Blowout summary

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. 

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.

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.

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.

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.

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.

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.

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.