Blowout: Corrupted Democracy, Rogue State Russia, and the Richest, Most Destructive Industry on Earth

by Rachel Maddow

Overview

#1 NEW YORK TIMES BESTSELLER • Big Oil and Gas Versus Democracy—Winner Take All

“A rollickingly well-written book, filled with fascinating, exciting, and alarming stories about the impact of the oil and gas industry on the world today.”—The New York Times Book Review

In 2010, the words “earthquake swarm” entered the lexicon in Oklahoma. That same year, a trove of Michael Jackson memorabilia—including his iconic crystal-encrusted white glove—was sold at auction for over $1 million to a guy who was, officially, just the lowly forestry minister of the tiny nation of Equatorial Guinea. And in 2014, revolutionaries in Ukraine raided the palace of their ousted president and found a zoo of peacocks, gilded toilets, and a floating restaurant modeled after a Spanish galleon. Unlikely as it might seem, there is a thread connecting these events, and Rachel Maddow follows it to its crooked source: the unimaginably lucrative and equally corrupting oil and gas industry.

With her trademark black humor, Maddow takes us on a switchback journey around the globe, revealing the greed and incompetence of Big Oil and Gas along the way, and drawing a surprising conclusion about why the Russian government hacked the 2016 U.S. election. She deftly shows how Russia’s rich reserves of crude have, paradoxically, stunted its growth, forcing Vladimir Putin to maintain his power by spreading Russia’s rot into its rivals, its neighbors, the West’s most important alliances, and the United States. Chevron, BP, and a host of other industry players get their star turn, most notably ExxonMobil and the deceptively well-behaved Rex Tillerson. The oil and gas industry has weakened democracies in developed and developing countries, fouled oceans and rivers, and propped up authoritarian thieves and killers. But being outraged at it is, according to Maddow, “like being indignant when a lion takes down and eats a gazelle. You can’t really blame the lion. It’s in her nature.”

Blowout is a call to contain the lion: to stop subsidizing the wealthiest businesses on earth, to fight for transparency, and to check the influence of the world’s most destructive industry and its enablers. The stakes have never been higher. As Maddow writes, “Democracy either wins this one or disappears.”

Product Details

ISBN-13:	9780525575481
Publisher:	Crown Publishing Group
Publication date:	02/02/2021
Pages:	448
Sales rank:	82,402
Product dimensions:	5.10(w) x 7.70(h) x 1.10(d)

About the Author

Rachel Maddow is host of the Emmy Award–winning Rachel Maddow Show on MSNBC, as well as the #1 New York Times bestselling author of Drift: The Unmooring of American Military Power; Blowout: Corrupted Democracy, Rogue State Russia, and the Richest, Most Destructive Industry on Earth; and Bag Man: The Wild Crimes, Audacious Cover-Up, and Spectacular Downfall of a Brazen Crook in the White House. Maddow received a bachelor’s degree in public policy from Stanford University and earned her doctorate in political science at Oxford University. She lives in New York City and Massachusetts with her partner, artist Susan Mikula.

Read an Excerpt

One

Splendor and Fragrance

If you had to point to a beginning, to the exact location of the big bang from which American industrial and economic power began its astounding and sometimes reckless expansion, it would be at the end of a percussion-driven, blunt-force drill bit, lowered through a cast-iron pipe, powered by a six-horsepower steam engine, slamming down and down and down into the earth on a farm in northwest Pennsylvania. At a depth of sixty-nine and a half feet, the operators of the drill struck what they had been looking for, and on August 28, 1859, the crude yet sublime substance—“rock oil,” as it was called at the time—presented itself on the earth’s surface.

That discovery, like the big bang itself, is but a subatomic pinhole in space compared with all that has followed. Edwin Laurentine Drake and his hired man, “Uncle Billy” Smith, pulled the equivalent of maybe twenty forty-two-gallon barrels of crude oil from the ground on a good day. The inhabitants of our planet weren’t exactly starving for more in 1859, or at least didn’t yet know they were. The first commercially viable gas-powered engine, and the ensuing addiction, were still a few generations away.

Today’s drillers produce an average of more than ninety million barrels of oil worldwide every day, and a lot of natural gas, too, which fuels cars, jets, freight trains, ocean liners, power plants, factories, and farm machinery, as well as the economies of republics, monarchies, and dictatorships around the globe. Nearly a hundred countries, representing six continents, are in the oil and gas game, and many have been in it for a century or more. But the United States got there first (Russia was a very distant second), and only the United States can lay claim to having shaped the industry’s prevailing culture: the tools of its trade, its financing, its administration, its ethic, and its reach. “The organization of the great business of taking petroleum out of the earth, piping the oil over great distances, distilling and refining it, and distributing it in tank steamers, tank wagons, and cans all over the earth,” the president emeritus of Harvard noted in 1915, “was an American invention.”

In fact, it could be argued, the oil business as we know it today was the invention of one particular American, John D. Rockefeller. Rockefeller was there almost from the beginning. He created and husbanded the exemplar of the industry, Standard Oil, and along the way he helped to popularize the idea of America as the testing ground where the extravagant possibilities and the outsized benefits of free-market capitalism have been proven. Rockefeller, a junior partner in a Cleveland merchant commission house trading in grain, hay, meat, and miscellany when Edwin Drake made his strike in 1859, watched the oil business unfold up close. When he entered the field in 1863, at age twenty-three, he understood his best bet was to concentrate on refining the crude oil and to leave to others the rather messy and costly process of actually getting it out of the ground.

Within ten years, Rockefeller had managed to get control of nearly all of the oil refineries in Cleveland, which had established itself as the nation’s main refining center. Rockefeller’s new corporation, Standard Oil, shipped a million barrels of refined oil in a single year. By 1875, thanks to the fire sale that followed the first frightening financial panic and depression in industrialized America, Rockefeller had taken control of every major refining center in the country. “We were all in a sinking ship,” he would later explain, “and we were trying to build a lifeboat to carry us all to shore. . . . The Standard was an angel of mercy, reaching down from the sky, and saying ‘Get in the ark. Put in your old junk. We’ll take the risks!’ ”

Standard Oil’s main product at the time was kerosene, which proved a welcome innovation in illumination. It was efficient, effective, plentiful, and reasonably priced. The most widely used lighting oil at the time, which was struck from soft coal, was dirty; whale oil was hard to get (see Moby-Dick) and dwindling in supply; kerosene from petroleum—or rock oil—was just the thing to illuminate the clean, bright new future. “Rock oil emits a dainty light,” promised the new industry. “The brightest and yet the cheapest in the world, a light fit for Kings and Royalists and not unsuitable for Republicans and Democrats.” Farmers and city dwellers could afford to read well into the night. Factory owners could afford to keep their works open around the clock. Rockefeller’s magic potion was a worldwide phenomenon; in 1875, before any European-based company was producing kerosene in bulk, 75 percent of the output from Rockefeller’s American refineries was loaded up and shipped overseas. Cash flowed back across the Atlantic. Standard’s production capacity grew year after year. The efficiencies that followed—economies of scale—allowed Rockefeller to cut the cost of refining by more than 85 percent and to cut the cost to the consumer by 70 percent. Demand swelled, and so did revenues.

Rockefeller’s company, meanwhile, just kept eating would-be competitors. About 90 percent of America’s crude flowed through Standard Oil by the end of the 1890s. The company had money and means to produce its own crude, and refine it, and get it shipped to market on its own (always favorable) terms. Standard was capable of controlling the price of oil and railroad freight rates and had cash in the bank to pay off the state and federal legislators who wrote laws governing the industry. “John D. and his colleagues regarded government regulators as nuisances to be bypassed wherever possible,” says Rockefeller’s estimable biographer, Ron Chernow. “He felt that politicians were basically parasites who would shake down businessmen. I mean, all of this bribery he saw as extortion; that is, the politicians shaking him down, rather than his paying off the politicians. . . . I think he regarded these payments really as a business expense.”

Standard Oil eventually grew into “the largest business empire on earth,” according to Chernow. “I don’t know that the business world has ever seen an agglomeration of wealth and power on the scale of Standard Oil.” This was the era of consolidation, of the Big Trust, which was nineteenth-century parlance for monopoly—the Sugar Trust, the Beef Trust, the Steel Trust, the Tobacco Trust, the Rope-and-Twine Trust. But the Rockefeller-controlled Oil Trust was the first, the biggest, the most powerful, and easily the most talked-about trust in the country. Rockefeller himself stood with Andrew Carnegie (steel), Philip Armour (meat products), and James Buchanan Duke (cigarettes) as the richest and most powerful commodity producers on the continent. They sat on mounds of private wealth unimaginable in the young republic at the time of Rockefeller’s own birth. John D. died nearly fifty years before the debut of the Forbes 400, the annual listing of the wealthiest private individuals in the country. But when the editors of a book timed to coincide with the twenty-fifth-anniversary edition of that list made some calculations, they declared Rockefeller the richest single individual in the history of America. They figured his peak net worth at $305 billion (in 2006 dollars), which means that if John D. were to be magically reanimated today, with his peak fortune still intact, his personal wealth would roughly triple that of the whippersnapper who sat atop the Forbes list in 2019.

Millions of barrels of ink have been expended in trying to explain the reasons for Rockefeller’s spectacular achievement, to reveal the cardinal (and perhaps replicable) tactic, to pinpoint the specific innate genius that made it all happen. Theories abound. Take, for instance, what could be called the Bung Theory. A bung is the stopper once used to seal up a barrel of oil, and Rockefeller’s intense interest in this unromantic industrial cog, his keen watch on the monthly bung count, offers a tantalizing lead on the secret to his success. “Your March inventory showed 10,750 bungs on hand,” Rockefeller once wrote to one of his foremen. “The report for April shows 20,000 new bungs bought, 24,000 bungs used, and 6,000 bungs on hand. What became of the other 750 bungs?” Maybe the key was pinching every penny! John D. Rockefeller wasted nothing, see, so he could push his costs down, undercut all competitors on price, and drive them out of the business, or at least into Standard Oil’s angel of mercy ark.

Then there is the well-traveled Great Monster Theory. “Run, children, or Rockefeller’ll get you,” was a threat that could strike terror in the Pennsylvania oil patch in the late nineteenth century. The Great Monster Theory gained much currency in the popular mind after Ida Tarbell’s remarkable series of investigative articles published in McClure’s Magazine beginning in 1902, “The History of the Standard Oil Company.” Tarbell, who grew up in the patch, itemized the more than thirty years of Rockefeller’s underhanded, corrupt, predatory behavior that constituted his effort to wipe the field of competitors. He was, in Tarbell’s rendering, a rapacious and devious villain. Widows and orphans, beware. It didn’t hurt that Rockefeller, aged sixty-three at the time of publication, looked ready to inhabit the villain role by then. He was already growing thin and pinched—and worse. “He suffered from something called alopecia. In 1901, he lost not only all the hair on his head; he lost all body hair,” Chernow explains. “Ida Tarbell came along a year later, did this series portraying him as a monster. And since he was hairless and suddenly looked old—and ghoulish—his appearance seemed to ratify what she was saying in the series, so that the timing was particularly unfortunate for Rockefeller.”

There is also the Man of His Times Theory. Rockefeller, this theory posits, was simply playing by the very loose set of rules of his day, just like everybody else was. The boundaries of capitalism and democracy in America were still being chalked, the rules of the game still being written. The prevailing ethic was best summed up by one of Rockefeller’s early partners, Henry M. Flagler, who kept a copy of this little ditty on his desk: “Do unto others as they would do unto you—and do it first.” The point of the free market was not to compete but to win. “The most serious charge that can be laid at [Standard’s] door is that it has succeeded,” wrote an oilman who felt compelled to sell out to Rockefeller in the 1880s or suffer the consequences. “It has outwitted its competitors who sought to play the same game but had not so thoroughly mastered the art. . . . In the business battle, the extremity of one is the opportunity of the other. . . . It is the rule of our competitive life that the time when the business rival is on the downward road—when creditors are pressing him hard, when banks are clamoring that he shall meet his paper, when the sheriff is threatening to close his doors—this is the opportunity for the other rival to strike the finishing blow and make merchandise out of the misery of his fellow-man.” Rockefeller’s eldest son and heir offered an exceedingly aromatic metaphor to justify this need to (occasionally, of course) rely on cutthroat tactics. “The American Beauty Rose can be produced in the splendor and fragrance which bring cheer to its beholder only by sacrificing the early buds which grow up around it,” John D. junior sermonized. “This is not an evil tendency in business. It is merely the working-out of a law of nature and a law of God.”

Rockefeller himself had a number of pet theories about his spectacular rise. A devout and puritanical Baptist, John D. was certain there was a higher being at work. “I believe the power to make money is a gift from God,” he explained to one writer, “just as are the instincts for art, music, literature, the doctor’s talent, the nurse’s, yours—to be developed and used to the best of our ability for the good of mankind. Having been endowed with the gift I possess, I believe it is my duty to make money and still more money, and to use the money I make for the good of my fellow man according to the dictates of my conscience.”

These various theories, and the many others in circulation, are not mutually exclusive. The whole truth of John D. Rockefeller is complicated and involves pieces of them all. But the rock-bottom fact on which everything else rests is actually quite simple: Standard Oil just kept turning out the finest product on the market, at the lowest price to the consumer. Ka-ching!

Table of Contents

Introduction: In a Surrealist Landscape ix

1 Splendor and Fragrance 3

2 The Genie 11

3 Stolen Goods 26

4 Charlie Hustle 44

5 Thunder Up! 50

6 Rex Shrugged 69

7 A Risk Management Problem 81

8 Poster Boy 95

9 Practical Realities 107

10 Who Does That? 120

11 The Other 1 Percent 134

12 Ultrahazardous Activity 152

13 A Significant Strategic Step 162

14 Trust 168

15 The Handsome Hero 175

16 This Ain't No Disco 184

17 Such a Man is Born Once Every Few Decades 203

18 Putin Zassal 217

19 All Hail the Mercenaries 226

20 His Idea of America 245

21 Because they Could 255

22 "We Greatly Value Our Relationship" 269

23 Pobeda! 280

24 "Yeah That Was Crazy" 290

25 Active Appreciation 306

26 It All Ties Back 316

27 "All they Have is This" 328

28 "Constituency Trumps Everything" 341

29 Containment 351

Acknowledgments 369

Notes on Sources 371

Index 391

Excerpt from Bag Man 407

Editorial Reviews

Blowout is a rollickingly well-written book, filled with fascinating, exciting and alarming stories about the impact of the oil and gas industry on the world today. While she is clearly animated by a concern about climate change, Maddow mostly describes the political consequences of an industry that has empowered some of the strangest people in the United States and the most unsavory ones abroad.

The New York Times Book Review - Fareed Zakaria

08/26/2019

Petroleum-industry profits inexorably subvert good governance, argues this scattershot indictment of the oil and natural gas industries. Maddow (Drift), host of MSNBC’s The Rachel Maddow Show, surveys Big Oil’s recent misdeeds, including Western oil companies’ support for Equatorial Guinea’s Obiang dictatorship, the 2010 Deepwater Horizon oil spill, and blocking rules to regulate fracking practices that cause earthquake swarms and pollution in Oklahoma (while the same companies demand tax breaks). Anchoring the book is Russian president Vladimir Putin’s cutthroat petropolitics. Maddow contends he turned Russia’s oil and gas sectors into cesspools of corruption and inefficiency, seized well-managed private oil companies and arrested their CEOs, and made energy a foreign policy weapon while getting investments and technology from ExxonMobil. Maddow tells these stories in colorful, sardonic prose—she pillories Putin’s campaign “to piss in the punch bowl of free elections all over the civilized world”—but the resulting hodgepodge doesn’t always support her portrayal of oil and gas as a “singularly destructive industry” that “effectively owns” governments; her absorbing account of Putin’s skullduggery is really about a vampiric government victimizing the oil industry (and includes an unconvincing link to Trump-Russia collusion theories). Maddow’s absorbing but inconsistent exposé demonizes more than it analyzes. Agent: Laurie Liss, Sterling Lord Literistic. (Oct.)

Publishers Weekly

Blowout is a rollickingly well-written book, filled with fascinating, exciting and alarming stories about the impact of the oil and gas industry on the world today. . . . [It features] many colorful tales about villains, scoundrels and adventurers. . . . A brilliant description of many of the problems caused by our reliance on fossil fuels.”—The New York Times Book Review
 
“An account of international intrigue, high finance, low characters, and outrageous legal and illegal acts that put the global economy and Western democracy at grave risk . . . [Maddow] tells this tale deliberately and methodically, building her case not as a cable commentator, but as a Rhodes Scholar. . . . She displays a deep understanding of what makes Russia work in the age of Putin.”—Boston Globe

“I can’t stress enough what a great storyteller Rachel Maddow is. [She carries] the reader through some hair-raising journalism in such an engaging and propulsive fashion you simply cannot put the book down. . . . It has left a most lasting impression.” —San Francisco Chronicle

“At its heart, this book is a tale of two countries, the United States and Russia, and how, as Maddow sees it—individually and together—they have been warped by a rapacious fossil fuel industry. . . . Fulminating comes easy to Rachel Maddow. What sets her apart from other serial fulminators is that she does it with facts—and sardonic wit.”—The Washington Post
 
“All fans of Maddow, and even her detractors, will learn something new from this highly readable yet impressively detailed book. Anyone interested in the covert deals that change the nature of the global environmental and political landscape will devour. A must-have for all collections.”—Library Journal (starred review)
 
“Radiates zing, intelligence, and black humor. Much like its author.”—InStyle
 
“[Maddow] may be a popular, progressive news-and-commentary anchor on MSNBC, but it's not to be forgotten that she holds a doctorate in politics from Oxford and seems to devour whole libraries of data before breakfast each day. . . . Expect a tweetstorm as Maddow’s indictment of a corrupt industry finds readers—and it deserves many.”—Kirkus Reviews (starred review)

“Known for her intense inquiries into complex subjects, Maddow brings her laser-like intuitiveness and keen and wily perception to Big Oil, that stalwart of global economics, and the shadowy nexus of commerce and politics. Maddow likes murky, the murkier the better, and her examination of the intricacies of off-shore drilling, transnational pipelines, and hydraulic fracking is as deep as the coveted wells themselves. . . . Like trailblazing journalists before her, Maddow exposes both the slapdash and sinister practices underlying geopolitics and energy policies and revels in peeling back the layers of malfeasance to stoke righteous outrage.”—Booklist (starred review)

From the Publisher

While television viewers may find Maddow a delight, this 15-hour audiobook may challenge their enthusiasm. Nonetheless, the work certainly has its insights. Russia, U.S. international relations, and oil extraction intersect in Maddow’s investigation of Putin’s rise to power, Rex Tillerson’s ascendance to the position of secretary of state, and the implications these have for geopolitics and the climate crisis. In some areas of the audiobook—as she explains agreements, legalities, or business background—her raspy voice can lose the listener as dry details mount up without a clear end in sight. On the bright side, along with her clarity of language and emphasis, Maddow employs her usual vocal theatrics: enthusiasm, timely quips, and a jovial tone that increases as she closes in on her points. L.E. © AudioFile 2019, Portland, Maine

NOVEMBER 2019 - AudioFile

★ 2019-07-28
Maddow (Drift: The Unmooring of American Military Power, 2012) examines the disconcertingly disproportionate influence of big oil on world affairs.

The author may be a popular, progressive news-and-commentary anchor on MSNBC, but it's not to be forgotten that she holds a doctorate in politics from Oxford and seems to devour whole libraries of data before breakfast each day. In her second book, she takes on the oil oligarchy, beginning with, fittingly, an opening: the first of a Russian-owned chain of gas stations in New York City in 2003, its celebrity highlight Vladimir Putin, accompanied by Sen. Chuck Schumer. Putin had not been in power long, though long enough that the U.S. ambassador to Russia "had already warned of the risk that [he] would evolve into an autocrat who monopolized control of government and the economy behind the window dressing of democratic institutions." From there, Maddow goes on to develop a densely argued exercise in connecting dots: A corrupt Russia—one in which, for example, the builders of the Olympic Village in Sochi skimmed off upward of $30 billion—hitched its wagon to a moribund petro-economy, one that could not survive with the sanctions imposed on it by the Obama administration. This set in motion the whole chain of events now playing out, including Russian tampering in the 2016 election and the not-coincidental haste of the Trump administration to lift those sanctions the moment it entered power. There are many stops along the way. Maddow looks, for example, at the seismic effects of fracking in Oklahoma, a petroleum-extraction technology that, as one voter remarked, afforded "an issue that will turn a red state blue." Updating Daniel Yergin's The Prize with three decades' worth of material, Maddow concludes that big oil can and will do nothing to regulate itself and argues that "containment is the small-c conservative answer" to the problem of "the industry's reliance on corruption and capture."

Expect a tweetstorm as Maddow's indictment of a corrupt industry finds readers—and it deserves many.

Kirkus Reviews