Revenue Watch Talks with Journalist Peter Maass About the "Twilight of Oil"

	Author Peter Maass talks with RWI Director Karin Lissakers AUDIO: Hear audio of the November 11 event ...

On November 11, the Revenue Watch Institute hosted journalist Peter Maass, author of the new book Crude World: The Violent Twilight of Oil, for an afternoon conversation with RWI Director Karin Lissakers. Crude World is a reporter's foray into many of the countries that have come to represent the so-called "resource curse," such as Nigeria, Equatorial Guinea, Kazakhstan and Azerbaijan—countries where the discovery of mineral and hydrocarbon reserves has resulted not in greater prosperity, but rather in increased corruption, poverty and environmental degradation.

A diverse range of attendees, including journalists, investors and activists, came to the Open Society Institute to hear the dialogue between Maass and Lissakers. Building on the rich reporting and observations acquired over the last eight years working on this book, Mass shared his experiences trying to talk to the Saudi Arabian ministry of oil to ascertain the true state of Saudi oil reserves; witnessing the influence of Chinese oil companies in Equatorial Guinea; traveling through Nigerian communities perched just across the river from oil extraction sites and illegal natural gas flares; and discussing the role of American companies with oil executives in Ecuador.
 
Lissakers and Maass both discussed criticisms of the term "resource curse," which Maass said can obscure the many distinct effects that oil exploitation has on a country. "One of the things I said in the book, with great apologies to Tolstoy, is that every dysfunctional oil country is dysfunctional in its own way. This gets a bit at the resource curse question," explained Maass. While the resource curse frequently refers to the foundational study Jeffrey Sachs published in the 1990s, many have argued that applying the lessons of this study becomes complex when the widely varying economic, political and environmental outcomes of resource extraction are considered. Like the proverbial onion, Maass said, parsing the complexities of what oil does to a nation "just gets more complicated the deeper you get, or the more layers you pull back."

Maass' broad conclusions about the oil industry are quite pessimistic or "grim," as Lissakers noted.  Maass felt that some countries, such as Nigeria, have been mired in the effects of the "resource curse" for too long to easily effect improvements. Maass explained he "would not want to be the Shell director of community relations [in Nigeria], because that company, though implicated in creating that environment, is now in an environment where it's almost impossible to get successful community programs off the ground."

He suggested that countries that have been marked by conflict or repression of civil rights but which are newer to extraction, such as Equatorial Guinea or Azerbaijan, may fare better for having less experience with the culture of corruption and environmental and political degradation that oil exploitation can bring. However, Maass acknowledged that good faith efforts to fight bribery and enforce existing laws could bring about change and improved governance in time. Maass also spoke about his strong prescription at the end of Crude World for moving beyond "oil addiction." He argued that both countries importing large amounts of hydrocarbon resources, and those exporting countries that have become "addicted" to the sale of oil and the economic and political systems surrounding it, will need to become less dependent.

Asked whether or not he had come across any oil-producing countries that gave cause for hope, Maass admitted forgoing descriptions of global "bright spots," such as Norway, in order to better illuminate the problems that often plague oil-producing nations for mainstream audiences unfamiliar with the issue. Maass also noted that he considers Norway, which has famously put its oil wealth to good public use and reserved some of its earnings for future generations, an outlier among resource-rich nations, most notable for the institutions that made its experience so different from the majority of resource rich countries. "Norway, as we all know, found democracy before it found oil," said Maass, "and that was absolutely crucial in terms of having open, strong civic institutions of democracy where people could peacefully decide how the oil money would be used and then could oversee what was done with it. …These are just conditions that don't exist in Equatorial Guinea."

Furthermore, said Maass, too often the good example of countries like Norway have not resulted in change in countries that still suffer poor transparency and accountability from both companies and government. "We've learned the lessons; we don't even need Norway to know what to do," said Maass. He described his interest in reporting on Equatorial Guinea's newfound oil reserves as a "Petri dish" that could demonstrate how a country might incorporate the lessons of combating the "resource curse." "I wanted to know, what happens now, when a country gets oil and the world knows what should be done. The answer in Equatorial Guinea, as it was in Chad, is that it doesn't matter. These lessons are not being applied."

But for his skepticism about countries' desire to implement the lessons of poor resource management, Maass maintained that the movement for resource and revenue transparency is "absolutely key" to improving outcomes for resource-rich nations worldwide, including the importance of publicizing revenue flows, fostering political democracy and openness. Speaking with RWI, Maass noted that the campaigns for the international Publish What You Pay coalition and the Extractive Industry Transparency Initiative had made significant strides over the past decade, and he was also heartened to see growth in local initiatives both in countries such as Nigeria, which has been hard-hit by resource mismanagement, as well in the U.S., which this September introduced important new proposed resource regulations in the Energy Security Through Transparency Act.

Mass concluded on a hopeful but cautious note: "These are big problems, and it will take decades to turn around in their entirety. But there are much greater signs of progress than when I started working on this book years ago."

AUDIO
Hear audio of the full Novmber 11 event with Peter Maass and Karin Lissakers.

LEARN MORE

• Crude World by Peter Maass (Knopf)
• Audio: The Oil and the Glory