Africa: The Next Victim in the Quest for Cheap Oil

By Scott Thill · 14 Jul 2008

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Picture credit: Azrainman
Picture credit: Azrainman

Whether or not we have fully arrived at peak oil can be left to the nitpickers and bean counters to decide. What we know for sure is that the cost of black gold has exponentially risen in just a few short years, and the global economy it is built upon is currently straddling a razor waiting for the inevitable slice. That final cut may come from Nigeria, where all the major oil companies have done business, dirty and otherwise, for the last five decades, degrading the environment and depressing the general population along the way.

That disturbing feedback loop is the subject of the new book Curse of the Black Gold: 50 Years of Oil in the Niger Delta, which juxtaposes the arresting graphics of award-winning photojournalist Ed Kashi with the geopolitical insights of UC Berkeley professor Michael Watts to present Africa's most populous nation as a possible epicenter for the full-blown resource wars to come.

They are wars that are already well under way. In mid-June, a Shell facility was attacked by local militants, disrupting production and sending the already sky-high price of oil to further heights before coming back online a week later. Attacks like those have increased in frequency, as Nigerian factions have fought for control of the nation's lucrative petroleum resources, which are the largest in Africa.

The problem, especially as indigenous populations caught between Nigeria's prosperous rich and their oil industry's environmental devastation see it, is that viable land and resources have been wasted on a handful while the majority of the country falls into further disrepair and depression. From natural gas flares and oil spills to the destruction of native plants, animal species and other salable commodities, Nigeria's oil industry has wreaked havoc across the land and its people.

And it's only getting worse. And if you think it doesn't affect America, think again.

"The United States has been concerned with its own post-1945 global oil strategy, involving Saudi Arabia, Iran and Venezuela," Watts explains in our interview below. "But this strategy has fallen apart, and now Africa plays a key role at a time when oil is beyond $100 a barrel."

It is a role that will only expand, as increasing demand, ass-backward environmental policy and diminishing resources send nations and multinationals scattering for control of what's left of Earth's black gold. America's disastrous war in Iraq is one example of this panic at work. President Bush's 2006 plan to establish the United States African Command (AFRICOM), an ominous Department of Defense program to network operations and combatant command across the African continent, is another such example, especially since not one African country has come forward to offer America permission to build a base on its territory. For now, AFRICOM is on the outside looking in on Africa from a base in Germany, an arrangement that can be seen both as a geopolitical reality and as a suitable metaphor for U.S.-African relations throughout history.

But the United States won't be outside Africa for long, as climate crisis and peak oil take further hold. And when it comes calling, it will most likely call on Nigeria first.

Scott Thill: What is the nature of Nigeria's oil industry, and when did it get started?

Michael Watts: Commercial oil production began in 1956, and the first exports in 1958. Since that time, perhaps $600 billion in oil revenues have been accrued by the Nigerian government. The government takes a share through a legal joint venture contract with the international oil companies of about 80 percent of the value of each barrel of oil. Since oil accounts for 90 percent of all Nigerian exports and 80 percent of government revenue, and about half of GDP, oil is the Nigerian economy. The country is a classical petro-state dependent upon one resource. The book shows how this vast wealth has been stolen: Estimates from the World Bank vary from $100 (billion) to $200 billion. It has also been wasted. The International Monetary Fund says that oil has probably not added to the standard of living of average Nigerians. This is a stunning indictment.

ST: What has been the ecological impact, especially to the immediate region?

MW: The ecological impact has been felt in the Niger Delta, which is the oil-producing region. According to the World Wildlife Fund, it is one of the most polluted places on the face of the Earth. Nigeria has the highest gas flaring rates in the world; until recently, over 80 percent was flared as a product of drilling. The consequences for carbon emissions, air pollution and public health are severe. Plus, there are roughly 300 oil spills a year, and over 7,000 since 1960.

ST: Between conflict in Africa and the Middle East, this battle is going to heat up as peak oil and climate change kicks in. When do you see that happening?

MW: The future of Nigeria and the Niger Delta in the short and medium term will be that more oil and gas will be produced. There are perhaps 40 more years of oil left, much of that offshore in deep water, and the government and oil companies will continue to produce it at high prices.

ST: What's America's stake in the region?

MW: Nigeria is a major supplier to the U.S. market, as well as a major plank in America's energy security policy. The Gulf of Guinea in West Africa is a major new oil supply area in the context of the instabilities in Venezuela and the Middle East. It will be business as usual. And the establishment of AFRICOM is part of the U.S. interest.

ST: But AFRICOM is entering enemy territory, is it not?

MW: We document in the book how the consequences and costs incurred by the oil-producing region over the last 30 years, including neglect and marginalization by the federal government, have produced resistance to both the industry and government from below. Since 1999, it has developed into something like an oil insurgency led by militant groups. So the future of oil in Nigeria is now in question in an unprecedented way. As we speak, something like 25 percent of Nigerian oil is locked in or deferred because of the attacks by militants. Can the companies and the government operate under these circumstances, in which oil workers are taken as hostages and federal forces cannot control the fields?

ST: It seems that this is precisely why AFRICOM was launched.

MW: The insurgents have shown that they can close down the industry. The new government in 2007 was expected to enter into negotiations with the militants, but that has broken down. So the future is very much an open question. If Nigeria were to enter into a deeper conflict, the implications for the world oil market and oil producers would be catastrophic.

ST: What drew you to this project?

MW: I have worked in Nigeria as a scholar for 30 years and written about oil issues. I drew Ed Kashi into the project several years ago, and he realized that there was an important and untold story here about African oil, its growing global significance and the costs of oil-based development compounded by geostrategic interests by global powers. The story has since forced its way onto the pages of the international press, first with the struggles of Ken Saro-Wiwa and the Ogoni people in the early '90s, but mostly since 1998 when these popular struggles assumed a militant cast. With the emergence of Movement for the Emancipation of the Niger Delta (MEND) in 2006, it has become clear that the Nigerian, and African, oil story is of enormous consequence.

ST: Is Africa the unsung warrior of our resource wars?

MW: The United States has been concerned with its own post-1945 global oil strategy, involving Saudi Arabia, Iran and Venezuela. But this strategy has fallen apart, and now Africa plays a key role at a time when oil is beyond $100 a barrel. So yes, the African oil story -- the consequences, the oil companies, the geopolitics -- all of this is largely an untold story.

ST: What have you learned from your experience on the book?

MW: I have learned several things. The first is that oil is not always a curse, meaning that oil dependency does not always produce poverty or conflict or corruption. It did not in Norway or the U.K. But vast oil wealth captured by oil-producing governments always places the question of how that wealth is to be allocated and spent at the center. If oil is inserted into a corrupt federal system, then the combination of non-transparent Big Oil and authoritarian Big Government produces a perfect storm of violence, corruption, ecological destruction and poverty. And this storm will have a huge blowback.

ST: Are you hoping your book prepares us for that blowback?

MW: I hope that this book lays out the dynamics of oil and development in Nigeria and Africa, that it reveals the complicity in this perfect storm of international oil companies, foreign governments, corrupt oil-producing states and U.S. consumers. Perhaps in the same way that the "blood diamonds" issue showed our complicity and need to assess the conditions under which the resources we use are produced. In a sense, this book documents "blood oil."

I hope that the book will contribute in some way to the struggle in Nigeria for a more democratic and transparent political system in which oil wealth can be deployed for productive purposes in a socially and ecologically just way. I also hope it contributes to a much wider debate in the U.S., and everywhere else, about the consequences of dependency, as well as the vast costs of hydrocarbon capitalism.

By Scott ThillThis article originally appeared on the Alternet website. SACSIS cannot authorize its republication.

You can find this page online at http://sacsis.org.za/site/article/139.1.

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