Nature's Evil

In the post-war period, the countries of Western Europe competed in their American-style modernisation, which necessarily meant increasing their consumption of oil. Provided in dollars or in kind, funds from the Marshall Plan helped Europe both to buy oil from the Middle East and to purchase the American assembly lines from which finished cars would roll off to go and fill their tanks at the petrol station. All the same, the European consumption of petrol did not reach the American levels. The tax on petrol in Western Europe is about three times higher than in America and provides about 10 per cent of the revenue of Western European states. The European way of life is based on public – increasingly electric – transport; on small, fuel-efficient cars; on pedestrian zones in town centres and parks on the outskirts; and now on bicycles and electric scooters. None of this would work in most American towns, which are built for cars.

Oil gave super profits, but its production cost remained a mystery. The remoteness of the sites and the regime of secrecy engendered income streams on an unparalleled scale. All this was new: in the coal and manufacturing industries, the production costs included wages, and they were controlled by the trade unions. In 1972, the economist Maurice Edelman calculated that the cost of extracting each barrel of oil in the Middle East was less than 10 cents, and the profit was around a dollar a barrel. Since then, the figures have increased but the ratio has hardly changed. Only a monopoly or its interstate equivalent – a cartel – was capable of maintaining high prices in a growing market. Controlling about half of global supplies, OPEC coordinated both the volume of extraction and oil prices; its influence only increased after the crisis of 1973, when the price of a barrel rose fourfold.

The

oil curse

means that the extraction of fossil fuel puts a brake on political and economic development in a country: paradoxically, oil-rich countries are poorer and unhappier than their neighbours that do not have oil. Where does all that oily income go? Why does it not accelerate development? Why doesn’t this particular wealth bring happiness? In his research on Venezuela – the textbook example of a country ruined by oil – the anthropologist Fernando Coronil introduced the concept of the petrostate. Before the discovery of oil, the weak Venezuelan state got its rent from coffee. With oil, it found a new role as a middleman between the nation – the people and nature in their territorial unity – and foreign corporations. The latter received super profits, and Venezuela became the biggest exporter of oil in the world. The state received profits without lifting a finger. American corporations drilled for oil and exported it, Arab partners in OPEC set the rules of the game, and Cuba provided help with medical services and education – in exchange for oil. Anticipating future profits, the state borrowed still more money, which increased its revenue and exacerbated the looming crisis. The petrostate promised to transform the country – modernise it, make it rich, build factories and hospitals, create universities. None of this happened: buildings were left unfinished; diplomas were a figment of the imagination. State expenditure grew at an extraordinary rate, but the elite turned out to be incapable of managing the country. Industries rarely move closer to oilfields; in contrast to coal, it is much cheaper to send oil to the industries. The economic experiments of the Venezuelan government led to a fall in extraction, hyperinflation and economic collapse; a similar thing had happened in another socialist petrostate – the Soviet Union. Despite having the richest reserves of oil, Venezuela is importing petrol.

While nature remains the source of wealth, the state claims to be the source of progress; and of course it is the state, not nature, that expects thanks from the people. One general after another promised Venezuela peace and justice. Coups changed individual leaders, but they were not the problem. The problem was oil. Amplified by foreign debts, natural wealth turned politicians into magicians who produce ‘progress’ as the star trick of their show. On a wave of success, the state turns into a fetish object; when it fails, it becomes a curse. In oil-dependent countries, the people don’t earn money through their labour, but the state gains income from nature and shares it with the people. Haunting such states, oil is their second, sacred body, more permanent and relevant than the disposable population. 18