Oil on the Brain | From Oilfield to Gas Station | Lisa Margonelli

It was a simple life and we were simple people, but we were somewhat worried about tankers dumping crude oil on our beaches. It was all a part of WWII, for German submarines were unconscionably sinking what were called "Liberty Ships" just off the Florida coast where we lived.

There would be an explosion off-shore, and for the next six months sticky black stuff would appear on the beaches where it would mix with the sand and leave a tarry residue on our feet which we tracked into the house much to Mother's disgust. As I say, it was a simpler time, a time when we could curse the Germans and their U-boats for screwing up the coastline and the kitchen floor.

Now we get to curse someone else like Exxon for the goo on our beaches and our birds, but the war itself has just been transplanted to another theatre; or rather, several other theatres. Five of which --- Venezuela, Chad, Iran, Nigeria and China --- Ms. Margonelli has been brave enough to visit to regale us in Oil on the Brain. It is a thoroughgoing full-blast report on the world of extraction, the engrossing politics and battles over state and personal sovereignty rights, with the added juice of egregious riches, grand theft, violent politics, highway robbery, secretive operatives, brutal gangs, and international skullduggery.

Some of her well-researched facts:

People unfortunate enough to live near drilling sites pay a price. "In 2004, oil and gas drilling had fouled the water in at least 241 sites in Texas with salt water, hydrocarbons, barium, mercury, chromium, hydrochloric acid, glycol and PCBs."
Venezuela's President Chávez called Bush a "pendejo" on national television in 2004. A week later, he and the head of the state oil company signed an agreement with Chevron Texaco for offshore gas exploration. ("Pendejo" is a term that carries a fair amount of baggage in Latino countries. It means, according to my Larousse, a "coward" or a "jerk." Ms. Margonelli says it can be an "idiot" or a "wimp." Better, Chávez was calling a man named "Bush" a "pubic hair.")
Americans pay a special tax on imported gasoline: the expense of our military presence in the Persian Gulf. "By one estimate," writes the author, "the hidden costs of defense and import spending are the equivalent of an extra $5 for every gallon of imported gasoline."
According to the author, there are about 700 million barrels of oil in the Strategic Petroleum Reserve in four locations along the gulf coast. In normal times, the U. S. uses 350 million barrels each month, so in case of supplies drying up, the SPR would give us but two months of operating time. After questioning several experts, Margonelli suggests that the main purpose of the SPR might be to jiggle the price of Sweet Light Crude futures on the New York Mercantile Exchange. Every time the president tinkers with the reserves, oil futures go into orbit. Outside of that, this unused and mostly inaccessible crude takes up a helluva lot of space in salt caverns located far below the surface of the earth, and provides --- aboveground --- a safe nesting place for the alligators and raptors who live and prosper in the vicinity.
The United States gets more oil from Africa than from Saudi Arabia. Africa has "more undiscovered oil than anywhere else" and the U. S. investment in Africa is "two-thirds to three-quarters ... in energy."
People who are in the business of designing gas pumps for self-service stations try to make them as cuddly as possible. Customers "have warm feelings for ATMs, so the pumps are designed to look friendly" One was "small, sleek, and didn't have any greasy surfaces. It had a soft, rounded belly with an ATM on the front. The pump looked playful, unobjectionable, maybe even meek."

§ § §

Ms. Margonelli follows the gas. She starts with the gas station, moves into distribution, studies the process of refining and drilling, including a bewildering trip to the New York Mercantile Exchange and a riotous chapter on the Strategic Petroleum Reserve.

What she understands she tries, and succeeds, in spelling out for us in language all can grasp. What she sees as mysterious is tufted out with a minimum of mystery. There are some parts of the chain that no one will ever grasp: but she gives us the facts. The facts that she comes up with, rather than being dry and dull, are mixed with such an artful bit of comedy that we don't ever want to put this one down, at least (for me) not until I got to a section that threatened to make me ill. I'll get to that in a moment.

What is crude oil? A stew of hydrocarbon chains, methane, and "sulfur, salts, nitrogen, and metals." What does a refinery do? It is "a molecular butcher, dismembering crude oil and shaping it into smaller, usable components." If this is, shall we say, too crude for us to understand, Ms. Margonelli, will ask on our behalf any and all of an impressive list of questions. At the Strategic Petroleum Reserve, she asks one of the armed guards what oil is: "It smells bad. And it comes out of the ground. Hnff. What more do you need to know?"

Not only does Ms. Margonelli have her facts in order, she knows how to bring us into the strange world she has found herself. These are the traders at the NYMEX, all dressed in odd colors so that when they are in "the ring," yelling at each other, they will be recognizable. The colors? "Red. Green. Yellow like mustard on a hot dog. Turquoise inset with gold mesh."

One man's coat is decorated with images of the 1970s cartoon character Fat Albert. Another's is blue with pineapples and an American flag patch. A slot machine with dice.

At the opening bell, "all of the men in the ring are yelling and punching the air with hand signals. Their cries start as individual human squawks before they're absorbed into a great roaring rug of squall. Using a private sign language of fingers, they communicate prices and batches across the ring to each other."

I stare at the crowd of jumping, screaming men, the phone cords, the news bulletins from around the world scrolling the walls, and I have no idea where to begin. It is as if I have finally entered the central control room for the world economy and found it full of a nonsense of jumping rodents and random headlines generated by a squad of monkeys banging on typewriters.

This is good stuff, and Oil on the Brain is good for the brain (and excellent entertainment). I do confess, as I said above, that there was one place where I had to leave off reading. it came at the bottom of the chapter on the Shah of Iran, who had been jammed into power by the CIA some fifty years ago. This footnote reminded me of The Decline and Fall of the Roman Empire, for there, way below the text, Gibbons would place his most disturbing information, safely out of the way of the all-too-curious.

In the 1970s the United States supported the Shah's plan to build nuclear power plants and a giant grid. The program would have brought $6 billion (in 1976 dollars) to U. S. companies. The Shah maintained that oil was a resource too precious to be wasted on producing domestic electricity and should be reserved for export. According to a report in the Washington Post, President Ford not only bought the arguments, but okayed an agreement to sell Tehran a nuclear reprocessing facility for plutonium in 1976, with the support of Henry Kissinger. Ford's chief of staff at the time was Donald Rumsfeld, who was succeeded by Dick Cheney.