Every day millions of us buy gasoline. The price at the pump has attained unofficial status as the marker of the health of the economy. But knowing the price of a gallon of gas is about all many, if not most, of us know about the stuff. I was more or less in that category so I decided to read Lisa Margonelli's Oil on the Brain: Adventures From the Pump to the Pipeline.
Margonelli is a journalist out of Oakland who became interested in all things oil back in 2002 when she was up in Alaska at Prudhoe Bay and observed an experiment in oil spills clean up. This test involved dropping some bags of napalm onto an oil slick. She was mesmerized by the flames and it occurred to her that she was pretty ignorant about oil. And so her investigation began.
She writes from the perspective of the American consumer and starts by hanging out at a gas station. (The chapter headings include the price of oil when the events described take place and it was $1.62/gallon when she did her investigation for chapter 1.) This very first chapter sets the pattern for the rest of the book. First the reader gets a look at a particular link in the oil chain, in this case, Twin Peaks Petroleum in San Francisco. Then a bit of history behind it followed by some in-depth probing of the link which always includes the human faces behind it. (And there are some real characters.)
At TPP, the clerks have to deal with some difficult customers. No news there. But there are other problems such as "merchandise shrink", i.e. –employee theft. The stations' owner, Michael Gharib, says, "I make more money selling water than gas. And the gas gets shipped around the world and goes through a refinery and still my customers want it cheap." Hence gas stations became convenience stores. Margins are thin and being an independent station requires even more work since you don't have a Mobil or Shell sign on your lot.
Gas stations boomed in the 1920 with over 100,000 going up that decade. Gas was the same so the oil companies had to differentiate their product via other means. There were wars over who had the cleanest restrooms, trading stamps, and a whole host of other gimmicks. Then, like many things relating to oil, it all changed with the energy crises of the 1970s. I am just old enough to remember full service stations and the days before oil companies issued their own credit cards. Many stations closed and they went from being a place to have a "home away from home" experience to the junk food emporiums we know today.
Margonelli likes to highlight an important aspect of the big picture at the end of her chapters. Here in the first chapter it is the rather simple observation that Americans love their cars and that economic rationality doesn't seem to apply to our consumption of gasoline. As she notes, "But studies show that people love being in their cars even more than, say, being at work or at home. People prefer a half-hour commute to a shorter drive."
From the gas station we head to the distribution end and meet Roger, who drives a truck that delivers the gas to stations like Twin Peak petroleum. He spends a lot of his time breathing in gas fumes and stuck in California traffic. His dispatcher, Chris, is also profiled. For her too, the gas business is often about a thin profit margin. With the price of gas so volatile, she must make quick decisions about the prices Roger pays to fill his tanker truck. Oh, and wholesalers are known as jobbers in the trade.
The chapters on the refinery and drilling rig in Texas are very informative in that they explain how these operations work. Ever wonder how that sticky good becomes the gasoline you put in your car? Margonelli is happy to give a For Dummies explanation of what a refinery does. But what these chapters really emphasize is just how dangerous the work of getting that gasoline to your local station is. Refineries can leak and there are fires. They have a special klaxon and, when it sounds, workers know to run for their lives. Rigs are also very dangerous. The drilling system heading 10,000+ feet into the earth has a lot of parts that must be handled in a certain way. One slip up can mean the loss of a limb or worse. Until now, I never filled my car and thought that some guy somewhere had a big section of pipe flailing about near him. Moving a couple inches the wrong way could mean he loses his arm and gets one upside the head. Margonelli says that gas station pumps are modeled on ATMs because apparently American consumers find ATMs to wholesome or unimposing. In such a cozy atmosphere, who would think about the dangers encountered by the people who made sure there was gas for me to pump?
Chapters on the Strategic Petroleum Reserve and the NYMEX oil market round out the section taking place on our shores. Then it's off on a trip around the world to visit various oil producing countries. These chapters delve into the realpolitik behind oil and our foreign policy. This being the case, they are slightly more difficult reads if you're unfamiliar with the countries that Margonelli visits. But she does a good job of summarizing and simplifying for the layreader. In addition to the history lectures she gets on the ground and talks to people. You've got a warlord siphoning oil and reselling it? Margonelli visits him. Are there slums where those who don't enjoy the riches that oil brings live? We visit those places as well.
Venezuela is our first destination. The vagaries of Hugo Chávez are on display here along with his country's complicated relationship with mine. Oil was first discovered there in 1921 and immediately the U.S. government and U.S. oil companies were on the scene. Today Venezuela sells most of its oil to America despite having some harsh words for us. Known as "the devil's excrement" to some there, Venezuela seems to have a love/hate relationship with oil. It is at once Satan's shit but also seen as savior, a way to lift the people there up.
China's story is very different. It is one of a large, oil hungry country trying to deal with a steeply rising demand for cars and inefficient industry that gobbles up energy like Pac Man. This chapter is all about planning and development of electric cars. Much more depressing were those on Chad and Nigeria. These countries find themselves in situations similar to Venezuela but with even more dictatorial regimes in charge, rampant corruption, and plenty of violence.
It was very depressing to read how oil money in poor/developing countries rarely makes its way to the vast majority of citizens. An elite few almost always seem to benefit the most. Similarly dispiriting is reading about the Niger Delta and all the oil spilled there.
In these chapters about foreign countries the United States is always lurking in the background somewhere. The Chinese are looking to satisfy their oil needs under U.S. hegemony; Iran and the U.S. consider one another enemies; African countries have suffered under the decrees of the IMF and World Bank. Our oil consumption has consequences that we don't think about when we're at the pump that are environmental, economic, political, and moral in nature. Even George Bush declared we were addicted to the stuff.
Margonelli notes that our dependency on foreign oil will only increase. Rather than letting our oil diplomacy be carried out by the oil companies in various countries, she says our government will have to become increasingly involved directly in new ways. She also pleads for more conservation on our part.
Oil on the Brain is a fascinating book. I found it a good primer on the web of oil. The explanations of the mechanical side of things, e.g. – how oil rigs and refineries work, were interesting in their own right but they also illuminated just how deeply oil permeates our society. The chapters on foreign countries explained a lot but they also raised moral questions. We are something like 4% of the world's population yet we use in the neighborhood of 25% of the oil. With millions and millions of people in other countries mired in poverty while an elite few wallow in the wealth crude brings, do I then have any moral obligations, perforce? If I'm happy and willing to use oil from Nigeria, should I be more concerned about Shell screwing over the people there and letting those same folks shoulder the environmental burden of the equivalent of an Exxon Valdez sized spill every year? Purely here in the States, we have something similar where we are happy to let oil be drilled off the Gulf coast and shake our heads at the tragedy of a spill like we did last summer, but we're unwilling to drill in ANWR, the Great Lakes, or on the West and East coasts. One of Margonelli's best points is that most Americans see the business of oil as simply a series of economic transactions when, in fact, it is much more.
As I said above, this book is a primer. When I was done I thought about how it didn't go into depth about our relationship with Canada, from which we get a helluva lot of oil, if not the majority of the amount we import. It also didn't focus any time on Saudi Arabia, a country with which we have a relationship that has tremendous consequences worldwide. Margonelli left quite a bit out of her account but it's understandable. Oil on the Brain should be considered an introduction and springboard to further exploration of the topic of oil. And quite an interesting and thought-provoking intro it is.
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