“This is why oil is so valuable: one tank of gas from a typical S.U.V. has the energy equivalent of more than 60,000 man-hours of work-roughly 100 men working around the clock for nearly a month. That is the power that the American consumer can access for about $60 at the gasoline pump. If gasoline were a person, we would be paying 10 cents an hour for his labor. Easily accessible reserves are running dry, though, which means that the industry must develop increasingly ingenious-and costly-techniques for getting at the oil. Deepwater drilling, for example, now happens so far offshore that rigs can no longer be anchored to the seabed; they must be held in place by an array of propellers, each the size of a two-car garage. The cost of deepwater drilling is close to twice that in shallow water.
As a result, oil is one of the few commodities with virtually no surplus production; just about every drop of oil that gets pumped gets used. The world currently goes through 84 million barrels a day, a figure that is expected to rise to almost 120 million barrels in the next 25 years. As that happens, oil will become more and more expensive to extract. When oil was first exploited, in 1859, the energy equivalent of one barrel of oil was required to pump 50 barrels of oil out of the ground. Now that ratio is one-to-five. Thus far, nearly half of the proven, exploitable oil reserves in the world have been used up. Barring the discovery of new reserves or new drilling technology, some experts predict the world will run out of oil by 2040.
Added to these technological problems is the fact that-as if by some divine prank-most of the world’s oil reserves happen to be in politically unstable parts of the world. (The alternative theory is that oil exploitation tends to de-stabilize underdeveloped countries.) Because of the financial risks involved, oil reserves in politically stable countries have more value, per barrel, than oil in politically unstable countries. As we speak, the value of Nigerian oil-as a function of the capital investment that must be risked to produce it-is in steady decline.
That is MEND’s trump card. It has several times threatened to shut down all Nigerian oil production, but it’s possible MEND doesn’t quite dare, because of the chance it will provoke a military retaliation it wouldn’t survive. By the same token, the Nigerian military has threatened to sweep the delta with overwhelming force, but it doesn’t know whether that might force MEND to carry out one devastating counterstrike-taking out the Bonny Island Liquefied Natural Gas facility with a shoulder-fired rocket, for example. An act of sabotage on this scale could drive Shell and the other oil companies from Nigeria for good, completely wiping out the national economy. One major company, Willbros, has already discontinued operations in Nigeria because of the security threat.” -Sebastian Junger, Vanity Fair, 2007