Blowout

Blowout Plot Summary

Introduction

In March 2003, Russian President Vladimir Putin stood proudly at the grand opening of a Lukoil gas station in Manhattan, an event that symbolized Russia's emerging energy power on the global stage. This seemingly mundane ribbon-cutting ceremony marked something profound: the growing influence of oil and gas in shaping global politics and democracy. Behind the smiles and handshakes lay a complex web of power dynamics that would reshape international relations for decades to come. The relationship between petroleum resources and democratic governance presents one of the most consequential paradoxes of our time. Nations blessed with abundant oil and gas reserves often suffer from what economists call the "resource curse" - where natural wealth leads not to prosperity for all, but to corruption, authoritarianism, and stunted development. From the streets of Oklahoma City to the presidential palaces of Equatorial Guinea, from the Arctic drilling platforms to the Kremlin's corridors of power, this book traces how the pursuit of petroleum riches has fundamentally altered the relationship between citizens and their governments, often undermining the very foundations of democratic rule.

Chapter 1: The Birth of Oil Dominance: Rockefeller's Standard Oil Empire (1859-1911)

The story of modern oil begins with a simple drill bit striking pay dirt in Pennsylvania in 1859. Edwin Drake's modest well produced merely twenty barrels of "rock oil" daily, but it marked the beginning of an industry that would reshape global politics and economics. Within this nascent field, one man would rise to define not just an industry but an era of American capitalism: John D. Rockefeller. Rockefeller entered the oil business in 1863 at age twenty-three, focusing not on drilling but on refining crude oil. His genius lay in recognizing that controlling the processing of oil offered more stable profits than the boom-and-bust cycle of exploration. Within a decade, his Standard Oil controlled nearly all refineries in Cleveland, then the nation's main refining center. By 1875, Rockefeller had captured every major refining center in America, shipping a million barrels of refined oil annually. The methods Rockefeller employed combined ruthless business tactics with remarkable innovation. He drove down refining costs by more than 85 percent through economies of scale, allowing him to cut consumer prices by 70 percent while still generating enormous profits. His company developed an integrated system of production, refining, and distribution that gave Standard Oil unprecedented control over the industry. "It is time to stop living according to Lenin!" Rockefeller once wrote. "Our guiding light is Profit, acquired in a strictly legal way. Our Lord is His Majesty, Money." By the 1890s, Standard Oil controlled approximately 90 percent of America's crude oil flow. The company had become, in the words of Rockefeller's biographer Ron Chernow, "the largest business empire on earth." This concentration of power eventually provoked a backlash. Critics like journalist Ida Tarbell exposed Standard's predatory practices, and public sentiment turned against what many saw as an un-American monopoly. In 1911, the U.S. Supreme Court ordered Standard Oil broken up into about three dozen distinct firms, ruling that it had illegally monopolized the interstate oil industry. The legacy of Rockefeller's empire extends far beyond business history. It established a template for how extractive industries would operate globally, setting patterns of corporate behavior and government relations that would define the petroleum politics of the next century. As oil became increasingly vital to national security and economic growth, the stage was set for the complex interplay of corporate power, geopolitics, and democracy that continues to this day.

Chapter 2: Russia's Petro-State: Putin's Rise and Resource Consolidation

The collapse of the Soviet Union in 1991 created an economic vacuum in Russia that was quickly filled by a handful of opportunistic businessmen who acquired state assets at fire-sale prices. Among these oligarchs was Mikhail Khodorkovsky, who transformed a collection of Soviet-era oil companies into Yukos, Russia's most successful private oil corporation. By 2003, Yukos had doubled its output in just four years, was worth more than $30 billion, and accounted for nearly 20 percent of Russia's crude oil production. Khodorkovsky's success represented everything Vladimir Putin, who had become Russia's president in 2000, found threatening. A former KGB operative, Putin had watched with dismay as Russia's natural resources fell into private hands during Boris Yeltsin's chaotic presidency. Putin and his clan of security service veterans (siloviki) had learned in St. Petersburg during the 1990s how to exercise power through a blend of political authority, business connections, and criminal relationships. Now in control of the Kremlin, they viewed Russia's oil and gas wealth as the key to restoring national power. The confrontation between Khodorkovsky and Putin came to a head in 2003. Khodorkovsky had been negotiating to sell a 30 percent stake in Yukos to ExxonMobil, with the possibility that the American company might eventually gain majority control. For Putin, this represented an existential threat – Russia might not be a superpower anymore, but it still had oil, and he wasn't about to give that up too. When ExxonMobil CEO Lee Raymond told Putin, "I need to have an understanding of our ability to get to fifty-one percent," the Russian president was reportedly both offended and alarmed. Putin's response was swift and brutal. Khodorkovsky was arrested in October 2003 on charges of tax evasion and fraud. Yukos was hit with $27.5 billion in back taxes, its assets were frozen, and its main production subsidiary was auctioned off to a mysterious shell company that was quickly acquired by the state-owned oil company Rosneft. By 2010, Putin had consolidated control over Russia's oil and gas industry and was using it as the foundation for rebuilding Russian power. The state now controlled the commanding heights of the economy, and Putin had demonstrated to other oligarchs the consequences of challenging his authority. Western financial institutions played a crucial role in legitimizing this state theft. Morgan Stanley, which had maintained close ties with the Russian government, helped arrange Rosneft's initial public offering on the London Stock Exchange in 2006, raising more than $10 billion. Despite criticism from figures as diverse as George Soros and Dick Cheney, international investors eagerly bought shares in a company built on stolen assets. This resource-based autocracy would become the template for Putin's rule – and the source of tensions with the West that would eventually erupt into open conflict.

Chapter 3: The Fracking Revolution: Technology, Wealth and Environmental Costs

In the late 1960s, as America's domestic oil production seemed to be approaching its limits, the energy industry began exploring increasingly desperate measures to unlock new reserves. One of the most extraordinary was Project Rulison in Colorado, where in 1969 the U.S. Atomic Energy Commission and Austral Oil Company detonated a 43-kiloton nuclear bomb 8,426 feet underground – nearly three times the power of the Hiroshima bomb – in an attempt to free natural gas trapped in tight rock formations. The explosion created a 300-foot-high cavern but produced radioactive gas that proved commercially unviable. Throughout the 1970s, America faced severe natural gas shortages. The frigid winter of 1977 brought a state of emergency in New York, with schools shut down and thermostats ordered down to sixty-five degrees. In Columbus, Ohio, 145 of 172 public schools closed for an entire month due to lack of natural gas for heating. Congress even passed legislation in 1978 that essentially outlawed new gas-fired power plants, leading to a quarter-century of increased dependence on coal. The breakthrough finally came in 1998 when Mitchell Energy engineer Nick Steinsberger developed "slickwater" fracking – a technique using primarily water rather than expensive gels to crack open shale rock. When combined with horizontal drilling technology, this innovation finally made shale gas extraction economically viable. Devon Energy purchased Mitchell's company in 2002 and perfected the combination of these technologies, unleashing what would become known as the shale revolution. By 2010, this technological revolution had transformed America's energy landscape. Natural gas production soared, prices fell dramatically, and regions from Pennsylvania to Texas experienced economic booms. The United States was suddenly on track to become not just energy independent but potentially a major exporter. As ExxonMobil CEO Rex Tillerson said after his company paid $30 billion to acquire the fracking pioneer XTO Energy: "The world's economy has a voracious appetite for energy, so thank God we can do this." The fracking boom transformed communities across America, particularly in Oklahoma, where oil production more than doubled between 2008 and 2014. Companies like Chesapeake Energy, led by the charismatic Aubrey McClendon, became symbols of American energy innovation. Yet this technological triumph came with significant costs. By 2011, Oklahoma was experiencing earthquakes at an unprecedented rate – a 10,000 percent increase over the historical average. Evidence mounted that these were induced by the disposal of enormous volumes of toxic wastewater from fracking operations, injected deep underground where it increased pressure on fault lines. The fracking revolution represented both America's ingenuity and its capacity to disrupt the global order, for better and worse. While it reduced carbon emissions by displacing coal and decreased dependence on foreign oil, it also created new environmental challenges and geopolitical tensions. Countries that had built their economies around high oil and gas prices, particularly Russia, suddenly faced existential threats to their resource-based power, setting the stage for new forms of conflict in the years ahead.

Chapter 4: Resource Curse: Equatorial Guinea and the Paradox of Plenty

In 1995, American oil companies discovered vast reserves off the coast of Equatorial Guinea, a tiny West African nation ruled by President Teodoro Obiang Nguema Mbasogo. What followed provides perhaps the starkest example of what economists call the "resource curse" – the paradoxical phenomenon where countries rich in natural resources often experience worse development outcomes than their resource-poor counterparts. Between 1993 and 2007, Equatorial Guinea's annual government oil revenues exploded from $2.1 million to $3.9 billion – a staggering 8,400 percent increase. The country's per capita income rose to about $37,200, among the highest in the world. Yet this wealth never reached ordinary citizens. During this same period, 77 percent of the population continued to live in poverty, 35 percent died before age 40, and the infant mortality rate actually increased from 10 to 12 percent. As journalist Peter Maass reported: "Nearly half of all children under five are malnourished. Even major cities lack clean water and basic sanitation...The main hospital is a place for dying, not healing." Where did all the money go? Much of it flowed directly to President Obiang, his family, and his inner circle. His son Teodorin became the international face of kleptocracy, purchasing a $30 million mansion in Malibu, a $38.5 million private jet, a fleet of luxury cars worth $10 million, and even commissioning what would have been the world's second-largest yacht at $380 million – exceeding his country's entire annual spending on education and welfare programs. In 2010, Teodorin spent millions acquiring Michael Jackson memorabilia, including a crystal-covered glove from the Bad tour that cost $275,000. American oil companies, particularly ExxonMobil, facilitated this plunder through a complex web of payments to Obiang family members and officials. According to a U.S. Senate investigation, ExxonMobil cut President Obiang in on an oil-distribution joint venture that enriched him by about $640,000 on a $2,300 investment, paid his senior wife at least $365,000 in questionable rental fees, and made numerous other payments to family members and ministers. When asked about these arrangements, ExxonMobil executive Andrew Swiger explained: "The business arrangements we've entered into have been entirely commercial...They are a function of completing the work that we are there to do, which is to develop the country's petroleum resources." The resource curse in Equatorial Guinea demonstrates how oil wealth can corrupt democratic institutions and undermine development. Rather than benefiting the population, the country's vast oil revenues primarily enriched the ruling family and their international partners. Western oil companies, prioritizing access to resources over ethical concerns, became complicit in a system that perpetuated poverty and repression. As Professor Terry Karl, a leading scholar on the resource curse, explains, oil wealth typically leads to "a reduction of the welfare of people in oil exporting countries. It will provoke violence and unrest. It will lead to the violation of rights. It will lead to the destruction of the environment. It will buffer authoritarian rule."

Chapter 5: Arctic Ambitions: ExxonMobil's Partnership with Putin's Russia

As climate change rapidly melted Arctic ice in the early 2010s, a new frontier in the global petroleum race emerged. The U.S. Geological Survey estimated that the Arctic contained approximately 13% of the world's undiscovered oil reserves and 30% of its undiscovered natural gas – a prize worth trillions of dollars. Russia, with the longest Arctic coastline of any nation, positioned itself aggressively to claim these resources, planting a titanium flag on the seabed beneath the North Pole in 2007 and expanding its military presence in the region. On August 30, 2011, Rex Tillerson, CEO of ExxonMobil, arrived in Sochi, Russia, for a ceremony announcing a spectacular new partnership between America's largest oil company and Rosneft, Russia's state-controlled oil giant. This was no ordinary business deal—it represented a strategic alliance that could reshape the global energy landscape. The agreement called for an immediate investment of $3.2 billion to develop oil and gas reserves in Russia's Arctic Kara Sea, with potential future investments reaching $500 billion. "The scale of the investment is very large," Russian Prime Minister Vladimir Putin remarked at the signing. "It's scary to utter such huge figures." For Tillerson, this partnership was the culmination of fifteen years of careful relationship-building in Russia. ExxonMobil was thriving in 2011, having reported profits of $21.3 billion in just the first half of the year. But Tillerson knew that ExxonMobil needed to secure new reserves to ensure its long-term future, and no location offered greater potential than Russia's Arctic shelf. Rosneft had concluded that the Kara Sea alone contained at least 36 billion barrels of oil—quadruple ExxonMobil's current worldwide reserves. The key figure brokering this partnership was Igor Sechin, Putin's longtime confidant who served as chairman of Rosneft. Described variously as "the scariest man on Earth," "Darth Vader," and "one of the most brutal, cynical, thuggish figures in all the Kremlin," Sechin had transformed Rosneft from a fourth-rate company into Russia's dominant oil producer through a series of aggressive takeovers. His most notorious achievement was orchestrating the destruction of Yukos, once Russia's most successful private oil company, and imprisoning its owner, Mikhail Khodorkovsky, for a decade. Despite Sechin's intimidating reputation, Tillerson cultivated a close relationship with him. When Sechin was placed on the U.S. sanctions list in 2014 following Russia's annexation of Crimea, ExxonMobil continued to do business with him, signing eight separate agreements in the month after sanctions were imposed. The company argued that it was only barred from engaging with Sechin where his "personal assets" were involved, not in his capacity as Rosneft's leader. The Arctic partnership between ExxonMobil and Rosneft revealed the complex interplay between corporate interests and national security. While the U.S. government was attempting to isolate Russia economically, America's largest oil company was pursuing a deal that could provide Putin's regime with the technology and resources it desperately needed. As Tillerson later explained his approach to Russia: "I've known Putin since 1999 and I have a very close relationship with him. I don't agree with everything Putin's doing....But he understands that I'm a businessman."

Chapter 6: Energy Politics and Democracy: The Battle for Ukraine

Ukraine has long been a contested territory between Russia and the West, but the struggle took on new dimensions in the early 21st century as energy politics became increasingly central to the conflict. When Ukraine gained independence in 1991, it traded its nuclear arsenal for security assurances from Russia, the United States, and the United Kingdom in the 1994 Budapest Memorandum. The newly independent nation was caught between two powerful suitors—the European Union offering economic integration and Russia providing cheap energy supplies. This balancing act became increasingly difficult to maintain as Vladimir Putin consolidated power in Russia and began using energy as a geopolitical weapon. By 2005, Putin had embraced a new foreign policy strategy titled "Energy Superpower." He demonstrated its potential on New Year's Day 2006, when Gazprom abruptly cut off natural gas supplies to Ukraine, which at that time controlled the only pipelines from Russia into the rest of Europe. As European countries saw their gas deliveries drop by 30-40 percent during the frigid winter, Putin made his point clear: Europe's energy security depended on Russia's goodwill. The message was reinforced when Russia hosted the G8 summit in St. Petersburg later that year, offering the West a deal: stop criticizing Russia's human rights record, and Russia would guarantee Europe's energy supply. The situation in Ukraine reached a crisis point in late 2013. President Viktor Yanukovych, who had been elected in 2010 with strong Russian support, suddenly reneged on his promise to sign an Association Agreement with the European Union. This decision triggered massive protests in Kyiv's Maidan Square, with demonstrators demanding closer ties with Europe and an end to corruption. What began as a demonstration about the EU question morphed into a broader movement about democracy itself—the "Revolution of Dignity." As one protester declared, "We are not afraid to die for freedom. Freedom is for us. Freedom is ours. We will win, and Ukraine will be part of Europe, and Ukraine will be part of the free world!" Putin watched these developments with growing alarm, particularly as Ukrainian companies were signing production deals with Western oil companies to develop the country's own oil and gas reserves. Ukraine had almost 400 million barrels of proven oil reserves and potentially vast natural gas deposits that could be accessed through fracking. Energy independence would mean true independence from Russia—something Putin could not tolerate. When Yanukovych fled the country in February 2014 after his security forces killed more than 100 protesters, Putin moved quickly to reassert control. Within weeks, Russian forces without insignia—the "little green men"—seized control of Crimea. By March 18, 2014, Putin had formally annexed the peninsula, the first forcible change of European borders since World War II. The conflict escalated in July 2014 when Malaysia Airlines Flight 17 was shot down over eastern Ukraine, killing all 298 people aboard. International investigators would later determine that the civilian airliner had been destroyed by a Russian-manufactured missile fired by the Russian army's 53rd Anti-aircraft Missile Brigade. The battle for Ukraine revealed how energy resources had become central to modern geopolitical conflicts. Russia's willingness to use military force to maintain its energy dominance demonstrated the high stakes involved. As one analyst observed, "Putin could at least manage Ukraine's fractious and corruptible lurches at political independence. He could not countenance the idea of Ukraine's energy independence, which would certainly lead to Ukraine's actual independence." The struggle for Ukraine was not merely about territory or political influence—it was about who would control the energy resources that underpinned economic and political power in the region.

Chapter 7: Digital Warfare: How Petroleum Wealth Fuels Information Operations

In the summer of 2010, a dramatic counterintelligence operation unfolded across the United States as the FBI arrested ten Russian deep-cover agents who had been living as Americans for years. These weren't ordinary spies working under diplomatic cover at embassies; they were "Illegals"—specially trained agents embedded in American society with stolen or invented identities. The group included Richard and Cynthia Murphy, a seemingly ordinary couple living in Montclair, New Jersey; Donald Heathfield and Tracey Foley, who had been raising two sons in Boston for a decade; and Anna Chapman, a young businesswoman whose flaming auburn hair and youthful allure would captivate tabloid headlines. These agents had spent years building elaborate cover stories—attending American universities, developing careers, making friends, and even raising children. Their mission was to infiltrate policy-making circles and gather intelligence for Moscow. Cynthia Murphy had been instructed to cultivate a relationship with a New York financier who had connections to Hillary Clinton. "Try to build up little by little relations with him," her handlers directed, hoping for "remarks re US foreign policy, 'rumors' about White House internal 'kitchen.'" Despite their long-term presence, however, these spies had gathered little valuable intelligence. By early 2015, Russia's economy was in crisis. Western sanctions imposed after the annexation of Crimea had cut off Russian companies from vital technology and financing. Simultaneously, global oil prices had collapsed from over $100 per barrel to less than $50, devastating state revenues. With his conventional economic and energy leverage diminished, Vladimir Putin turned to a new form of asymmetric warfare that would exploit vulnerabilities in Western democracies while requiring minimal resources. In a nondescript four-story building at 55 Savushkina Street in St. Petersburg, hundreds of young Russians worked twelve-hour shifts at the Internet Research Agency (IRA), a state-sponsored "troll factory." Their mission: to flood social media platforms with content designed to inflame political divisions and undermine trust in democratic institutions. Initially focused on Ukraine and Russian domestic politics, by mid-2015 the operation had shifted its attention to a new target - the United States and its upcoming presidential election. The IRA's tactics were sophisticated and multi-layered. Operatives created thousands of fake American personas on platforms like Facebook, Twitter, and Instagram, complete with convincing backstories and profile pictures. They established pages and groups focused on divisive issues such as immigration, gun rights, and racial tensions, building audiences of millions. "Heart of Texas," a Russian-created Facebook page promoting Texas secession and anti-immigrant sentiment, attracted over 250,000 followers. Meanwhile, "Blacktivist," another IRA creation, posed as an African American activist group highlighting police brutality. The petroleum connection to these digital operations was both direct and indirect. Russia's oil and gas wealth had funded the creation of its cyber capabilities, while the economic pressure caused by sanctions and falling oil prices motivated more aggressive information warfare. Moreover, energy politics frequently featured in Russian messaging, with content promoting climate change denial, attacking renewable energy, and highlighting the economic benefits of fossil fuels. By the time the full scope of Russian interference became clear after the 2016 election, it was evident that a new form of petroleum-powered influence had emerged - one that used oil wealth to fund sophisticated information operations targeting the cognitive infrastructure of democratic societies. This digital dimension of the petro-state paradox would prove particularly challenging for democracies to counter, as it operated in the shadows and exploited fundamental freedoms of expression and information.

Summary

The global petroleum system represents one of the most consequential forces shaping modern democracy and international relations. From John D. Rockefeller's Standard Oil to Vladimir Putin's energy-fueled authoritarianism, from Oklahoma's earthquake crisis to Equatorial Guinea's kleptocracy, oil and gas have consistently demonstrated their capacity to distort governance and undermine democratic accountability. The fundamental paradox remains: resources that could provide the foundation for broad-based prosperity instead frequently become tools for corruption, repression, and geopolitical manipulation. Yet the relationship between petroleum and democracy is not predetermined. The divergent experiences of Norway and Nigeria, both major oil producers, demonstrate that institutional design and civic engagement can make an enormous difference in outcomes. As the world grapples with both the immediate challenges of energy security and the long-term imperative of climate action, strengthening democratic resilience against petroleum-driven corruption becomes increasingly urgent. This requires not just technical solutions like transparency requirements and anti-corruption measures, but a fundamental recommitment to the principle that natural resources should benefit citizens rather than capture their governments. Only by directly confronting the petro-state paradox can we hope to harness the potential benefits of natural resource wealth while preserving the democratic values essential to just and sustainable societies.

About Author

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Rachel Maddow

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.

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