The oil industry is a casino of cash, power and corruption

Dec 17, 2024 Features / Columnists, Peeping Tom

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Peeping Tom…

Kaieteur News- According to MSNBC’s Rachel Maddow in her book, Blowout: “The oil and gas industry is essentially a big casino that can produce both power and great gobs of cash, often with little regard for merit. That equation invites gangsterism, extortion, thuggery and the sort of folks who enjoy these hobbies.”

Maddow brilliantly illustrates how the oil industry operates with little regard for merit, ethics, or sustainability. She says the industry enables a web of exploitative behaviours and destabilising political consequences. Maddow begins by explaining how the oil and gas industry thrives on speculative risks that mimic the unpredictability of a casino. Energy companies drill wells, often spending billions with no guarantee of finding oil or gas. However, the potential payoff is astronomical, making the industry a magnet for both visionary entrepreneurs and unscrupulous players. Maddow argues that the sheer scale of potential rewards—unlimited wealth and influence—creates a climate where ethics and merit take a backseat to profit.

But the author also argues that that the oil and gas industry is not just about cash—it is about power. Controlling energy resources translates to geopolitical influence, allowing countries and corporations to wield enormous leverage over governments and economies. She provides examples of petro-states like Russia, where Vladimir Putin has weaponized oil and gas as tools of dominance. Under Putin’s rule, Maddow describes how the Kremlin has used energy to coerce neighbouring countries and consolidate authoritarian control at home.

Russia’s interference in global affairs, Maddow claims, is funded by oil wealth, making the industry complicit in perpetuating instability and corruption. The annexation of Crimea, meddling in foreign elections, and support for rogue regimes are all tied to Russia’s ability to leverage its hydrocarbon riches. Maddow uses these examples to demonstrate how the oil and gas industry not only enables but actively fuels gangsterism on a global scale.

Maddow does not shy away from exposing how the oil and gas industry’s enormous profits often breed corruption. She delves into the murky dealings of companies and highlights instances where oil companies have bribed officials, manipulated regulations, and suppressed information about climate change. These actions, she argues, undermine democracy. Maddow also explores the concept of the “resource curse,” whereby countries rich in oil and gas often suffer from political instability, economic inequality, and authoritarianism. She explains that the influx of oil revenues can distort economies, concentrate wealth in the hands of elites, and incentivize corruption.

Maddow is equally critical of the environmental costs of the oil and gas industry. In her book, she illustrates how catastrophic oil spills and greenhouse gas emissions lay bare the industry’s destructive impact on the planet. Maddow argues that the industry’s focus on profit at any cost has stymied meaningful action on climate change, putting humanity’s future at risk.

She also critiques the industry’s greenwashing efforts, accusing companies of promoting superficial environmental initiatives while continuing to exploit fossil fuels. Maddow sees these efforts as emblematic of the industry’s willingness to prioritize image over substance. Given the findings and unassailable arguments offered by Madow, Guyanese must critically evaluate the costs and benefits of their burgeoning oil and gas sector, particularly considering concerns about the fairness of the Production Sharing Agreement (PSA) signed with oil companies. The Guyana government’s refusal to renegotiate the deal raises red flags about just whose interests the government is representing. The disparity between the returns to the nation and the profits reaped by the oil companies suggests an imbalance that may border on what can only be described as “gangsterism.” This term captures the possibility of an arrangement where one party holds undue influence, extracting maximum benefits while leaving the other to bear the long-term burdens. Guyanese must confront the uncomfortable question: has the nation sacrificed too much in exchange for too little?

Guyanese must also consider whether the possible power wielded by oil companies over local politicians and the economy is cause for concern. They must question whether there is evidence of political compromises that favour corporate interests over national priorities.  If left unchecked such concessions can compromise democratic governance, creating a climate where leaders prioritize corporate agendas over the welfare of their citizens. Guyanese must be on guard for signs of bribery. And ask themselves whether the short-term gains from oil revenue are worth the loss of erosion of political integrity and autonomy.

Nor can they ignore the environmental risks inherent in oil extraction. The glaring allure of oil wealth appears to blind authorities to the dangers posed to ecosystems and people. Oil spills, flaring, and pollution represent severe threats to Guyana’s fragile environment, including its vulnerable coastline alongside which most of the population live. The mad rush for profit leaves little room for precaution or remediation. Guyanese must ponder whether their natural heritage, public health, economic wealth and long-term sustainability are being sacrificed for fleeting financial gains. In asking themselves whether the industry’s chaos, corruption, and unchecked power outweigh its contributions, Guyanese should also consider if a future without oil’s dominance—one focused on diversified and equitable development—might leave them better off.

(The views expressed in this article are those of the author and do not necessarily reflect the opinion of this newspaper.)

(The oil industry is a casino of cash, power and corruption)

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• blowout, casino, dealings of companies, Peeping Tom, undermine democracy, unpredictability

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