Nature's Evil

Oil’s main difference from coal is that it is a liquid. Trade is movement, the overcoming of friction, and the resistance of liquids is less than the friction of solid bodies. This is why a calorie of oil energy takes less human labour to produce than a calorie of coal energy. Hundreds or even thousands of people worked in a coal mine – an oilfield needs only dozens or hundreds at most. Thanks to the liquid state of oil, workers stay on the surface to pump it. The oilman’s job is not necessarily less dangerous than the miner’s, but he is more subject to control, more visible, less autonomous. Unlike miners, oilmen rarely go on strike. Working in small teams in remote places, they can easily be replaced.

Petroleum doesn’t absorb moisture or putrefy and can be stored for decades. But it is highly inflammable, and there is always a risk of leaks, spills and fires. Safeguarding the oilfields, pipelines, storage reservoirs and refining factories is of the utmost importance. The price of oil depends not on its production cost but on its protection cost, which includes securing its extraction, transportation and distribution. Whereas in the coal economy the main player was the miner and the main threat was a strike, in the oil and gas economy the main player is the security guard and the main threat is a terrorist attack.

A third feature of oil is that it has always been found far from centres of population – in mountains or deserts, in marshlands or under the sea. This is very different from widely distributed coal, which lent itself to competitive markets that could not be monopolised. By contrast, the extremely uneven distribution of petroleum round the globe favours corporate monopolies, international cartels and, ultimately, entire states which specialise in oil production. The twentieth century was the century of oil, and it translated the geographical unevenness of oil into financial concentration and economic inequality. As the ever-growing flows of petroleum converged with ever-increasing streams of money, the states and banks of the world were more and more dependent on the state and banks of the powerful rivers of capital that had their sources in the oil wells. The abundance of oil, its uneven distribution and the addictive character of its consumption created the optimal conditions for steady economic growth – an ideal combination of the growing production and the growing prices of the chosen commodity. Oil shaped a group of ultra-rich entrepreneurs whom I call oiligarchs . Economic developments on this scale needed and supported the transformation of oil-bearing territories into petrostates . 1 I wish to emphasise this radical transformation of statehood into an oil-pumping Leviathan – a live monster which, as Marx said, converts ‘living labour with dead substance … into value big with value’.

Fountains and pipes

Every country in the world consumes oil, but very few countries extract it. Therefore most oil, unlike coal, has always been exported. Since 1859, when the first borehole was drilled, tens of thousands of oilfields have been found around the world. Few of them are commercially viable, and these productive deposits are nearly all found on the distant peripheries of the world’s empires, which shaped their borders much earlier while pursuing other resources.

Oil gives to mankind with one hand and takes away with the other. Across the countries of the planet, the correlation between consumption of oil per capita and various indicators of human development (education, life expectancy, etc.) is very high. But the correlation between the level of oil extraction and human development is negligible or negative. On average, the citizen of a ‘developed’ country consumes ten times more oil than the inhabitant of a ‘developing’ country. Much oil extraction, however, occurs in ‘developing’ countries, which supply oil to their ‘developed’ partners. This trade is huge: counted in dollars, the volume of the oil trade is ten times larger than the volume of the gold trade and much larger than the trade in any other single commodity. Globally, the presence of oil in a country doubles the likelihood of civil war and increases the likelihood of an authoritarian regime. 2