Review: How the oil industry corrupted democracy

Random House, £20

Review by Jamie Maxwell

Last year, following an exhaustive 22-month investigation, Special Counsel Robert Mueller concluded that Russian interference in the 2016 US Presidential election had been “sweeping and systematic.” In her new book, Blowout, American journalist and MSNBC anchor Rachel Maddow argues that oil was the key motivating factor behind Moscow’s 2016 strategy.

According to Maddow, Vladimir Putin wanted someone in the White House who would lift the economic sanctions imposed on Russia by the West following the Kremlin’s illegal annexation of Crimea in 2014. Those sanctions scuppered a deal agreed two years earlier between Putin and the US energy giant ExxonMobil that would’ve opened up Russia’s Arctic territories to major new oil and gas exploration projects.

Hillary Clinton, a long-time foreign policy hawk and critic of the Putin regime, was never going to reverse Washington’s adversarial stance towards Russia; Donald Trump, a combustive and unpredictable reality TV star with a notorious weak spot for flattery, just might.

The warning signs started to blare for Maddow when Trump appointed Rex Tillerson as Secretary of State in February 2017. As CEO of Exxon between 2006 and 2016, Tillerson had developed a close relationship with Putin and even earned himself a prestigious Russian state honour – the ‘Order of Friendship’ – as a reward for his “contribution” to the country’s carbon sector. The Texan oilman, who had no formal political experience before taking office, also happened to be a staunch opponent of Western sanctions.

In total, the value of the 2012 deal agreed between Exxon and Putin was thought to be in the region of $500bn – by some estimates, the largest and most lucrative oil contract in history.

And Russia needed that contract to go ahead, Maddow contends: few countries rely more heavily on resource extraction as an engine of economic growth. Oil and gas accounts for half of all Russian federal spending and up to three-quarters of Russia’s export revenue.

In the absence tax receipts from hydrocarbons, the Russian economy might be at risk of grinding to a complete halt – which is the last thing Putin, who is acutely conscious of any prospective threats to his domestic political authority, would want.

“Sanctions, again and again, are the core issue,” Maddow writes. “The boring and insistent thing at the centre of all these intriguing contacts and overtures that everyone in Trump’s orbit tried to keep so secret during Russia’s extraordinary intervention in 2016.”

Blowout delves deep into the murky relationship between Exxon, the Trump administration and the Kremlin, and Maddow builds a robust defence of her underlying thesis: that Russia meddled in American democracy for fairly mundane economic reasons rather than far-reaching ideological ones.

But her analysis doesn’t end there. Maddow takes aim at the distorting political influence of the entire oil and gas industry, highlighting, in particular, the deleterious effects of the so-called ‘resource curse’: the uncanny capacity of fossil fuels to corrupt and impoverish almost any community that comes into contact with them, regardless of size or geo-strategic significance.

Alongside those of Russia, the recent experiences of Oklahoma – a small southern state of just 3.9 million people – offer a striking illustration of this curse in action. In the wake of the 2008 financial crisis, oil and gas companies lobbied to deregulate hydraulic drilling for natural gas – or fracking – as a means, they claimed, of boosting Oklahoma’s flagging regional economy.

But the promised economic benefits of the fracking boom never materialised and the geological impact of hydraulic drilling – a process that involves mechanically fracturing underground rock formations in order to access subterranean gas deposits – turned out to be disastrous. In February 2016 alone, tiny, landlocked Oklahoma registered “more than a hundred 3.0 earthquakes or above,” Maddow writes, even “outpacing California for seismic activity.”

And just to add insult to injury, America’s all-powerful oil and gas monopolies managed to negotiate system of tax rebates from local politicians that left the state’s accounts “depleted” and spending on core public services “shrivelled.”

“The real genius of the [fossil fuel] industry is the magic trick it does,” Maddow says. “It uses the highly remunerative prospect of oil and gas profits to hypnotize otherwise sentient landowners and lawmakers and even whole countries into plighting their troth to the drillers … That’s how we get the twin-engines of petroleum-powered government: corruption [and] capture.”

Blowout is an entertaining and provocative polemic that powers along at breakneck speed and fires caustic attacks at the oligarchs and kleptocrats – from Trump, Tillerson, and Putin at the highest levels of state through to billionaire oil executive Harold Hamm in Oklahoma – who keep the fossil fuel industry afloat, by whatever means necessary, in the age of environmental crisis. Maddow, whose MSNBC show is wildly popular on American network TV, and serves as a kind of liberal counterpoint to the hard-right propaganda of Fox News, writes in a folksy, journalistic style that elevates what could have been arid or over-familiar subject matter into something much more exciting.

In so far as the author is trying to convince her readers that the political power of Big Oil has run rampantly out of control and needs to be reined in, she succeeds. The ties she traces between Moscow, Exxon, and the Trump campaign, as well as those between Oklahoma’s pliant political class and its fracking-obsessed corporate elites, are unsettling and deserve to be made public.

And yet, at the same time, Blowout feels strangely disjointed. Maddow clearly set out to write a book about how Russia stole the 2016 Presidential election but ended up writing a different one about how fossil fuel companies have aggressively rigged political systems around the world to their own benefit.

These dual narratives hang together up to a point, largely because Maddow is such an effective and engaging writer. But after a while it starts to feel as though they’ve been awkwardly welded onto the same text. This effect is amplified by the fact that Maddow ultimately decides to pull her punches.

Having spent the first 340 pages of the book railing against the nihilistic selfishness of oil and gas producers and detailing how their interests dominate global politics, she then concludes, in the final 20 pages, that additional democratic “accountability” would be sufficient to contain them.

The battle to limit the damage done by the fossil fuel lobby is “doable, winnable,” she writes. “American oil and gas companies have been allowed to wreak geopolitical and environmental havoc both at home and the world over, which means the menu for starting to fix it is pretty darn straightforward, and features a lot of low-hanging [legislative] fruit.”

It is also worth noting that, despite Trump having almost completed a full term in office, the sanctions that have so dramatically constrained Russia’s petro-economic ambitions remain in place and were even recently extended until the middle of this year.

What’s more, Rex Tillerson is no longer US Secretary of State. In fact, his tenure in that post was one of the shortest and least distinguished in modern American history.

If Vladimir Putin did conspire to launch Trump and Tillerson into office with the aim of resetting Russia’s economic relations with the West, the conspiracy has mostly been a failure. Still, as Maddow ably demonstrates in Blowout, it wasn’t for lack of trying on behalf of the Russian president.