U.S. Thirst for Oil Could Send Africa on Mideast's Path
G. Pascal Zachary
Sunday, January 29, 2006
Kribi, Cameroon -- Standing on a rocky African beach, at the base of a gorgeous waterfall, I am peppered with requests from African men. One is peddling a canoe ride. Another wants to sell me some polished shells. A third asks if he can be my guide. A fourth wants me to visit his art shop. A larger group of men play a game of cards, passing the time.
These men are poor, a condition not unusual in these parts but made more painful by their awareness that a short distance across the water sits a mammoth offshore oil terminal run by ExxonMobil,
The men crowd around me and ask me why does the pipeline, which carries oil underneath their coastal village and out to sea, employ so few people -- and none of them. They suspect, they say, that they are members of the wrong tribe, that the government cares nothing about them, and that ExxonMobil prefers foreign workers. I know the truth. These men are not needed. They lack the right skills and, anyway, very few people are needed to keep the oil flowing.
I cannot share my rude truth with these men for I fear their anger. When I tell them I am not an employee of ExxonMobil but a journalist, they are unsatisfied. They crowd around me, agitated. To them, I am simply an American, a representative from the country consuming African oil.
I plot my escape, and, when safe in my four-wheel drive, I have time to ponder how high a moral price are we gas-guzzling Americans willing to pay for an uninterrupted flow of crude oil?
The question keeps popping up around the world as the United States, which relies on foreign oil for nearly 60 percent of its needs, scrambles to secure sources. The Faustian bargains made by the U.S. government with repressive oil-producing Muslim states of the Persian Gulf are well known. We now face an endless war in Iraq; an Iran striving for nuclear technology; a Saudi Arabia incubating anti-American terrorists and perhaps teetering on the verge of collapse.
Can the United States avoid repeating in Africa this dangerous pattern of first cosseting oil dictators and then suffering a painful blowback?
That's the big question that looms over America's growing oil dependence on tropical Africa. Depicted by rock stars and philanthropists as mired in disease, disorder and malnutrition, Africa is nevertheless America's fastest-rising source of imported oil. Already, three of the top 15 foreign oil suppliers to the United States are African, and the region could provide as much as 25 percent of U.S. imports by 2025.
It is imperative that the United States forge a new bargain with Africa's oil-producing countries. Africa is the poorest part of the planet and it would be disgraceful for Americans to support an oil system that reinforces poverty, fuels corruption and promotes social unrest. Oil could be a boon for Africa, but if mismanaged this precious resource will ultimately be a source of shame.
The results of America's oil dealings with Africa are troubling so far. African governments routinely loot oil revenue. People living closest to the oil wells, meanwhile, are often the poorest of the poor. This is the story in Angola and Nigeria, two of America's top seven sources of imported oil.
Trying to write a new script for African oil, international do-gooders such as the World Bank and Oxfam concocted an innovative plan: Help those African countries to develop an oil sector only if they pledge to spend oil revenue wisely.
The impoverished landlocked country of Chad is the first test of this new way of dealing with African oil. The opening went well. Chad needed loans to build an oil infrastructure, in particular a pipeline that would carry its oil hundreds of miles to an Atlantic port in Kribi, Cameroon, where the oil could be exported. In exchange for loans from the World Bank and international support for billions of dollars of needed private investment, Chad passed a law that bound the government to spend its oil money wisely -- on education and health, not its military.
Oil started pumping in 2003, under the management of U.S. oil giant ExxonMobil. Chad's share of the revenue so far is about $300 million, two-thirds of which the government says it has spent on social programs.
But last month, Chad's government suspended its oil law, breaking its promise with the international do-gooders by declaring it will spend more of its oil money on security and abolish a "future generations fund," a savings account that was to kick in when the country's estimated 1 billion barrels of oil are gone. Observers expect the worst because Chad has a long history of instability and violence. Critics are upset because there is already evidence that the Chad government wasn't living up to the deal anyway.
The World Bank has retaliated by banning any future loans to Chad. More needs to be done. The U.S. government should urge ExxonMobil, which has been silent on the Chad issue, to halt oil payments to the Chad government.
ExxonMobil also needs to pay more attention to the resentment building along its pipeline. The company may ultimately face the exhausting problem afflicting Chevron, another big U.S. oil company that has important operations in Nigeria's Delta region. Kidnappings of Chevron's workers are routine, the company's oil platforms and pipelines face regular assault and Chevron's community relations are strained.
As a result, the trend in Nigeria and neighboring Cameroon is to shift oil operations offshore as much as possible. But the relative safety of the sea reinforces the sense that oil companies want to reduce to a minimum their contact with ordinary Africans.
Oil companies are understandably reluctant to try to reform wayward governments. But they can do better in Africa by adopting a common standard in doing business, including a requirement that payments to governments be made transparent. The trouble is that oil companies are looking for a competitive advantage, making cooperation difficult. Indeed, some oil companies are actually government agencies. China's state-owned oil company, for instance, recently agreed to pay $2.3 billion for a stake in a Nigerian oil and gas field.
Because oil companies can't be expected to monitor international morals, the U.S. government must intervene. The Bush administration should begin by asking Chad President Idriss Deby to reverse his government's decision to break its oil promises. The United States might even threaten to cut off all military aid to Chad, which is part of a five-year $500 million Pentagon program to assist nine African governments in expanding their military capacity, purportedly to help in the war on terrorism.
Nigeria and Angola can also benefit from U.S. pressure. These superstars of African oil should be asked to account completely for their oil revenues -- and allow international inspectors to see where these governments claim to be spending their money.
Nigeria recently released an audit of payments made to the government from large oil companies for 2003 and 2004. The audit, while incomplete, suggests that some Nigerians see the need for greater accountability. The Bush administration should support a wider audit, covering all Nigeria's revenues, which exceeded $30 billion last year.
For the foreseeable future, America can't get along without African oil, and revenue from oil sales can help Africa in its long and difficult climb from poverty and disorder. But America must avoid replaying the same pattern in Africa as it has created in the Persian Gulf. America can be a smart consumer, prodding its suppliers to improve their behavior. That will mean tough decisions for Americans who too often seem willing to purchase oil at any moral price.
G. Pascal Zachary is a fellow of the German Marshall Fund, researching African affairs. He teaches journalism at Stanford University. Contact us at insight@sfchronicle.com.