Nigerian Oil Crisis Could Be Next Global Flashpoint

The February 2007 issue of Vanity Fair has in stimulating article by Sebastian Junger on Nigerian oil politics and U.S. national security. The piece starts with a discussion of a top U.S. governmental crisis simulation in which civil strife in northern Nigeria forces international petroleum companies to leave the country, causing a collapse of 800,000 barrels of light sweet crude per day. With global petroleum output already at peak, the drop in supply could have a significant effect on the U.S. market, expecially if it were combined with other production shocks, like terrorist attacks on oil production infrastructure around the globe:

The last two major recessions in this country were triggered by a spike in oil prices, and a crisis in Nigeria—America's fifth-largest oil supplier—could well be the next great triggering event. "The economic and national security risks of our dependence on oil—and especially on foreign oil—have reached unprecedented levels," former C.I.A. director Robert Gates (now secretary of defense) warned in his introduction to the Oil ShockWave–study report. "To protect ourselves, we must transcend the narrow interests that have historically stood in the way of a coherent oil security strategy."

In January 2006, less than seven months after the first Oil ShockWave conference—almost as if they'd been given walk-on parts in the simulation—several boatloads of heavily armed Ijaw militants overran a Shell oil facility in the Niger delta and seized four Western oil workers. The militants called themselves the Movement for the Emancipation of the Niger Delta and said they were protesting the environmental devastation caused by the oil industry, as well as the appalling conditions in which most delta inhabitants live. There are no schools, medical clinics, or social services in most delta villages. There is no clean drinking water in delta villages. There are almost no paying jobs in delta villages. People eke out a living by fishing while, all around them, oil wells owned by foreign companies pump billions of dollars' worth of oil a year. It was time, according to MEND, for this injustice to stop.

The immediate effect of the attack was a roughly 250,000-barrel-a-day drop in Nigerian oil production and a temporary bump in world oil prices. MEND released the hostages a few weeks later, but the problems were far from over. MEND's demands included the release of two Ijaw leaders who were being held in prison, $1.5 billion in restitution for damage to the delicate delta environment, a 50 percent claim on all oil pumped out of the creeks, and development aid to the desperately poor villages of the delta. MEND threatened that, if these demands were not met—which they weren't—it would wage war on the foreign oil companies in Nigeria.

"Leave our land while you can or die in it," a MEND spokesman warned in an e-mail statement after the attack. "Our aim is to totally destroy the capacity of the Nigerian government to export oil."

Read the whole thing. Nigeria is one of the classic cases of Third World development in comparative politics, and Junger has a incisive discussion of the country's state breakdown, a situation that fuels the formation of rebel organizations:

Every sector of society has been left to fend for itself. The airline industry, for example, is so slack in its maintenance that it has seen three catastrophic plane crashes in the past 16 months, which together have killed more than 300 people. The airport at Port Harcourt was shut down in 2005 after an incoming Air France flight plowed into a herd of cows that had wandered onto the runway; it still has not reopened. Tens of millions of people live in urban slums without water or sanitation, restaurants have to hire guards with AK-47s to protect the diners, and the levels of chaos and street violence rival that of many countries at war. A dead man lay on the street near my hotel for two days before someone finally came to take him away. Even during Liberia's darkest days of civil war, the dead were usually gathered up and buried faster than that.

Junger also goes on about the precariousness of global oil supplies, suggesting that world output could dry up by 2040. That might be too pessimistic an estimate. Nevertheless, developing alternative energy sources should be a top priority for the global community, even if the most optimistic projections of long-term oil abundance prove correct.