Lukoil had used a wee bit of its new Western-fed capitalization to acquire the moribund Getty Petroleum Marketing Inc., with its thirteen hundred gas station properties dotting the Eastern Seaboard of the United States. That made it the first Russian company to own an American company listed on the New York Stock Exchange.

The Russian president had been whisked into a side room for an audience with ExxonMobil’s CEO, Lee Raymond, a meeting laid out in spectacular detail in Steve Coll’s book Private Empire. Raymond, who seemed to believe that his position as head of the world’s most profitable corporation made him approximately equal in power and stature to the president of the Russian Federation, appeared to have rattled Putin. Putin was aware that ExxonMobil had been negotiating to buy a 30 percent stake in Russia’s most impressive up-and-coming privately held oil company, Yukos—a company that might one day challenge Lukoil as Russia’s biggest producer of crude. What Putin did not fully appreciate before his talk with Raymond, however, was that ExxonMobil was in the habit of getting final say in all of its partnership ventures. In Coll’s vivid sketch of the meeting at the stock exchange, Raymond asked for an assurance from Putin that ExxonMobil would one day be permitted to acquire a majority stake in Yukos. He more or less demanded it as a condition for moving forward. “I need to have an understanding of our ability to get to fifty-one percent,” Raymond told Putin. “That means if I want to have Yukos do something, I’m going to have to come and talk to you?” Putin asked. “Yeah, that’s not so awful,” Raymond told him. “That’s true in a lot of places in the world.” Coll detailed the aftermath of the meeting also: Raymond would report back to the home office in Texas that his meeting with Vladimir had gone swimmingly and that the ExxonMobil-Yukos deal was on track. Putin saw it differently. He had been offended by the American executive’s arrogance. According to Leonard Coburn, a U.S. Department of Energy official who understood the enormous strategic importance of the Russian oil industry to the country itself, Putin had also been “a little scared.” The Russian Federation president found himself in a bind. Without the weird parallel Soviet economic netherworld that had channeled and shielded Russia’s oil and gas bounty, his country’s economic future was in uncharted territory. The way things were going, the post-U.S.S.R. Russian economy would basically be entirely dependent on its oil and gas industry’s ability to compete in the world market.

Turns out Putin made mistakes over the past fifteen years—big, fundamental, hard-to-reverse mistakes. That can happen when you try to build your country’s future on the oil and gas industry. Putin’s decisions stripped his country of its ability to compete fairly in the global economy or global politics and limited its strategic options to the unsavory list he and his apparatchiks are ticking down today. His efforts to restore Russia as a world-stage superpower no longer depend on capacity and know-how. They depend on cheating. Putin and his minions cheat at the financial markets. They cheat at the Olympics. They cheat at their own fake democracy. They cheat other people out of their democracies.

“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.”

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.

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.”

In 1973, the AEC tried again in Colorado, in Project Rio Blanco, where this time it was three thirty-three-kiloton nuclear bombs, detonated simultaneously, at three separate depths within 851 feet of one another. Radioactivity increased. Commercial prospects did not. In all, these gas-happy experiments cost about $82 million. The accountants figured that at the assumed rate, even with costs coming down, even if they took that entire coveted 317 trillion cubic feet of natural gas, the best they could hope to recover was about 40 percent of the cash outlay. And so died our nation’s experiment in nuclear fracking, way back in 1973, after four glorious years of trying really, really hard.

“Natural gas was in such short supply that Congress passed a law in 1978 that essentially outlawed the construction of new gas-fired power plants,” noted Wall Street Journal reporter Russell Gold in his excellent 2014 book, The Boom. “By the time the law was repealed nine years later, the United States had built 81 gigawatts’ worth of power plants that burned dirty, reliable chunks of fossilized carbon—about a quarter of all coal plants that were still in use more than thirty years later.”

Unintended consequences

But the results were promising. Even the most successful gel fracks hadn’t shown much staying power. Gel-fracked wells might produce a million cubic feet of gas in the first days but then drop off pretty quickly. The culprit was that gummy gel that stayed behind, clogging the sand-propped passages in the shale. But the S. H. Griffin No. 4, fracked with slickwater fluid, was still producing almost 1.5 million cubic feet of gas per day in September 1998, ninety days after the initial frack.

The combination of slickwatered hydraulic fracturing and horizontal drilling was the breakthrough the oil and gas industry had been chasing for years.

Hydraulic fracking and horizontal drilling have rewritten the whole global energy equation and the future of a whole bunch of countries with it. “It is one of the most extraordinarily important, disruptive, technologically driven changes in the history of energy,” the global head of commodity research at Citigroup said of the fracking boom. “It was revolutionary for the U.S. economy and it was revolutionary geopolitically.”

“Siberia is the simplest environment in the world,” he would say. “The West Siberian landscape has not changed in 130 million years….You can go a thousand kilometers; it’s the same goddamned sand. All across, it’s 18 percent porosity. The water saturation is very consistent. The other no-brainer is [that] the reservoir pressure is 4,500 pounds and the bubble point’s 1,800. In other words, it’s pure oil. Man, it doesn’t get any simpler than that.”

Siberian oil

Khodorkovsky’s cardinal sin against the Russian state was being overly successful and overly independent. While production capacity at Yukos had doubled in just four years, production at Russia’s state-controlled oil companies like Lukoil and Rosneft edged up by barely a percent or two a year. Profits at Yukos soared, as did its valuation—from $320 million to $21 billion—as did Khodorkovsky’s personal fortune.

It wasn’t just the noise about promoting anti-Putin political parties; it was worse: Putin learned he was negotiating the deal with Lee Raymond and Raymond’s number two, Rex Tillerson, that would give ExxonMobil 30 percent of Yukos—a deal that might one day permit the American company to gain controlling ownership of the most able and impressive company in the single crucial industry in Russia.

Private empire?

Team Putin began with a series of audits of Yukos in the weeks after Khodorkovsky’s arrest. By the time the federation’s tax accounting department was done, Yukos had received bills for back taxes—including interest and penalties—totaling $27.5 billion. This would have been a difficult bill to settle in the best of circumstances, but because Putin’s government had also frozen the corporation’s liquid assets and crippled its production operations, Yukos found it impossible to pay. Putin’s Russian Federal Property Fund provided a solution, though. The fund auctioned off Yukos’s key subsidiary, Yuganskneftegaz, which accounted for 60 percent of its annual oil production and an even greater percentage of its $36 billion valuation. The auction, which took place on December 19, 2004, lasted in the neighborhood of six minutes. The winning bid was a highly discounted $9.3 billion. The only real surprise was the successful bidder, a corporation nobody in Moscow had ever heard of—the Baikalfinansgrup. When journalists got hold of the group’s registration documents, they discovered Baikalfinans was just two weeks old and had been incorporated with an initial capitalization of $300. Its “offices” were above a vodka bar in a small building in the remote medieval town of Tver, three hours from Moscow. The address was claimed as corporate headquarters by 150 other companies, according to Masha Gessen, “none of which appeared to have any physical assets.” The mystery of how a $300 company housed above a saloon bought Russia’s most capable oil company for $9.3 billion didn’t last long. A few days after the auction, the state-owned oil company, Rosneft, tapped government funds to relieve the $9,300,000,300 Baikalfinansgrup of its single asset, Yuganskneftegaz. Rosneft, with a lot of help from Putin and a few other surprising sources, would sweep in the rest of Yukos’s discounted assets over the next few years. “The acquisition of Yukos triples the size of Rosneft,” Thane Gustafson explained, “and what had been a very minor and no-account company suddenly becomes the largest oil company in Russia.” It was flat-out state-sponsored theft of a legitimate company: the Kremlin just shoplifting a capitalist something that might have otherwise actually succeeded on its own merits.

a very formidable Chesapeake land machine to ‘capture the flag’ in big plays.” In just seven years—from 2000 to 2007—the company locked up drilling and mineral rights on more than ten million acres in the United States, equivalent to owning everything under a landmass the size of Maryland, with Connecticut tossed in, too.

Oklahoma Citians could mark the time, to the day, when their city actually gained entry into the Urban Pantheon. “When I look over our history I think there are two birthdays,” Oklahoma City’s mayor, David Holt, likes to say. “One is the day we were created on April 22, 1889, and the second date is when we moved into the first tier of American cities. That’s the day the Thunder took the court.” That is the day, Holt went on, “our descendants will mark all our history as either before or afterwards. It is never going to be the same again….People have this pride in our city now and they take it for granted that we are now part of American pop culture. To feel relevant living here and people knowing where OKC is. That if one of the most famous people on the planet, Kevin Durant, can live here, then obviously it’s an important place in America and the world.”

The entire state of Oklahoma, let alone Oklahoma City, had never fielded a team in one of the four major U.S. sports leagues—the NFL, the NBA, Major League Baseball, or the NHL. Stern suggested OKC might want to start with training wheels, so to speak, in the smallest and least competitive league. He told the mayor as he ushered him out of his New York office, “I see an NHL team in your future.”

His favorite book, Tillerson had told the readers of Scouting magazine, was Ayn Rand’s Atlas Shrugged, that bible of bright, contrarian high school sophomores and adult free-market zealots, in which slug-brained bureaucrats and politicians are the obstacles blocking the exalted few individuals of drive and genius who are the only real heroes who can be counted on to power world progress, if they could only be allowed to operate unfettered by the small, the meek, the uninformed, the uncertain.

As president, the younger Bush did give his fellow oilmen a little fright in 2005, when ExxonMobil and other companies were booking gargantuan profits, largely because the price of oil—along with the price of gasoline at the pump—was on the rise. “With $55 [a barrel] oil, we don’t need incentives for oil and gas companies to explore,” the president told a group of newspaper publishers that spring. Bush’s policy team that year stunned the oil and gas industry by broaching the possibility of a reduction or repeal of the hallowed oil depletion allowance and of new tax breaks

But, according to the federal investigators, most everything that could have gone wrong on the Deepwater Horizon did go wrong. Halliburton had used crappy cement to seal the well bore. The crew was a bit blasé about monitoring and controlling the pressure in the days leading up to the blowout. And once oil and gas kicked all the way up to the rig itself, the blowout preventer’s stoppers and pipe cutters failed. Differentials in pressures caused the piping (also crappy) to buckle, and the flammable oil and gas just kept racing up into the rig until it exploded. The first explosion on the rig shut off all electrical and hydraulic power to the blowout preventer. Fortunately, those last-resort blades have two separate backup battery systems that will trigger the cutting of the pipes. Unfortunately, both were mis-wired. Fortunately, one was so ham-handedly mis-wired that it actually made a cut. Unfortunately, the crappy piping was already so buckled that it was only partially cut.

A 580-page plan had been developed and adopted by all the major oil companies over the twenty years since the Exxon Valdez spill, and still the best cleanup tool they had at their disposal was diaper filling. Honestly. The most profitable corporations in the history of corporations. And the only thing their two-decade brainstorm produced was fancier paper towels.

A 2006 study found that an average of 11 million gallons of oil per year, or 546 million gallons over the preceding fifty years, had leaked into the Niger delta. That’s one Exxon Valdez–sized disaster every year, and the government there didn’t even require the oil producers to have paper towels on hand.

In November 2009, Silverstein published a long investigative piece on the Harper’s website revealing the existence of a multiyear federal investigation into Teodorin’s finances. The burning question of the U.S. government inquiry was this: How could a man whose position as Equatorial Guinea’s minister of agriculture and forestry paid him about $60,000 a year move $75 million through U.S. banks in order to buy a sixteen-acre Malibu estate with a swimming pool, tennis courts, and a four-hole golf course, a $38.5 million private jet, and an armada of cars insured at a value of $10 million?

The basic problem is that oil doesn’t happily coexist with other industries upon which you might build a reasonably stable national economy. That’s true in the third world, the first world, and even in the world in between, e.g. Russia. It creates such large, up-front, sweat-free gains for connected elites that no one wants to do anything else but chase the oil jackpot. And as oil crowds out other industries, the profits don’t ever seem to end up redounding to the nation at large. Extracting oil takes a lot of up-front capital investment, but that expensive initial, physical investment doesn’t create anything utile for any other purpose. The technology and infrastructure of pumping oil and gas out of the ground don’t transfer usefully to any other follow-on industry. Worse, oil infrastructure is often environmentally destructive, which thereby screws up other economically productive things that could be done with that same land. Oil extraction is much more capital-intensive than it is labor-intensive—which means it doesn’t produce a lot of lasting jobs. But in the end, it does produce big revenues when it’s sold on the global market. That sets the stage for grand-scale corruption of the political class: people who can maneuver themselves into getting a cut of that sale price of oil will find themselves quickly rich, whether or not they actually expend any effort to pump the stuff out of the ground. Political elites that can get themselves in the catbird seat when it comes to oil revenues will have every reason to curry favor with the oil companies doing the drilling, and every reason to fight anyone else who might take political power and thereby edge in on the financial teat they’ve stuck themselves to. Even with less rapacious political elites, there’s still the baseline problem that oil is a tradable commodity subject to wild international winds; with big swings in the price of oil, any effort at long-term, sane budgeting and investment for the population’s basic needs is impossible in a country newly dependent on oil revenues for its cash.

Karl would sometimes tell people the story of how she began the study that led to her first book, The Paradox of Plenty: “A long time ago when I was looking for a dissertation topic, I went down to Venezuela to interview the founder of OPEC, a man named Juan Pablo Pérez Alfonzo, and I asked him some questions about the founding of OPEC…. “And he said to me, ‘Teresita, you know, you’re such a bright young person. Why are you studying OPEC? Why don’t you see what oil is doing to us, the oil exporters?’ “And I said, ‘What do you mean?’ “And he said, ‘Oil is the excrement of the devil.’ ”

Equatorial Guinea won its independence from Spain in 1968 and thereafter found itself at the tender mercies of the extended Obiang family. Francisco Macías Nguema, the country’s first president, guarded his new position with a fierce and lethal jealousy. His security team is estimated to have killed or driven away more than a third of the country’s citizenry during his eleven-year reign. President Macías, who billed himself as the “Leader of Steel,” the “Implacable Apostle of Freedom,” and “Divine Miracle” (and “woe be to anyone who snickered on hearing it,” remarked one foreign diplomat), made examples of some of his political opponents by having them crucified in public view. Macías was also notorious for a mass murder of his political foes in a soccer stadium, in which the public address system blared the song “Those Were the Days” to drown out the dying screams of the victims. The CIA’s World Factbook is typically terse on the subject: in the eleven years after independence, Equatorial Guinea’s first autocratic ruler “virtually destroyed all of the country’s political, economic, and social institutions.”

Where the ministers in most oil-producing countries in Africa might demand anywhere from 50 to 90 percent of a foreign company’s locally generated revenue, Obiang was happy to settle for a third, or a quarter, or even 15 percent. Equatorial Guinea has “by far the most generous tax and profit-sharing provisions in the region,” according to a 1999 report from the International Monetary Fund.

“The United States wouldn’t openly criticize the regime,” as the authors of a Pulitzer Center study would succinctly put it, “and the regime guaranteed the U.S. oil industry near-exclusive access to the country’s national oil reserves.” Every Saturday morning, a Houston Express flight arrived in Malabo (nonstop from Texas!), carrying a new cadre of oil workers.

To an American audience, sure, the arrests in the summer of 2010 exposed something right at the overlap of exciting and ridiculous—dead drops, fake accents, and code words, oh my. But it could only be funny if you didn’t think much was at stake; for the Russians, this was their best effort. And the excruciating ineptitude of what were supposed to be the Kremlin’s elite spies was now on display for a world audience. The evidence was irrefutable: the Russians were losing their edge even in the arenas where they once enjoyed their most trumpeted victories.

This cocktail of water, sand, and chemicals, with a hint of gels, foams, and maybe even bean paste, is mixed and stirred on the surface and then pumped in at pressures of up to nine thousand pounds per square inch, which is about thirty times the force needed to shoot water from a fire hose to the top of a thirty-story building. Powerful enough to crack open more micro-fissures in the tight and stingy shale and loosen up all that previously impossible-to-capture oil and gas. The final steps are repeated over and over (explode and inject, rinse and repeat) along the length of the horizontal portion of the well. The process might take four or five weeks in all, and the cost is about three times that of a traditional vertical well.

But then, there’s the water, too. In the beginning, there is the slickwater, that chemically contaminated cocktail of water-based liquid, which drillers like Chesapeake shoot by the millions of barrels deep into the ground to shake free natural gas deposits. Once the well starts producing the desired hydrocarbons, millions of barrels of water come up too. That’s called flowback water, and it has all the same contaminants as the slickwater, along with additional salt deposits and something called naturally occurring radioactive material, often known by its acronym, I kid you not, NORM. Cheers! At least everyone knows its name. Much of that flowback water is brand new to the surface, having resided deep in the underground rock, undisturbed, for eons. This “produced” water is up to five times more salty than seawater and can contain chemicals, radium-226, radon-222, uranium-238, methane, and crude oil. Some of the flowback is stored in tanks and recycled for subsequent fracking ventures; some is shot through cement-encased well bores deep enough under the earth’s surface so as to make it theoretically impossible to contaminate the aquifers.

Historically speaking, in America as in the rest of the world, it’s proven more cost-effective for oil and gas drillers to grease the political classes with cash and favors in order to persuade them to let producers escape the hard work of minimizing that damage. The submission of government officials has kept the cost of complying with health and safety regulations comfortably low. Very little has been asked of the oil and gas industry, and very little expected. It’s no great wonder that BP’s feckless attempt at controlling and cleaning up the largest oil spill in the history of mankind depended largely on paper towels. Why would it be better prepared? These were “best practices,” according to the industry. The public officials whose job it is to safeguard the general health and welfare of all of us didn’t demand anything more.

Humans had already proven themselves capable of inducing seismicity, and it didn’t require a nuclear blast. Back in the 1960s, technicians at the Rocky Mountain Arsenal chemical weapons manufacturing center thought they had come up with a novel hazmat disposal system: over the course of five years, they had simply injected 165 million gallons of hazardous liquid waste deep underground. That genius move triggered a seismic swarm topped off by a 5.3-magnitude earthquake near Denver. The weaponeers halted the injections immediately. “The U.S. Army Corps of Engineers and the U.S. Geological Survey (USGS) determined that a deep, hazardous waste disposal well at the Rocky Mountain Arsenal was causing significant seismic events in the vicinity of Denver, Colorado,” was the very tardy admission embedded in an Environmental Protection Agency study a quarter century later.

Putin and Sechin had never seen the country’s most valuable natural resources as a tool for swelling Russian household income or the bank accounts of their investors. The possibilities inherent in democracy and capitalism had not exactly captured the imaginations of these two modern Russian leaders. “[Sechin’s] doctoral dissertation in 1998 on oil transport networks drips with contempt for market forces,” The Economist explained in a profile of Russia’s oil tsar. “Whereas market economies evaluate projects based on expected returns on investment, Mr. Sechin praised the Soviet nuclear-weapons and space programmes, which he said operated on a different principle: ‘at any price necessary.’ ” Putin and Sechin believed their energy industry was about restoring Russian honor, about winning prestige in the eyes of the world, à la the cosmonautical Soviet space program or the Soviet nuclear arsenal. Most of all they were convinced they could use all that Russian oil and gas, à la nuclear warheads and ICBMs, for power and leverage in advancing Putin’s foreign policy aims. Russian oil and gas would be treated as the property of the president, and they could and would be weaponized to serve the president’s purposes. By the time Putin was regaining the presidency in 2012, this stealth weapons program was well under way; it was mature, even. Trace it back to his first term, back in 2005, when President Putin glommed on to a new foreign policy strategy proposed by his chief economic aide titled “Energy Superpower.”

Nord Stream had been on line for almost six months in March 2012, when Putin won a third presidential term. Russia was supplying the European Union 40 percent of its natural gas imports while cutting Ukraine out of the deal. Gazprom supplied every single cubic meter of imported natural gas up the line to EU members Bulgaria, Slovenia, Slovakia, Latvia, Estonia, and Finland. It supplied about a third of Germany’s natural gas imports (as well as a third of its oil imports). Add to that, Russia had completed a new pipeline for pumping oil into China, the country with the fastest-growing economy and the fastest-growing energy needs on the planet. Meanwhile, construction on the South Stream project was about to commence, adding Austria and Italy to Gazprom’s soon-to-be-satisfied-but-wary customers. To discerning eyes in 2012, a map of the two pipelines transiting much of the continent appeared, as Zygar puts it, “like a pair of giant pincers with which Russia would squeeze Europe.”

https://en.m.wikipedia.org/wiki/File:Major_russian_gas_pipelines_to_europe.png

Nord Stream was a pipeline project that was built from both sides at once—from Russia and from Germany. Same pipeline, same materials, same building standards. But the Russian side of the construction project (led by the Rotenberg brothers of St. Petersburg, and remember them) cost three times as much, per mile of pipeline, as the German side did. That money was not going into the pension and health fund of the Russian pipe fitters’ union; it went into the pockets of Putin and his pals.

The Guccifer saga was a weird few months in the annals of criminal hacking, but apparently somebody in Vladimir Putin’s Kremlin was paying very close attention. Why should some underemployed Romanian paint salesman be having all the fun in America?

But the newest report on Sochi, updated just two months before the opening of the Games, topped all of Nemtsov’s previous broadsides against Putin. It was designed to hit when and where it would most hurt. The numbers were startling. Putin’s record $12 billion Winter Games budget had ballooned to $50 billion, according to the report. This made the final price tag for Sochi the biggest ever for an Olympic Games, winter or summer. Almost ten times the cost of the immediately previous 2010 Vancouver Games. More than the cost of the previous twenty-one Winter Olympics combined.

Putin’s team in the Kremlin was delighted to utilize a man with Dmitry Firtash’s special skills and talents to shape Ukraine to its liking, to turn it from its increasingly worrying flirtation with the West, with the European Union, with—oh, God—maybe even NATO. They cut Firtash a sweetheart deal in Ukraine before the first year of Yushchenko’s presidency was over. Firtash’s new company, RosUkrEnergo, was given the exclusive right to buy gas from Russia to sell to Ukraine. At a very large profit. About $800 million clear profit in 2007 alone. Firtash’s company wasn’t making anything. It wasn’t even necessarily moving anything. It wasn’t really doing anything at all except getting paid. Ukraine could just as easily have bought the gas with no middleman and no markup, but Putin wanted both the middleman and the markup; Dmitry would turn out to be handy!

Manafort also got some backup from more mainstream and burnished quarters, though this help was a bit pricier. He arranged for a respected American law firm to produce an “independent” report on the Tymoshenko legal proceedings. That firm—Skadden, Arps, Slate, Meagher & Flom—didn’t appear to rush to judgment. The three-hundred-page report (with eleven separate appendixes, including a helpful dramatis personae) was not released until December 2012, more than a year after the completion of the trial and more than a year into Tymoshenko’s prison term.

According to ministry officials back in Kyiv, Skadden had done all this expert legal work on a more or less pro bono basis—how nice! Ukraine claimed to have paid the firm a meager $12,000 fee for the report. The lead attorney on the report—Obama’s first White House counsel, Greg Craig—refused to divulge how much or how little his fancy rich-guy law firm had actually been paid. But it would turn out that Skadden had the same mercenary tendencies as Firtash and the rest. Thanks to an arrangement fixed up by Paul Manafort, Skadden received from private sources in Kyiv $4,657,568.91 (accounted for by federal prosecutors right down to the last penny!). Oh, and: “In addition to being retained to write the report,” read one of Special Counsel Mueller’s legal filings, “[Skadden] was retained to represent Ukraine itself, including in connection with the Tymoshenko case and to provide training to the trial team prosecuting Tymoshenko.” So much for the idea that Skadden was supposed to be an impartial observer of these proceedings.

ExxonMobil had its own foreign policy to serve its own specific interests. And that corporate foreign policy only sometimes overlapped with the foreign policy of the United States. “I’m not a U.S. company,” Tillerson’s predecessor, Lee Raymond, once said, “and I don’t make decisions based on what’s good for the U.S.” ExxonMobil had never been shy about calling on the U.S. State Department when it was having trouble with some foreign government (costing the corporation money!), but ExxonMobil’s leaders felt no obligation to return the favor.

In May 2013, in the Oklahoma City suburb of Moore, seven schoolkids were killed when 210-mile-an-hour winds from an EF5 tornado blew apart their elementary school. “A child is pulled from the rubble of the Plaza Towers Elementary” is a caption from photos in the morning newspaper that you can’t unsee. There had been no room in the school strong enough to shelter the children from the fatal fury of that storm.

The price of crude oil had been hovering near or above $100 a barrel for more than three years. Oklahoma energy companies were banking record profits. A nice portion of those profits owed to the huge jump in drilling inside Oklahoma’s state borders. Crude oil production was up by almost 25 percent in the last year alone. The oil and gas industry had accounted for about 8 percent of the gross state product in pre-boom 2003; it accounted for 18.4 percent in 2014. Funny thing was, the state government of Oklahoma had managed to starve itself of the benefits of this incredible rise in economic activity inside its borders. The state’s signature industry was booming, but the state’s treasury was bare. From 2008 to 2013, tax revenues from oil and gas production had actually dropped from $1.14 billion to $529 million. More stark was this fact: at the height of the last big boom in 1982, oil and gas taxes accounted for 27.4 percent of all state tax revenues; at the height of the new boom, oil and gas taxes accounted for just 3.9 percent.

Whereas horizontal drillers paid 11.7 percent in production taxes in Wyoming, 11.5 percent in North Dakota, and 6.7 percent in Texas, horizontal drillers in Oklahoma paid an effective total rate of somewhere around just 3 percent. Check the school budgets to see how that works out in the end.

But the tax break that Harold Hamm and the other oil pooh-bahs wrote for themselves was forever. No backsies. A few legislators tried to joke it away. “Nothing is permanent in this building,” the house Speaker, Jeff Hickman, said during the floor debate on the bill. “I firmly believe if Elvis had died in this building he would be alive today.” But good luck getting the 75 percent vote needed to raise the taxes on drillers, ever again. The head of government and regulatory affairs at Continental Resources started calling friends in the business as soon as he got the good news. “You’re not gonna believe this,” he told one former co-worker. “We got this thing permanent.” “Harold [Hamm] can’t pay you enough for what that’s worth,” the friend answered. When Mike Cantrell looked back a few years later, as the consequences of oil and gas’s big win in the legislature had become clear, when the hole in the state budget had ballooned up to nearly $1 billion, he felt real regret. But he also looked back with a twenty-twenty understanding of how easy it had been, of how money, as he would say, most always trumps merit in politics. Of how much brute power the industry has over the people elected to keep it in check.

And indeed, by 2014, the bright red star of Russian energy was dimming; Rosneft was running on fumes. The company’s production was flat, and Sechin had just been forced to go to Putin hat in hand to ask for $42 billion from the government treasury to help him make ends meet. That alone tells you something about the skill and capability of Russian business under Putin, when even one of the biggest oil companies on earth, in one of the world’s most oil-rich nations, with the price per barrel of crude bouncing along at spectacular highs, doesn’t make money.

In Steven Lee Myers’s fascinating and psychologically rich 2015 biography of Putin, The New Tsar, we get a clear view of Putin’s me-against-the-world sense of self at that crucial time in his presidency.

The United States, meanwhile, unleashed a very specific new sanction it had been threatening for months. The wiggle room allowed for dealing with Rosneft and the rest of the Russian oil industry was officially closed. Prior deal or no, the Obama administration declared that all American companies had to cease operations in Russia. Even ongoing operations. No more grandfather clause. On September 11, 2014, Exxon thought it had forty days or so left to find the big prize in the Russian Arctic, give or take the weather.

The alleged money laundering for which Yevtushenkov was charged had taken place nearly a decade earlier. But the actual malefaction that got him arrested was much more recent: Yevtushenkov and his privately owned oil company had become a source of great and ongoing embarrassment to Sechin. While Rosneft lumbered in place, bleeding cash, Bashneft was thriving, due almost entirely to Yevtushenkov’s management. The Russian billionaire had first invested in Bashneft back in 2005, gained a controlling stake in the company in 2009, and then transformed the lazy old Soviet-era company into a juggernaut. By 2014, Yevtushenkov’s company was a darling of the Western investment crowd—and for good reason. Bashneft was the fastest-growing private oil driller in Russia, increasing its production almost 10 percent in a single year and piling up reserves. The company’s stock price had tripled in just four years, and when its chieftain had gone to London in June 2014 to roadshow an initial public offering on the stock exchange there, investors flocked to the $800-a-night Corinthia Hotel to hear his pitch. (This was particularly galling to Sechin, who put a serious offer on the table to acquire Bashneft the previous year and had been, as the Financial Times put it, “rebuffed.”)

One unexpected piece of collateral damage in Sechin’s new crocodile act was the serious injury to the standing of the economic development minister at the Kremlin, Alexei Ulyukayev. Minister Ulyukayev had had the temerity to voice his opinion that Bashneft should go to the highest bidder on the open market. And Rosneft should stay out of it. For my enemies…Sechin invited Ulyukayev to his home and, truly gangster-style, presented him with a gift basket of his famous homemade sausages, some fine wine, and, unbeknownst to his guest, $2 million worth of rubles, in cash, stuffed into the bottom of the parcel. Sechin then had the minister arrested on the spot (the FSB gendarmes were conveniently there, at the ready) for soliciting and receiving a bribe. Ulyukayev was sentenced to eight years in prison and ordered to pay a $2.2 million fine. That takes care of him.

Oklahoma in the first six months of 2014 alone and 268 magnitude 3.0 or better. That’s in a state that had averaged fewer than two 3.0-plus quakes annually for the sixty years before 2008. The cause seemed pretty clear to anybody paying attention: the increase in seismicity was concurrent with the increase in newfangled, “unconventional” oil and gas drilling in the state.

“Heart of Texas” drew followers by the tens of thousands, all of whom could be spoon-fed content devised by Russian agents in St. Petersburg and in turn pass it on to who knows how many Facebook friends and Twitter followers. “Heart of Texas” was one of scores of separate IRA-controlled Facebook pages—not to mention thousands more social media identities and accounts operating on Twitter, Instagram, and YouTube—all created at 55 Savushkina.

“At first we were forced to watch the ‘House of Cards’ in English,” said one of the trolls who worked at IRA in 2015. “It was necessary to know all the main problems of the United States of America. Tax problems, the problem of gays, sexual minorities, weapons. Our goal wasn’t to turn Americans toward Russia. Our goal was to set Americans against their own government. To provoke unrest, provoke dissatisfaction.”

Now in his twentieth year running the show, Vladimir Putin presides over a metaphysical unforced error: the tragic scuppering of one of the potentially great nations in the world. Russia has been assiduously engineered into a sclerotic dictatorship; its economy wholly dependent on its one indispensable industry, which is by design almost solely monopolized by its big, lousy, noncompetitive state-controlled oil and gas companies, which are all run by spies or thugs or judo guys, and almost exclusively for the benefit of Vladimir Putin and his global aims.

Let that sink in for a second: if you’re a fifteen-year-old boy, your life expectancy is three years longer if you are in Haiti than in Russia. Russia under Putin has become warped and stunted—a gigantic multi-continental country of 150 million souls, living on an economy considerably smaller than Italy’s, with male life expectancy so low that you might think the national pastime really was Russian roulette. This is a manifestation of a recognizable and widespread phenomenon—the Resource Curse—which has happened over and over again, with varying degrees of despair, from the Gulf of Guinea to the southern Great Plains. But Russia added a whole new twist to the Curse, a twist that helps explain the international order of things right now—or the lack thereof. When the Resource Curse takes hold in a country as big and influential and aggressive as twenty-first-century Russia, it turns out to be the entire world’s problem.

if the problem is that Russia’s behavior is too outré to be accepted in the global economy, then change the expectations for what counts as outré. Be the leveler. Corrupt other countries. Gain control over the former Soviet states in the near abroad by owning their politicians, by controlling the range of possibilities their people are allowed to choose for themselves. Ruin exemplars of governance and responsive democracy. Support separatism and the dissolution of bonds and treaties and Western norms wherever they’re vulnerable.

As Special Counsel Mueller and reporters throughout Europe and America have made clear, the Russian Federation ultimately embarked on a deliberate and aggressive campaign to tear apart Western alliances, to rot democracy, and to piss in the punch bowl of free elections all over the civilized world. It continues to this day. And Putin isn’t doing this because of Russia’s strength. Not according to people who have watched the action up close. Russia “gives the impression that I am a lion who walks through the world hitting France with one paw, with the other Britain and America,” says Romanian security expert Dan Dungaciu. “But it is not a lion. It is rather in the role of a hyena, which senses a crisis and goes there and plays on the crisis.” The leaders of actually strong countries who have pushed back against Putin understand too. “I understand why he has to do this—to prove he’s a man,” Germany’s chancellor, Angela Merkel, has said. “He’s afraid of his own weakness. Russia has nothing, no successful politics or economy. All they have is this.”

In May 2016, they noted that while North Dakota, the other great shale boom state, had increased its spending per student by 26 percent in the previous eight years, Oklahoma had gone in the opposite direction in that same period—down by a nation-leading 24 percent.

In the spring of 2018, the legislature approved a series of tax raises (with the needed three-quarters majority in both houses) to increase funding in public education, including a teacher pay raise of close to 15 percent, across the board. Key was a hike in the energy production tax from 2 percent to 5 percent. And then, miracle of miracles, the doomsday Oklahoma’s big horizontal drillers warned of did not come to pass. The minimal tax increase did not depress the economy. Drillers did not flee the state for more tax-friendly environs. The November 2018 revenue from gross production taxes, according to the Oklahoma state treasurer’s report, was 125 percent higher than in the previous November.

The nature of Big Oil and Gas hasn’t much changed since its inception at the end of the nineteenth century. The entire point, and therefore the controlling instinct and the base ethos, is to make money—as much money as possible. That’s true in theory for every industry, but the amount of money potentially at hand for producers of oil and gas sets these particular products apart from every other low-tech filthy widget in the world. Combine that with the inherently destructive and polluting nature of production, and you end up in a relentlessly, recklessly driven cost-cutting environment in which it’s probably mathematically worth it to try to get away with almost anything. In the most profit-making industry on earth, there is still no meaningful R&D investment in cleanup technology, nor has there ever been any measurable slowdown in the pace or number of disasters that need cleaning up.

Take, for instance, the first fruits of the most unlikely electoral victory in modern U.S. history, harvested just a few weeks into the presidential administration of Donald J. Trump and tucked into a gift basket presented to the American oil and gas industry: “Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That Congress disapproves the rule submitted by the Securities and Exchange Commission relating to ‘Disclosure of Payments by Resource Extraction Issuers’ and such rule shall have no force or effect.”

United States announced its full withdrawal from the agreement. Forget transparent financial reporting in developing countries. Oil and gas companies wouldn’t even need to report their tax expenditures here, inside the United States of America. “The argument for withdrawal, according to the formal letter from the Department of the Interior to the chair of the E.I.T.I. board, is that U.S. law simply doesn’t allow for the kind of transparency that E.I.T.I. requires,”

As a start, they should be making full public disclosures of all their payments to governments and government actors. Even the half-on-the-take U.S. Congress believed that as recently as 2016. When U.S. oil and gas companies undermine U.S. foreign policy objectives abroad—by drilling Russia’s Arctic for it after the seizure of Crimea, or single-handedly funding rapacious dictators-for-life in central Africa, or negotiating independent deals with Iraqi Kurdistan to break up the unified national Iraqi government that U.S. soldiers were (at that moment!) dying to hold together—they should face severe punitive consequences at home. If it were a rival, rogue country tear-assing across the globe screwing things up in these ways, a normal U.S. government would be at the least sanctioning it, if not leading global efforts to roll back those actions. When it’s not a country doing it but instead U.S.-based multinational oil corporations, the United States, at a minimum, should punish those companies, or even block them outright in a process tuned to ensure that U.S. oil doesn’t run a second U.S. foreign policy that our own military and intelligence agencies and foreign service have to pay for, potentially with their lives.

But the national treasure of a resource when it comes to understanding Tillerson, the ways he was shaped by Exxon, and the ways he helped shape ExxonMobil is Steve Coll’s Private Empire: ExxonMobil and American Power. Coll’s book is also the best resource for understanding the standard operating procedures and the central mission of ExxonMobil. Anybody who has written about the company and its leaders in the years since the publication of Private Empire owes a big debt to Coll. And that now includes me.