PDF Summary:Blowout, by Rachel Maddow

In Blowout, journalist and MSNBC commentator Rachel Maddow aims to expose the corruption and exploitation underlying the oil and gas industry. Pointing the finger primarily at Russian politicians like Vladimir Putin and American energy magnates like former ExxonMobil CEO Rex Tillerson, Maddow contends that over the past 40 years, the industry has wreaked havoc on the environment, developing economies in the third world, and international relations, especially in Eastern Europe. Ultimately, she argues that only full transparency and strict environmental regulation can protect the planet from devastating accidents and corporate greed.

In this guide, we’ll discuss her evidence for how a handful of companies and politicians have exploited oil and gas reserves worldwide, both for profit and to serve dangerous political ends. We’ll also elaborate on how oil and gas have damaged the environment (perhaps permanently), how American energy policy continued to evolve under the Trump and Biden presidencies, and how Russia’s invasion of Ukraine in 2022 further destabilized the international energy market.

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Maddow argues that even if Obiang was removed from power, the country’s total dependence on oil makes it unstable and prone to further exploitation by foreign companies. Since drill sites require more specialized equipment than manpower, the industry provides only a limited number of jobs for locals, and the equipment isn’t easily repurposed for other industries. In fact, oil drilling makes it harder for other industries to grow by seizing large swaths of land and damaging them to the extent that they can’t be used for agriculture or as building sites. The only way for Equatorial Guinea to escape the resource curse is to diversify its economy by investing in other industries.

(Shortform note: In contrast to Equatorial Guinea, the most stable and prosperous countries on the African continent tend to be parliamentary democracies with mixed economies. Egypt has a significant international presence and a diverse economy, profiting from oil alongside its agriculture, manufacturing, and tourism sectors. While South Africa still struggles with poverty and unemployment, it has well-developed infrastructure including roads and trains, strong mining and energy sectors, and is one of the most technologically advanced countries in Africa.)

The Resource Curse in Russia and America

While the United States and Russia don’t suffer from the resource curse to the same extent as Equatorial Guinea, Maddow argues that corruption and a focus on energy production at the expense of other industries still have a negative impact on these countries’ economies. While energy magnates have become billionaires over the past few decades, the quality of life for people living near oil or gas sites has stagnated or declined.

Even as Russia has become one of the primary energy producers in the world and the main supplier of gas to Europe, death and disease rates are high, the average household income is less than half that of other energy-producing countries like Norway and Saudi Arabia, and public infrastructure like roads remains underdeveloped in many cities. In the United States, while some states have used the profits from the energy industry to pay off debts and improve public services, others—such as Oklahoma—have given energy companies significant tax breaks even while a lack of tax revenue has meant the closure of schools and reduction in safety services that could save lives.

(Shortform note: While oil and gas companies often claim to benefit their local community by being “job creators,” the truth of this is debated. Some studies suggest that the energy industry supports millions of workers in the US alone and grew by the tens of thousands in the 2010s. Others agree with Maddow that these numbers are low compared to other industries and, as a whole, energy production depends on machinery and up-front investment rather than manpower. Interestingly, a 2022 US Department of Energy report suggests that while employment in the industry is growing, most of these jobs are in the production of clean energy rather than in oil or gas.)

How the Energy Industry Hurts the Environment

Maddow contends that oil and gas mining have both had devastating impacts on the environment over the last century, destroying ecosystems, poisoning the people who live near drilling sites, and contributing to climate change. Attempts to regulate the industry have stalled as energy magnates lobby for less government oversight and insist that scientific evidence showing the connection between their industry and environmental damage is either a hoax or ambiguous.

(Shortform note: Maddow doesn’t discuss the connection between cars and climate change, probably assuming that most readers are already familiar with this topic. As a brief overview, burning oil in the form of gasoline releases large quantities of carbon dioxide and other pollutants, which reduces air quality and contributes to global warming. The Intergovernmental Panel on Climate Change has advised that the world must significantly curtail its dependency on gasoline and other fossil fuels within the next 10-15 years or risk serious environmental effects.)

Oil Spills

Oil spills caused by leaks or explosions can dump millions of barrels of toxic chemicals into the oceans, killing marine life and polluting coastlines. The most famous example is the 2010 Deepwater Horizon accident, in which a series of malfunctions caused a BP-Transocean oil rig in the Gulf of Mexico to explode, sinking the rig and killing 11 people. Over five million barrels of oil were released into the water as a result.

Such spills are common, though generally less deadly, and they’re often underreported despite the amount of damage they do. Maddow points out that despite its fame, Deepwater Horizon is not the worst spill in American history, and a similar spill occurred in Equatorial Guinea that same year.

(Shortform note: The actual worst oil spill in US history is the Taylor Energy spill, which began in 2004 but was kept secret from the public until 2010, when scientists monitoring Deepwater Horizon cleanup efforts noticed additional oil slicks in the area. Taylor Energy continued to downplay the severity of the spill even after its discovery, prompting the Coast Guard to take over the cleanup process. As of the early 2020s, it still has not been entirely contained, releasing hundreds of barrels of oil into the Gulf of Mexico each day.)

While the US government has repeatedly condemned companies’ negligence and lack of oversight that lead to such spills, this hasn’t translated into change, as there are still 20 such accidents for every 1,000 drill sites operating each year. Even worse, according to Maddow, neither the government nor the oil companies responsible have realistic plans to mitigate the damage. Cleanup of the Deepwater Horizon spill is ongoing as of the 2020s, and exposure to chemicals may have made many of the people who worked on the cleanup sick. In the event of similar disasters, there’s no way to quickly remove the oil before it significantly impacts the environment around it.

(Shortform note: Wildlife in the Gulf of Mexico continues to suffer ill effects from the Deepwater Horizon spill. Offshore drilling has not stopped in the US but has expanded, and oil companies and environmental activists disagree over whether the industry has enough regulations and precautions in place to prevent leaks in the future. In fact, hundreds of similar accidents have occurred since 2010. As for BP, though the company was sued for damages by the US government, it survived and remains one of the 10 largest oil companies in the world.)

Fracking and Earthquakes

While the dangers of oil production have been known for decades, in the early 2000s gas was pitched as an eco-friendly alternative to fossil fuels. However, as Maddow points out, a series of accidents and slickwater leaks have revealed that the byproducts of fracking can be as harmful as an oil spill. In the 2010s, scientists proved that fracking could even cause devastating earthquakes.

Leaks

While slickwater itself is not especially dangerous, the process of fracking produces a number of toxic byproducts which emerge from drill sites alongside natural gas. This “flowback” water often contains radioactive material, and while some of it can be recycled for additional fracking, much of it needs to be disposed of. Maddow gives examples of how storage and transportation of flowback water in poorly designed tanks has resulted in leaks, poisoning soil, ponds, and farmlands near fracking sites.

Pets and livestock exposed to these waste products have become ill or died, and studies done on two affected families in Pennsylvania found that exposure gave them arsenic poisoning. While most leaks are accidental, in some states, such as North Dakota, gas companies illegally dumped fracking waste products onto Native American reservations or abandoned lots, careless of the effect they might have on nearby communities or water supplies.

(Shortform note: Aside from its waste products that can lead to arsenic poisoning, natural gas itself can be environmentally harmful; methane is a greenhouse gas and recent studies have suggested that the rise of fracking has contributed to global warming. Some gas is always leaked or deliberately burned off during the drilling process, and although methane is reabsorbed out of the atmosphere faster than carbon dioxide, it produces considerably more heat.)

Oklahoma’s Earthquake Crisis

Another way to dispose of flowback water is to inject it back into the earth once the drilling process is complete. Maddow notes that studies done throughout the 2010s found that these injections, which sent millions of gallons of waste product deep underground at high pressures, could cause earthquakes.

Between 1980 and the late 2000s, Oklahoma experienced around 40 earthquakes in total that scored above a 3.0 on the Richter scale. From 2010 on, however, Oklahoma experienced hundreds of powerful earthquakes every year, topping out at over 900 in 2015. Maddow argues that this sudden change can be attributed to a boom in the gas mining industry and the astronomical growth of the local Chesapeake Energy company.

Earthquakes in the United States

The Richter scale measures the magnitude and power of an earthquake, with each 1-point increase representing an increase in size by a factor of 10 (in other words, a 4.0 earthquake is 10 times larger than a 3.0 earthquake). Earthquakes measuring 3.0 are considered mild, with 2.0-3.0 being the range at which earthquakes can be felt by people in the vicinity.

Earthquakes above a 5.0 can damage buildings and cause injuries, and California usually experiences two or three such quakes each year. Alaska, the most seismically active area in the United States, experiences hundreds of earthquakes each year and dozens above a 5.0. Though Oklahoma’s earthquakes never compared to Alaska’s in terms of severity, they approached this level of frequency by 2016, far surpassing the level of activity anywhere else in the continental United States.

Though the connection between gas mining and earthquakes was suspected as early as 2010, according to Maddow, local energy magnates used threats and leveraged relationships with politicians to suppress research that suggested this link. However, in 2016 public outcry led the state government to enforce stricter regulations on gas companies. The Oklahoma Corporation Commission was empowered to shut down drill sites operating near fault lines or seismic activity, and energy companies must allow for real-time monitoring of their disposal operations. Maddow notes that as a result, the frequency of 3.0 earthquakes in Oklahoma has decreased dramatically, with less than 200 occurring in 2018.

(Shortform note: Although restrictions on fracking have reduced earthquakes in Oklahoma, some of the damage is long-term, and the state will continue to experience increased seismic activity for years to come. The fight against fracking and related earthquakes continues in other states and even worldwide, with the first deadly fracking-induced earthquake occurring in China in 2019.)

Russia’s Energy Monopoly and Its Political Consequences

Maddow describes Russia’s energy industry as one of the most corrupt in the world, with President Vladimir Putin using his position to take over private energy companies and redistribute their resources among his allies. His administration’s increased wealth and power has enabled not just Russia’s dominance of the gas industry in Europe but also, Maddow argues, its increasingly aggressive and illegal behavior in Ukraine since the 2010s.

(Shortform note: Maddow’s discussions of Russian interference in Ukraine only mention the annexation of Crimea in 2014 and subsequent war in Donbas, since the book was published in October 2019, before Russia’s February 2022 invasion. In a televised address on February 24, 2022, Putin claimed that Russia was fighting for the “demilitarization and denazification” of an increasingly “anti-Russia” Ukraine. Critics of the invasion argued that it violated both Ukrainian sovereignty and international law.)

Putin’s Monopolization of Russian Energy Production

Putin has been the primary leader of Russia since 2000, serving continuously as Prime Minister, President, or occupying both positions at once. When he was first elected, the country was still recovering from its 1998 financial crisis; his leadership is credited with stabilizing the economy, greatly reducing Russia’s foreign debt and increasing its ability to export oil and gas throughout the world. However, Maddow suggests that Putin has used his position to enrich himself and his allies, such as Igor Sechin, the former deputy prime minister and current energy mogul. Putin’s administration has been repeatedly accused of corruption and using violent tactics to silence critics—such as assassinating Russian physicist and opposition politician Boris Nemtsov in 2016.

(Shortform note: Putin’s administration has always targeted activists, the independent press, and individual journalists. Anna Politkovskaya, who reported on atrocities committed by Russia in the Second Chechen War, was assassinated in 2006. Alexei Navalny, a lawyer and anti-corruption activist, has been poisoned at least once and is currently held in prison indefinitely. Most news organizations are owned by the state, and in 2019 Russia passed the “fake news” law prohibiting the dissemination of “unreliable” or unflattering information—which is often applied to coverage of the war in Ukraine.)

According to Maddow, Putin’s goals for the Russian energy industry, once he took power, were to modernize its equipment and expand its operations as quickly as possible, using foreign investors like Morgan Stanley and ExxonMobil to finance this growth. Today, his administration asserts near-total control over oil and gas production, having slowly consolidated Russia’s equipment and reserves under two state-owned companies: Rosneft, an oil company run by Sechin, and Gazprom, a gas company that is the sole supplier for many Eastern European countries, including Ukraine.

An example of the industry’s corruption comes from Rosneft’s hostile takeover of its main competitor, Yukos, in 2003; CEO Mikhail Khodorkovsky was arrested on what are largely considered to be false charges of tax evasion and fraud, enabling the government to seize the company’s assets and sell it at auction to Rosneft, through a front company for an extremely reduced price.

(Shortform note: The rise of Russia’s oligarchs—wealthy businessmen who have influence in government and use mobster tactics—actually predates Putin, since most of these men made their wealth under President Boris Yeltsin in the 1990s. When Putin took office, he destroyed many oligarchs’ careers to reduce their power, only keeping those who were loyal to him. Aside from Mikhail Khodorkovsky, Putin also seized and nationalized the media companies of Boris Berezovsky and Vladimir Gusinsky, who eventually fled the country.)

Russia’s Monopolization of the European Energy Trade

Maddow argues that Russia has deliberately cultivated a European dependence on Russian oil and gas and undercut attempts by neighboring countries to develop their own energy industries so they can compete. This dependence has simultaneously boosted the Russian economy and allowed it to advance its foreign policy goals in Eastern Europe; namely, the domination and takeover of Ukraine.

Russia as an Energy Superpower

As of the early 2010s, Russia supplied 40% of the European Union’s gas imports and was the sole supplier of gas to many former Soviet satellite states, including Bulgaria, Slovakia, the Baltics, and Ukraine. The extent of this dependence was revealed by the 2006 New Year’s crisis when Gazprom abruptly reduced the amount of gas being pumped through Ukraine to the rest of Europe. Several states declared national emergencies, lacking the power to operate factories or even heat government buildings.

(Shortform note: An almost identical event occurred in 2009, with Russia once again cutting off its supply to Ukraine and leaving over a dozen European countries without gas. This time the affected countries included Greece, the Czech Republic, Poland, and Serbia. Slovakia had to declare a state of emergency.)

As a result, most European states have sought to strengthen their relationship with Russia in the past two decades, seeing it as a necessary ally and a safer alternative to partnerships with OPEC nations in the Middle East. The Nord Stream pipeline, constructed jointly by Germany and Russia with the approval of the European Union, cemented many of these relationships.

(Shortform note: As of early 2023, none of the Nord Stream pipelines are operational. Work on the project was halted in Germany following Russia’s 2022 invasion of Ukraine, and several pipelines were damaged in an explosion of unknown cause in September that same year.)

Russian Interference in Ukraine

The extent of this dependence in Eastern Europe in particular has allowed Russia to manipulate the internal policy of certain countries. For example, Ukrainians have been “punished” for making moves toward joining NATO and the EU by having the cost of gas raised or their supply cut off. These tactics work in combination with mobsterism (Ukrainian politicians have been mysteriously poisoned or arrested on false charges) and Russian-backed puppet leaders, such as former president Viktor Yanukovych, to undermine Ukraine’s independence and give Russia near-total control over Ukraine’s economy.

Maddow argues that Russia’s domination of Ukraine is motivated by both economic advantages and Putin’s Russian nationalism, which sees Ukraine as the historical property of Russia and its independence since 1994 as illegitimate. Repeated attempts by Ukrainians to oppose Russian interference or elect anti-Putin leaders culminated in a series of conflicts in 2014. Russia invaded and annexed the Crimean peninsula a few months later, and in the years since war has continued in eastern Ukraine. While the annexation of Crimea was widely condemned, Maddow points out that few European nations intervened on Ukraine’s behalf, afraid to jeopardize their relationship with Russia and thus their access to Russian gas.

(Shortform note: By contrast, the February 2022 invasion prompted most of Europe to impose sanctions on Russia and pull out of joint deals. Ukraine has received billions in humanitarian aid, weapons, and combat equipment from the European Union and the United States, while Russia has mainly received support from Belarus and possibly Iran. The war is ongoing as of 2023, and it’s currently unclear how the balance of power in Europe will shift once the conflict ends.)

Russia’s American Allies

Maddow claims that both Russia’s status as an energy superpower and its encroachment on Ukraine would have been impossible without its long-standing partnership with ExxonMobil. While Russia has massive gas and oil reserves, both the equipment and the technology used by Rosneft and Gazprom are decades out of date, and relatively few new wells have been discovered and developed since the end of the Soviet era in 1991.

The Rosneft-ExxonMobil deal signed in 2011 gave ExxonMobil significant tax breaks in exchange for drilling new wells and helping to modernize Russia’s process. Both companies have made an enormous profit from this relationship, and ExxonMobil has fought to maintain it, even in the face of the economic sanctions imposed on Russia by the US and much of Europe in 2014. In fact, ExxonMobil shut down its operations in Russia only after being explicitly ordered to do so by the Obama administration.

(Shortform note: ExxonMobil tried to renew its relationship with Russia in 2016 but was denied a waiver from sanctions by President Trump. It pulled out of Russia entirely following the invasion of Ukraine. Despite this, 2022 was a year of record profits for the company.)

Maddow argues that the Trump administration was another significant ally to Russian energy, with former ExxonMobil CEO Rex Tillerson serving as Secretary of State for several years. One of President Donald Trump’s first acts in office was to nullify a 2010 law that required American energy companies to publicly report on their dealings with foreign governments. While Trump did not roll back the sanctions, he frequently praised Russia and Putin’s leadership, and Maddow points to evidence that the two leaders may have colluded to secure Trump’s 2016 electoral win.

Trump’s Record on Russia and Energy

Rex Tillerson’s influence in government didn’t last long, as he was fired from his position in March 2018 alongside a number of other White House officials. Still, the Trump administration worked continuously to roll back environmental regulations and encourage oil and gas companies in the US to expand. Though these moves were condemned by environmentalists, energy companies argued that they would make US energy independence possible—in 2020, the US exported more energy products than it imported. Trump’s successor, President Joe Biden, has attempted to reverse some of these policies, with mixed results.

Trump critics and supporters disagree on how lenient his administration was toward Russia. Some, like Maddow, have accused him of trading information with Russia during his campaign and possibly while in office. Others point out that his administration imposed a number of new sanctions on the country and argue that, if anything, Trump actually failed to keep his campaign promise to improve US-Russia relations.

How to Protect the World From the Energy Industry

Maddow closes the book by discussing some possibilities for curbing the negative effects of the energy industry; namely, by bringing an end to tax breaks for oil and gas companies, requiring more transparency on their dealings with foreign governments, and enforcing stricter government regulation of where, when, and how these companies can drill.

She argues that requiring energy companies to pay higher taxes would mean that their profits would enrich the citizens of the state where drilling takes place, not just the energy executives. More transparency, as enforced by laws that would require companies to report exactly how much money (and for what goods or services) is changing hands, could bring an end to corruption; if ExxonMobil had to report on its dealings with Equatorial Guinea or Russia this extensively, bribes and money laundering would become impossible. Finally, strict government regulation of drilling activity could prevent accidents and environmental disasters.

Some of these changes were made in Oklahoma from 2016-2018, and the positive effects were immediately obvious. Raising taxes meant that the demands of striking teachers for better pay and conditions could be met, and the local government could pay off some of its debts, all without significantly hurting the profitability of the energy industry. Local oil and gas companies have continued to thrive without endangering the lives, property, and environmental resources of Oklahomans.

The Future of American Energy

Some critics of Maddow argue that her suggestions are not radical enough, since they advise continuing a long-standing liberal Democratic policy of regulating the energy industry without seriously challenging its structure or priorities. Left-wing environmental activists believe that this strategy has already failed and that the survival of the planet depends on totally eliminating fossil fuels as an energy source, not just reforming the industry.

Even Oklahoma, which Maddow praises for its regulatory practices, has made moves in the 2020s to invest in clean energy as a replacement for the existing oil and gas industry. In 2021, wind power surpassed natural gas as the primary source of Oklahomans’ electricity. On the other hand, there are no current efforts to ban fracking in the state, as has been done in a few East Coast states.