affairs

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