How stoner sloths may help legalise marijuana

stoner slothThe Australian state of New South Wales may have done the drug debate an unlikely favour through its hilariously bad new ads warning of the dangers of marijuana. NSW Health Department’s updated version of Reefer Madness is a campaign called Stoner Sloth designed to warn teenagers about the de-energising effect of the drug. But the anthropomorphic sloths used in the ads have attracted ridicule and concerns the cuddly looking mammal will actually have the opposite effect, attracting more people to use the drug.

NSW Health’s campaign was launched with the support of St Vincent de Paul’s Alcohol Drug Information Service. The premise is that “you are worse on weed”, based on research done by the National Cannabis Prevention and Information Centre. The idea has some intrinsic merit. Cannabis is a depressant drug, which means it slows down messages travelling between brain and body. However the health aspect of the ads are drowned by embarrassingly bad delivery.

Complete with its own hashtag, #stonersloth sets out to talk to the young about the effects of marijuana in language (and gifs) the department hoped the young would understand. Hit the books not the bong at exams, the campaign lectures (sound advice before exam time, though unlikely to be listened to AFTER the exam). It also warns about marijuana turning you into “that guy” at a party who is moody, listless and uninvolved (presumably unlike all the drunks who are the life of the party).

While slow reactions and a tendency to disengage can be symptoms of marijuana usage, the ads run into trouble transforming the stoner into an actual sloth, surrounded by human friends and family. Sloths are South American tree-dwelling mammals related to anteaters. Because they mostly eat nutrient-poor leaves, three-quarters of their body weight is devoted to their stomachs, so there is little energy to do much else. Their resulting lack of speed makes them ideal hosts for moths, beetles, cockroaches, fungi and other microbiotic creatures. Their low metabolic rates has made them extraordinary successful lifeforms in tropical rainforests. In short they are very little like the three young people named Deliha, Jason and Dave, the stoner sloths of the ads who can’t communicate with family and friends or concentrate on exams.

The campaign was designed to be shareable, especially among teenagers and it certainly made waves if not for the reasons the makers hoped. The hashtag #stonersloth became a hotbed of ridicule with people complaining about the stupidity of the ads, the cuddliness of sloths, and the apparent lack of consultation with young people.

Even NSW Premier Mike Baird appeared to distance himself from the campaign.He used his mastery of Twitter to riff about “Chewbacca siblings” and “no sloths being harmed in the making of the video”. Baird’s offhand humour is engaging but his comment that the video was “Quite something” is less than ringing endorsement of the message of his own health department and showed he didn’t see it before it was released.

The NCPIC whose message NSW Health relied on had not seen it either and are furious their message is attached to it. “NCPIC was not consulted on any of the creative elements of this campaign,” NCPIC director Professor Jan Copeland said. While some were worried about the silliness of the campaign Professor Copeland was more worried about the impression of the character of the sloth. “Associating a sloth with people being intoxicated may convey a positive appeal to people being intoxicated rather than the intended negative message,” she said.

The debate so far makes no mention of the elephant in the room: Cannabis remains an illegal drug to use, possess, grow or sell in Australia (despite moves towards legalising medical marijuana). The Northern Territory, the ACT and South Australia have “decriminalised” some marijuana offences, which means possession of small amounts becomes a revenue raiser for the state with minor fines applicable (arguably a tax on use, though unfairly distributed). In the other states, cannabis possession can lead to a criminal record (depending on the good will of prosecuting police) as well as larger fines, with repeat offenders still sentenced to jail.

In NSW, the home of #stonersloth, police can issue a “caution” to offenders caught with up to 15 grams of cannabis. There is a maximum of two cautions for each individual and police give out information about the harms associated with cannabis use and a number to call for drug-related information or referral.

These laws reflect a growing community belief marijuana usage is at worst a “victimless crime” and its widespread usage is causing unnecessary criminality. Studies show 34.8% of Australians 14 years and over have used cannabis at least once and 10.2% have used it in the last 12 months. Longer term effects of excessive use of cannabis can include memory loss, learning difficulties, mood swings and reduced sex drive. These are genuine health issues (the jury is still out on whether it causes schizophrenia) but hardly enough evidence to keep it illegal, especially when the damage done by legal drugs alcohol and tobacco is so well documented.

Stoner Sloth is a ill-designed schemozzle but its makers should be congratulated for at least putting marijuana back in the centre of public debate, however unwittingly. The road to legalisation is neither straight nor simple and requires new safeguards, taxing powers and managing community expectations. It is a complex debate our politicians don’t want to have, for fear of offending conservative media always keen to whip up outrage based on simplistic binaries of good and evil. No politician wants to be seen as soft in the “war on drugs” and the easy option is to support prohibition.

Yet support for legalisation in the wider community is growing. In Australia it rose from 26.8% in 2004 to 31.8% in 2014. The medical marijuana debate – legislation supported by Mike Baird among others – is casting a whole new light on the drug. As well as Stoner Sloth, NSW Health is also investing $9 million in clinical trials of marijuana use in pain relief. In the end it will Be Australia’s rapidly aging population and sufferers of cancer, Alzheimers, Parkinson’s Disease and more that will convince lawmakers to act. Stoner sloths are a stereotype, and just one tiny piece of a complex puzzle. It is up to the community to insist our leaders understand and solve that puzzle. Marijuana needs to come out of the shadows and be part of a wider health debate.

History of oil – The rise of Saudi Arabia

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Dammam No. 7, the first commercial well in Saudi Arabia, struck oil in 1938. (Photo: Wikipedia)

John D. Rockefeller profited vastly from the age of oil based on the illuminant powers of kerosene. But Thomas Edison found an even better way to provide lighting, needing oil’s backers to find a new use for the fuel. It was ideal timing for the newly perfected motor car, though no one person can claim credit for the invention. Across late 19th century Europe, several manufacturers and scientists were experimenting with internal combustion engines, notably Karl Benz, Gottlieb Daimler and Rudolf Diesel. The first true car was a 1901 Mercedes designed by Daimler’s assistant Wilhelm Maybach but early vehicles were a rare extravagance.

Henry Ford’s Model T (1908) was the game-changer, the epitome of Ford’s standardised production line. Customers could have them in what colour they liked, as long as it was black and by 1914 Ford had sold one million vehicles. Despite the war in Europe, that figure doubled by 1916 and ballooned to 10 million by 1924. As Ford evolved his production processes, he passed on the cost reductions to his customers, while continuing to pay his staff well, ensuring a quality product always left the factory gates.

Ford’s enlightened generosity was unique but his business genius was matched by Alfred Sloan, head of rival General Motors. Sloan saw that 1920s customers weren’t happy with the same black car year after year. Optimistic times called for more diversified products. Sloan brought in a new model each year and he insisted his brands – Pontiac, Buick, Oldsmobile and Cadillac – were responsible for their own profit and loss. By 1927 Sloan and Ford were producing four out of every five cars in the world transforming oil from a source of illumination into a source of power.

Winston Churchill was among the first to realise the profound implications of oil-based transport. Britain had a natural advantage with coal, but in 1913 Churchill as First Lord of the Admiralty, successfully convinced his navy to switch from coal to oil. Though it meant Britain was going to have to import more oil, it was necessary to keep ahead of German naval developments. To ensure continued British energy self-sufficiency, Churchill insisted on government takeover of the bankrupt Anglo-Persian Oil Company (now BP) to manage the oil concession in Persia. The ensuing First World War merely cemented the notion that ample access to oil was crucial in mass mobilisation of military forces.

But there was already alarm about peak oil. By 1919, demand outstripped supply of American oil while supplies from Russia were almost wiped out by the Bolshevik Revolution. A sick president Wilson gave his reluctant blessing to the Sykes-Picot agreement which divvied up the Middle East between Britain and France. Britain carved out its Mesopotamian oil concessions at the 1920 San Remo conference, though Iraqi revolts in Nasiriya and Fallujah would damage western interests (not for the last time).

A puppet regime in Iraq was sworn to London under an alliance treaty. The US objected to British control over Iraqi oil and finally extracted an agreement in 1927 that involved BP, Shell, Total and Exxon-Mobil to jointly manage the concession. Similar situations emerged in the growing oil industries of Mexico and Venezuela leaving most of the world’s oil controlled by the emerging seven sisters. That only left the initially unpromisingly Arabian Peninsula in play.

London was the semi-colonial power of this forbidding desert of shifting sheikdoms. It wasn’t until New Zealand mining engineer Frank Holmes arrived in the mid-1920s that its oil potential began to be explored. Holmes was constrained by financial problems and eventually sold his concessions to Gulf and Chevron. Another key early player was John Philby (father of Soviet spy Kim) who formed an alliance with the House of Saud, who in 1925 had finally defeated the British-supported emir Hussein for control of the peninsula. King Abdul Aziz ibn-Saud’s success was based on a power-sharing pact with a 18th century puritanical doctrine of Islam called Wahhabism, but his need for money saw him eventually take the advice of Philby. He signed an oil contract with Chevron in 1933 for the whole of the eastern al-Hasa province.

Drilling in the peninsula was a dangerous undertaking and Chevron brought Texaco in as half partners to spread the risk. Together they formed a new company called Caltex. By the 1930s there was a new oil glut thanks to advances in geophysics, seismic subsurface analysis and secondary recovery methods using injected natural gas. Soviet production had recovered from the revolution and Middle Eastern oil was coming on-stream. Gasoline stations emerged to fill an exploding American domestic market for oil, along with motels and drive-ins.

With the threat of another price war, the global companies got together at Achnacarry Castle, Scotland in 1928 to form the first ever global oil cartel. The deal committed each company to freeze the status quo by fixing sales and tying pro-quota increases to consumption growth. The Gulf-Plus system fixed the cheaper world oil price to the more expensive American price with phantom freight charges. But the Wall St crash submerged the market with a huge oil glut; a situation finally rescued by the Roosevelt administration’s federal quotas. Thanks to Texas’s leadership in oil production, the Texas Railroad Commission became the de facto setter of world prices by deciding when to switch on and off its taps, a situation that lasted until 1971 (The group that eventually took over the Railroad’s role, OPEC, learned well from the Texan model).

Despite oil’s growing importance as a global fuel, it still lagged well behind coal at the outbreak of the Second World War by a production factor of four to one. America produced 60% of the world’s oil and the search for new oil was a critical factor in the strategy of that war. The Baku oilfields were more important to Hitler than taking freezing Moscow. Japan was less interested in Australia than in the oil in Borneo and Sumatra, and Allies planes spent far more time destroying the Ploiesti refineries in Romania than it did bombing Nazi death camps. By the end of the war it was clear to all strategists no war could be won without clear and ample supply of crude oil.

In America, Secretary of the Interior Harold Ickes warned President Roosevelt of the steady decline in the ratio between US oil reserves and production. The government kept the price of oil low to aid the war effort but this had the side impact of discouraging exploration. Ickes convinced the president to initiate an oil alliance with Saudi Arabia, which was now known to have huge deposits. Caltex were already there and looking for military protection in case of a German attack. In 1941, the US charged their Egyptian embassy to look after Arabian affairs and by 1943 the peninsula was recognised as vital to American “defence”, receiving Lend Lease support.

In 1945 the new relationship was cemented when Roosevelt met ibn-Saud on the USS Quincy in the Suez Canal. With the start of the Cold War, America became a net importer of oil for the first time and oil policy was at the heart of the Marshall Plan, which set a doubling of European consumption by 1951. Exxon and Mobil joined Chevron and Texaco’s Arabian venture to form the Arabian American Oil Company, Aramco. Mobil took 10% while the three other partners took 30% and Mobil’s lack of boldness cost it dear when it became apparent Arabia’s Ghawar was the largest oilfield on the planet. The companies settled in with a “fifty fifty profit sharing” partnership with ibn-Saud and by 1949, there was a pipeline in place from Arabia to the Lebanese port of Sidon. Arabian oil was about to power the world, and the American oil companies and the Saudi royal family were the biggest winners.

John D Rockefeller and the birth of the modern oil industry

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John D. Rockefeller may have been unfairly maligned as a “robber baron”.

In his book The Age of Oil, oilman and historian Leonardo Maugeri said oil slipped abruptly into modern life via the back door. Prior to the industrial age, Mesopotamians used seeping surface oil for asphalt in roadbuilding and waterproofing and as a component in medicine. But it wasn’t until the 1850s that chemists conducted experiments to use oil as a cheap and flexible source of light. In 1854 Canadian Abraham Gesner patented Kerosene for “illumination or other purposes” and its use quickly spread around New York as a cheaper and safer alternative than existing illuminants.

Oil remained hard to get out of the ground until 1859 when Edwin Drake first used a drilling machine in Pennsylvania, adapted from earlier oil experiments at Baku, Azerbaijan. Drake built a wooden tower with a large steam-driven wheel around which he coiled a cable with an iron bit at the end. The rotation of the wheel raised the cable and when it fell back it excavated a hole. Drake drove a pipe down the hole which his men drilled inside so water and loose particles did not impede the iron bit from going deep into the ground.

Drake’s other innovation was to use the Pennsylvania 42-gallon (159 litres) whiskey barrel which would become the fundamental oil production measure still in use today. His early success attracted others to Western Pennsylvania, men (and they were mostly men) who were called wildcatters because they could hear the cries of wildcats in the isolated areas where they drilled for oil. Within two years the first oil refinery was in operation with exports shipped to London and after another four the first successful pipeline. The Black Gold Rush was on.

In the early days recurring gluts flooded the market pushing prices down and bankrupting many investors. Drake was not immune and ended his life in poverty. The dramatic roller-coaster rise of early oil prices was a source of annoyance to many and one man in particular was determined to fix the problem.

John D Rockefeller was a trained bookkeeper and trader who landed in the refinery business in Ohio in 1863. Rockefeller saw the “invisible hand” of the economy as the problem and was determined to put his own architecture on the industry by suppressing competition entirely. While he saw the wildcatting exploration business as too erratic to control, Rockefeller began to tackle the downstream processes of refining, transportation, pipelines and ships. In 1870 he founded Standard Oil in Cleveland where he decided to consolidate the entire refining business.

In February 1872 he launched the Cleveland Massacre, taking over 22 of 26 refining companies bringing almost the entire American refinery and oil service industries under his control. Those that came into Rockefeller’s tent were well rewarded for putting ceilings on their production whereas those who resisted were ruthlessly squeezed out. With the help of his partner Henry Flagler (who later developed Florida real estate in Miami and Palm Beach), Rockefeller negotiated secret deals with the railroad companies to obtain heavily discounted oil transport fees for guaranteed petroleum transport. Rockefeller even won a 25 percent fee for every non-Standard Oil barrel of oil the railroad carried.

The only hope for his rivals was to build up pipeline capacity, a technology that had to be developed from scratch. But even here, Standard Oil quickly leveraged off their industry strength to dominate by the 1880s. By then Rockefeller controlled 90 percent of US refineries and pipelines, owned most of the transport rolling stock and shipping tankers and the entire production of high-grade railway lubricant, all at a time when the US had 85 percent of the world crude production and refining.

His agents monitored the price of oil and new discoveries across America. If a competitor lowered the price of kerosene, Standard Oil would go even lower, while increasing the price elsewhere to compensate. Rockefeller’s empire was almost complete, held back only by the lack of US law for federal incorporation, making his operation fragmented. His response was the Standard Oil Trust established in 1882. Rockefeller established companies in each state Standard Oil operated. These companies transferred their shares to a Board of Trustees in New York which would allocate a proportional quantity of trustee certificates to each shareholder.

The Standard Oil Trust was kept hidden until 1889 and by then many other large companies had also established trusts. By then kerosene was the US’s largest manufactured export to the world and Rockefeller was the richest person on the planet. Yet competition was slowly emerging. The brothers of dynamite-inventor Alfred Nobel, Ludvig and Robert, were busy developing the Russian oil industry at Baku. With investment from the French Rothschilds, the Russians built a railroad to transfer kerosene from Baku to Batum (now Batumi) on the Black Sea, opening up a route to world markets.

Standard Oil tried the same tactics in Europe that were successful in America but Rothschilds launched a counter-offensive into Asia. They were helped by an English businessman Marcus Samuel who designed a new class of oil tanker capable of passing through the Suez Canal. This slashed costs compared to Standard’s Cape of Good Hope route and Samuel began building onshore terminals and storage tanks in key Asian ports.

Samuel’s emergence as a key player was cemented in 1897 as he reorganised his business into a new joint stock company which he named after his father’s shell box company, Shell Transport and Trading Company, simplified as Shell. Russian oil production surged above America’s by 1900 and the picture was complicated further by the discovery of oil in East Sumatra by the Royal Dutch Company. Marcus tried to organise a merger with the Dutch led by Henri Deterding. But Deterding out-manouevred Marcus insisting on a 60-40 split in his favour. Royal Dutch Shell came into being in 1907 but the two companies maintained separate status in The Hague and London, kept together only by Deterding’s force of will. They didn’t evolve into a single company until 2005.

A century earlier, the fulcrum of the oil world moved to Texas with enormous finds bringing the word “gusher” into the English language. New American companies rose to challenge Rockefeller’s dominance: the Texas Oil Company, Gulf Oil and Union Oil.  There was another threat in the political sphere. New president Theodore Roosevelt campaigned on an anti-trust platform. Though Rockefeller had retired in 1895 it was kept a secret and he was the most visible target of the “trustbusters”.  Rockefeller became the archetypal “robber baron” which was unfair as he kept the kerosene price low for the general public and had never turned swindling into a business practice.

But the pressure mounted on the railroads as “common carriers” to stop fee discrimination while the media used its growing power to shine a light into Rockefeller’s secretive life. The pressure finally told in 1911 when the US Supreme Court ordered the dismantling of Standard Oil into 30 independent companies. Several of what would later be called the “seven sisters” of world majors (along with Shell) emerged from the Ashes: Exxon (Standard Oil of New Jersey). Mobil (Standard Oil of New York), Chevron (Standard Oil of California) and Amoco (Standard Oil of Indiana).  The ruling ended Rockefeller’s reign of setting oil prices though did little to stop anti-competitive practices. While Rockefeller lived another four decades in quiet retirement as the symbol of 19th century capitalism, a new use beyond illumination would put oil at the heart of 20th century capitalism. The age of the internal combustion engine would change everything.

APT8 at Brisbane’s GOMA

apt8-1One of the world’s great long running art exhibitions has opened again in Brisbane. The eighth Asia Pacific Triennial is a once every three years showcase of the best and most vibrant art from the Asia and Pacific regions in one of the best art galletries in the world: Brisbane’s Gallary of Modern Art or QAGOMA as it has renamed itself (Qld Art Gallery/Gallery of Modern Art). The name may be awkward but there is nothing awkward or forced about the art, which is true reflection of the most vibrant part of the world.apt8-2

Whether the exhibition is dealing with post Soviet trauma in Central Asia, life in the Bangkok banlieus or Aboriginal nationhood, APT8 brings a refreshingly deep perspective that is an antidote to the bland isolationism of modern Australian life. APT is the flagship exhibit of QAGOMA and its eighth incarnation emphasises the role of performance in recent art, with live actions, video, kinetic art, figurative painting and sculpture “exploring the use of the human form to express cultural, social and political ideas, and the central role of artists in articulating experiences specific to their localities.” There are works from over 80 artists and groups, with ongoing performances and projects, a conference and cinema programs, publications and as always, plenty of activities for children.apt8-3

Asim Waqif creates large scale installations from leftover and found objects. Waqif was born in Hyderabad, India in 1978 and now lives and works in Delhi. His work All We Leave Behind dominates the entry space to APT8. Prior to the exhibition Waqif visited Brisbane to learn about the history of building and demolition in the city. He collected worn timbers typical of south-east Queensland construction and used nooks and crannies of art gallery space to construct an edifice that is labour intensive and unplanned but also inviting. Waqif is fascinated by the concept of waste. In a 2013 interview he compares waste to archaeology. “One can speculate about the habits of a person by looking at the waste he/she generates,” he said.apt8-4

Eddie Mabo was probably the most famous person to come from the Torres Strait island of Mer (formerly known as Murray Island) but an important elder on the island today is Segar Passi. Passi began painting in the 1960s, observing sealife, birds and weather, and painting portraits, daily life, and Creation narratives. Passi encourages people to be mindful and respectful of their environment,  important social and cultural practices and knowledge. His works study the volcanic islands off Mer and Passi references the physical features of the islands and their geological evolution. His paintings speak of a profound and culturally embedded knowledge of place, with geological links to the ancient volcanic landscapes of Papua New Guinea.apt8-5

Burmese artist Nge Lay‘s large-scale installation The sick classroom (2013) came out of years of research and regular visits to Thuye’dan, a village ten hours north of Yangon (Rangoon). With her husband and fellow artist Aung Ko, Nge Lay established the Thuye’dan Village Art Project in 2007 which shared art with the villagers working with some of the most successful artists in Myanmar. Nge Lay also worked closely with local craftspeople to create sculptures that have become the basis for her recent sculptural works. The sick classroom features life-size carved wooden sculptures of the classroom, the teacher and 26 first-year students. The installation is a call for better rural education in Myanmar.apt8-7

Paphonsak La-or’s realistic drawings and paintings are critiques of the politics and history of his native Thailand. ‘Silent no more’ 2014-15 features empty landscapes around Fukushima and Futaba abandoned after the 2011 tsunami and 2011 nuclear disaster. Through Google Maps, La-or discovered a connection between these uninhabitable but lush landscapes and his frustration with the political situation in Thailand around the time of the 2014 military coup. La-or emphasises the contradictions between the peaceful Japanese scenes and the Thai turbulence using jarring text rendered in dust. apt8-8

STAB is the School of Theory and Activism, Bishkek in the capital of Kyrgyzstan. STAB is an artistic, research and activist platform informed by Soviet avant-garde art and activism, STAB runs animation workshops on dominance of the Russian language in Central Asia, urban development, and post Soviet homophobia. STAB also examines the Kollontai commune, a Soviet era queer communist and feminist collective associated with the architecture school in Frunze (now Bishkek) in the 1970s.apt8-10

Rosanna Raymond draws on her New Zealand, European and Samoan heritage in her multi-art installation and performance event SaVAge K’lub. Savage Club was a British 19th century gentlemen’s club but Raymond’s K’lub places more emphasis on the VA’ within SaVAge, a term invoking Samoan philosophical understandings of space. This, says Raymond, “is an active space. It is activated by people. It binds people and things together. It forms relationships, and reciprocal obligations.”apt8-11

Leang Seckon lived through Year Zero and the Khmer regime in Cambodia. A generation of artists was wiped out leaving a visible gap in the country’s contemporary art. Leang’s dense paintings have lush tapestry-like surfaces, that combine myth, popular culture and history. Hell of Tuol Sleng 2014 depicts a high school that became a notorious prison and death camp. “In 1977, when I was about seven years old, I had a serious fever and I fainted and was taken to a hospital near Tuol Sleng,” Leang said. “When I went to shit behind the building, I saw troops wearing black uniforms taking a very skinny person, almost like a ghost, to plough the fields. The person couldn’t even walk, but the soldier hit him and brought ants to bite him. The person fell onto the rice field. I hid beside a small group of trees and felt horrified.”apt8-13

Like Paphonsak La-or, Navin Rawanchaikul is a Chiang Mai Thai artist who draws inspiration from Japan. Navin exhibited in APT2 (1996) and his panoramic figurative paintings draw on film posters and murals. APT8 features ‘Tales of Navin 1–4’ 2013-15 capturing the many stages of his career and accompanied by a letter From Navin to Navin (January 2, 2015) that reflects on his relationships, love and death. These include the death of his mentor Thai artist Montien Boonma and Rawanchaikul’s trips to Australia to assist Boonma in the 1990s.apt8-14

Guangzhou artist Duan Jianyu’s playful work uses erotically charged imagery and humour as parody of Chinese and colonial life. Her faux-naïve style owes to Revolutionary Realism and the French Barbizon school portraying rural peasant women carrying giant geese with snaking, phallic necks echoing European modernist ideas into China post-Cultural Revolution. She also draws attention to tensions between urban and rural, and tradition and modernity in a society undergoing enormous change.apt8-15

Chilean-born Australian painter Juan Davila has six works in APT8. They draw on many references, including 19th century Parisian advertisement posters in Paris, with Davila devising his own typefaces and fonts. Hung as a group they address the treatment of refugees and asylum seekers in Australia using barbed wire and people of mixed gender and races. apt8-16

Mongolian artist Gerelkhuu Ganbold’s painting Soldiers Who Don’t Know Themselves (2013) is a vertical triptych, depicting mounted horsemen in armour riding through a vast desert space. On close inspectionthe armoured suits are either empty or inhabited by skeleton figures, sitting up on their horses in a ghostly way. Gerelkhuu’s draws from Mongol zurag painting and equestrian art, and contemporary comics and science-fiction cinema. His horde recalls Genghis Khan while also commenting on modern Mongolia which is rapidly urbanising and undergoing economic overhaul.

APT8 is on free at QAGOMA, Southbank, Brisbane until April 10, 2016.

Islamism and the West: A new reign of terror

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A ripped picture of Syrian President Bashar al-Assad hangs in the northern Syrian city of Raqqa following the fall of the city to the Islamic State on March 5, 2013. Raqqa is now the capital city of IS. (Photo credit MOHAMMAD AL-HUSSEIN/AFP/Getty Images)

The sight of Brussels in continual “lockdown” is a sobering glimpse of the future. The tenuous contract between freedom and equality is on a slippery slope equality’s way and we are all becoming equally enslaved. The cause of the imbalance is Islamism, the largest threat to “western” (a word that has no geographical meaning as modern Chinese and Indian people aspire to be the “West” as much as Americans and Europeans) civilisation and dealing with it will become the thorniest global issue over the coming decades if not centuries. I don’t know why we are so surprised at this as 9/11 showed in horrific live global pictures the extent Islamists are prepared to go. It is war, where we like it or not, and whether we recognise or not who the “enemy” is.

It is also a problem that is not going away anytime soon, regardless of how well the West “copes” . While random easy target attacks with guns and bombs are not as as wicked an economic problem as the effects of climate change with its catastrophic results to the planet, the outcomes posited by Islamism are a more potent and direct threat to centuries of science and innovation. The notion that climate change is a fraud is easier to defeat as the weight of scientific evidence becomes insurmountable in the 21st century. But even supporting science or calling our times the heuristic “21st century” is inimical to Islamic terrorists.

Terror is an overworked word but is accurate to describe the sense of fear crucial to the work of terrorists. The notion is not exclusive to Islamists and is as old as human society. The power of ancient Rome was enforced by terrorism of its own people while the French Revolutionary Reign of Terror enshrined violence as a political right. State terrorism was a core tactic in both world wars, especially the second as en essential element of the Total War mentality leaders saw as necessary for victory.

In the late 20th century, terrorism became associated with non-state actors in asymmetric battles against the power of the state. Growing up in the political complexities of Ireland it was easy to see how one person’s freedom fighter was another person’s terrorist. But central to the strategy of all of these groups was that soft undefended targets were legitimate within the confines of their “wars”. In particular tourism and tourists became targets, both as a easy mark and also as symbols of the mass consumption that defined western society.

Islamists have taken this strategy to the next level in their battles against the West. The idea that tourism becomes unsafe and therefore untenable is a central concept in their war. You are a legitimate target whether you are in a hotel in Bamako, a beach in Tunisia, a rock concert in Paris, a pub in Bali or a plane over Sinai. The activities that mark out daily routines are slowly denormalised and with them, the assumptions that drive life in the West.

Terrorist actions are inescapably political, a fact the West prefers not to understand. Neither side in the traditional left-right divide of western politics understands how to deal with the problems posed by asymmetric warfare. The right is quicker to see Islamism’s threat but its simplistic solution of keeping Islam out and “closing the borders” belongs to less mobile times. The West is post-Christian and imposing a religious solution on secular societies has no chance of success. The borders are a hangover from the 19th project of nationalism and nationalism has few answers to global jihad.

The  other side practices its own stupidities. So determined is the liberal-left to prevent the effects of divide and conquer promoted by the right, it is blind to the causes of Islamism preferring not even to speak of the religious dimension that drives its actions. Their reluctance is understandable, not wanting to drive an artificial wedge between Muslims and non-Muslims. But ignoring causation will never address the problem. The fact IS supporters practise their religion in a way that horrifies most liberals does not make it any less Islamic. When a British Muslim intellectual states it is lazy and wrong to say Islamism has nothing to do with Islam, she is castigated by non-Muslims as a Zionist in disguise. But as she argues, “the repugnant creed of the Islamic State is certainly related to Islam – but it is also inimical to Islam”.

It is not just Islamic State that is the problem, though they have succeeded in their avowed long-term media strategy. Jihadis view themselves as warriors against western imperialism and across the world Islamist groups invoke Allah to drive murderous projects. Boko Haram in Nigeria is even more bloodthirsty than IS, and the aim of their project is reflected in their name which means “western education is forbidden”.  It mounted 453 attacks in 2014, killing 6644 people – “the most deadly terrorist group in the world”.

There are others in similar guise across the Muslim world: Al Qaeda in the Islamic Maghreb  (ALIQ) in northern Africa, Al Qaeda in the Arab Peninsula (AQIP) in Yemen, Al Shabaab in Somalia , Islamic State, Al Qaeda and their proxies in the Middle East, Taliban armies in Afghanistan and Pakistan, Lashkar e Toiba in Pakistan and India, Jemaah Islamiya in Indonesia and Abu Sayyef in Philippines. They have a ready stream of adherents and are well-funded and well organised often by supposed “allies” of Western nations. The Salafist and Wahhabist strains of Islam, as practiced by some Gulf nations, Saudi Arabia in particular, are utterly intolerant and want only a world in their image. They can only be defeated by the populations in which they live.

There are no easy answers for the West. Media castigation of Muslims in their midst sells papers but is counter-productive. Military intervention is catastrophic and must be avoided. Even a peacekeeping mission has the potential to be badly misunderstood. Democracy has not taken root in Muslim countries and authoritarian regimes – backed by western nations for their own cynical purposes – have hollowed out civil societies. Jihadism with its easy illusion of divine sanction has filled the void, with a simplistic message often compelling to those disenfranchised in the west as it is to Muslims.

Islamic State must be allowed to be seen for what is it: A cruel, despotic and capricious regime that gives its elite a lucrative regime from smuggling oil, drugs and other contraband aroind their black economies. Those that live under IS and other intolerant Islamist regimes need time to find out the dictum that democracy is the worst possible way of organising the world – apart from all the others. Whether the people under Islamist flags ever get to see that, depends on the politics of the West: the right avoiding weapons and bigotry and the left not avoiding reason and rationality. We are a long way from both and the war goes on. IS and their ilk have much room to grow before they being destroyed by their own absurdities.

Dark Paradise: A short history of Norfolk Island

norfolkAs Dark Paradise author Robert Macklin reminds us, all nations lie about their past. Whether it the Turks lying about a genocide of Armenians, Japanese ignoring war crimes, Americans glossing over their slave owning Founding Fathers, or the Israelis invoking ancient Hebrew lore to justify savage oppression of Palestinians, nations across the world have turned history to their agenda. The British, says Macklin, are past masters at whitewashing their past with a cheer squad of intellectuals heaping praise for the way they brought civilisation to the world, while ignoring the pillaging of Africa and the attempt to turn China into a nation of drug addicts.

The Australians have learned well from their British forebears and the predatory conquest of an entire continent has been hidden behind concepts of British law and order. Macklin’s tale is about the savagery that underpinned the Empire’s expansion into a small neglected corner of Australia: Norfolk Island. The Island was the first place that empire expanded after Sydney and its story incorporates three fascinating strands: the dark strain of convictism, the aftermath of the mutiny on the Bounty and the sexual predations of the High Anglican Melanesian Mission.

Captain James Cook discovered Norfolk, though not on the same voyage as his 1770 journey up the east coast of Australia. It was on his second voyage in 1774, a vain journey to find the fabled Terra Australis Incognita, when he arrived at the north-west tip of the island. It was short stay but its significance lay in the discovery of wild flax which Cook believed was a natural raw material for canvas sail. The great pine trees that dotted the island also looked perfect for masts and spars. Britain had neither commodity and was forced to import them from Russia. “The discovery may be both useful and valuable,” Cook wrote.

It took the upheaval of the American Revolution for Britain to turn its attentions to the south Pacific, and not for sails but for jails. Within 18 days of the First Fleet arriving in Sydney, Governor Arthur Phillip dispatched Lt Philip Gidley King to establish a settlement on Norfolk with a group of 15 convicts, five free men and two marines. They arrived on the island on Leap Year Day and took five days to negotiate the reefs to a safe landing.

King had his eyes on the flax and pines, and also on one of the six convict women in his new colony. He was unaware – and it would not be discovered until the late 20th century – the island was previously colonised by a small group of seafarers from north New Zealand or the Kermadec Islands using double-canoes. Between the 13th and 15th centuries they survived on fish and birds before mysterious disappearing either voluntarily or by violence induced by an imbalance of the sexes. They left behind the New Zealand flax and the Polynesian rat.

The latter were joined by European stowaways from King’s ship and together they ruled the ecosystem of the island. King’s plans had a more immediate enemy. The island’s pine trees were too brittle for masts and spars while King’s men did not have the technology to convert flax into canvas. Sexual tension replaced early enthusiasm, with men outnumbering women three to one. King codified 11 commandments into laws which included the need to “behave devoutly” and the more puzzling “no exchange of clothing”. The rats and hot winds played havoc with cultivation and the colony survived on fish. A planned convict rebellion was narrowly defeated by the actions of an informer.

Meanwhile, another British actor in the Norfolk story was plying the waters of the south Pacific. Lieutenant William Bligh, a protégé of Cook, was sailing to Tahiti in 1788 in command of HMS Bounty. Bligh’s orders were to turn the island into a slave state in the service of Empire. Aboard was Fletcher Christian, a midshipman Bligh promoted ahead of longer-serving hands. The pair were attracted to each other, though it is doubtful they consummated their relationship.

Despite this, Bligh found constant carping fault with Christian’s work. The easy Tahitian morals were a profound shock to the straight-laced British crew and Christian’s plotting against Bligh may have begun there. When they went to Tonga, a huge row erupted between them over missing coconuts and Bligh punished him before inviting him to dinner. In a state of confusion Christian plotted with others to desert, a plan which evolved into mutiny. He led a group of nine armed with muskets, bursting into Bligh’s cabin and putting a knife to his throat. The following morning, the Bligh loyalists were gathered together and put onto a cutter for an improbable 3600km journey to Timor, while Christian set sail for Tahiti. Facing a hostile reception and worried about British ships, they departed with 500 pigs and 25 Tahitians going first to Tonga and arriving at Pitcairn in 1790. The island had fertile soil, fresh water, tropical fruits and most importantly was utterly remote.

Bligh returned to Britain and was acquitted at a court-martial. King was also sent back to Britain while the martinet Major Robert Ross commanded Norfolk. The convicts seethed under tiny rations and draconian punishments for minor infringements. King returned as Lt-Governor to find 700 people on an island riven with violence and theft. Flax-dressers were brought from New Zealand to make canvas with no success. The Rum Corps philosophy spread to the island creating a caste system.

On Pitcairn life was no more idyllic. The colonisers divided into two murderous groups treating the Tahitians like slaves while Christian withdrew into a solitary life. Finally the Polynesians rebelled killing five of the nine mutineers before the tables turned and four of them were killed. The spree’s main effect was to rebalance the sexes and a relative peace broke out.

Peace was the last thing on the new Norfolk ruler’s mind when King was promoted to governor of NSW. His replacement, former Governor John Hunter’s nephew Captain William Kent was delayed at sea, so Major Joseph Foveaux came over from the Rum Corps. Foveaux got wealthy by pressing convicts into slave labour on his Sydney farm and he took sadistic ideas of discipline to Norfolk. Humiliation and agony were his tools of trade and he wasted no time establishing a regime of shocking cruelty, which he kept secret from the mainland by censoring mail.

Foveaux was selective in his punishments, ruling with informers who got off lightly while some were routinely sentenced to 200 lashes as a mere “feeler”. Others were kept in tiny dark isolation cells in water pits for 48 hours unable to sleep or even crouch for fear of drowning. Women were treated as slaves and bought and sold freely. Doctors and clergymen on the island tried in vain to ease the punishments before a fellow major took exception at Foveaux punishing his soldiers without a proper court martial. Foveaux was sent to England but exonerated and came back to Norfolk with a promotion. New arrivals got 25 lashes to show authority and whenever a foreign ship was sighted, Irish prisoners were herded up into a timber building with orders for it to be set alight if the ship landed. It was ill-health that ended the horrible reign of King Joseph I of Norfolk and he returned to England in 1804 as an asthmatic.

William Bligh was now governor in Sydney, but again the subject of mutiny this time by landholder John Macarthur. When Bligh attempted to stop the rum trade by arresting Macarthur, his officers sided with Macarthur and instead put Bligh under house arrest. Colonel William Paterson arrived in 1809 to relieve Bligh. By 1810 American whalers had told the world of Christian’s mutineers on Pitcairn while life was generally quieter on Norfolk. The last convicts were removed in 1814 and the island was turned loose to 12 fierce dogs.

That year Samuel Marsden arrived from the London Missionary Society to convert the people of the south Pacific, with New Zealand as his base. In 1824 Norfolk was re-established as an outpost of the “ne plus ultra of Convict degradation”. New governor Ralph Darling enthusiastically ordered the withdrawal of all women to make the island a place of “extreme punishment short of death”. In 1826 a revolt held out for several weeks before its leaders were caught and hanged in Sydney. Another martinet James Morriset arrived in 1829 and he got round the official limit of 300 lashes by imposing the sentence multiple times. Morriset had uncontrollable rages towards his prisoners with a total lack of interest in running the settlement.

Over in Pitcairn a new arrival named John Buffett took over teaching duties and eventually control of the island before falling foul of alcohol. Another charlatan missionary Lord Joshua Hill arrived claiming to be sent by the British. He denounced the older settlers and appointed a cadre of sub-rulers to enforce his own rule until he too was violently deposed. The islanders were anxious to become part of the British Empire and when Captain Russell Elliot arrived in 1838, he produced a “constitution” Britain would eventually recognise in 1887. The island was a regular stop of whalers but became an outpost of the Church of England under George Selwyn.

In Norfolk, there was temporary respite with the kind reign of Alexander M’Konochie. M’Konochie was convinced punishment was counter-productive and allowed prisoners to be treated humanely. They could earn freedom by labour and good conduct and the lashings stopped. However Governor Gipps would not extend this treatment to repeat offenders on the island, an injunction M’Konochie disobeyed. Once word got back to Sydney he was recalled and the brief reform era ended. The island continued as a gulag of terror until closed in 1855.

The empty island suddenly appeared as an attractive proposition for the Pitcairners who were outgrowing their tiny home. An 1855 poll found 153 out of 187 in favour of the move and they sailed west a year later under a founding document auspiced by Queen Victoria, though some returned after a short while. In 1863 there was another split and another 27 settlers returned to Pitcairn. Those that stayed fell under the power of Selwyn and his Melanesian high church Mission. The Mission farm became profitable and the island became a benevolent church dictatorship surviving on free labour or “field hands for the Lord”.

In 1897 Governor Hampden issued an order-in-council annexing Norfolk to any federal body which NSW might join. However Norfolk was not included in the new commonwealth of Australia in 1901. Numbers dwindled in the 20th century and by the 1930s the island was in crisis. An airstrip was built in the Second World War and a radar station, and the war proved a spur to development. By the 1960s tourism was on the rise but so were tensions with Australia over taxpayer funding. Norfolk made money by printing stamps but by 1975 a High Court decision ruled the island was irrevocably part of Australia and should be included in the electorate of Canberra. The Pitcairners lost their special status and a Norfolk Island Territory Assembly was given powers to raise revenues and taxes.

To this day, the tension between Pitcairners and non-Pitcairners remain about obligations to racial discrimination laws. The dysfunction of Norfolk government has been a running sore for Canberra, while Pitcairners emphasise their special status. In June Canberra took direct control of the island ending 36 years of direct rule much to local disgust and mass protest. Governance consultant Gary Russell, a member of the New Zealand UN Association, says he believes Australia cannot continue to act without consulting the founding document. “Even the Crown in England kept reminding the Australian state governments when they kept changing petitions,” he said. “’Have you consulted with the people of Norfolk Island before you instigate these changes?’ and of course this has not happened over the last 160 years.” Macklin’s Dark Paradise has not yet seen the light.

The Asylum: How a bunch of rogue traders at Nymex took over the world oil market

asylumThe little-known but important story of how a bunch of potato traders at the New York Mercantile Exchange (Nymex) came from nowhere to set the world oil price is told delightfully in the book The Asylum by talented American journalist Leah McGrath Goodman. That no one exactly understood how oil prices are set is demonstrated in Goodman’s book with the transcript of an extraordinary interview between right-wing Fox News pundit Bill O’Reilly and Nymex executive John D’Agostino in 2008.

At the time, the oil price was skyrocketing towards $150 a barrel and O’Reilly was anxious to blame Venezuelan left-wing president Hugo Chavez and OPEC’s “greedy sheiks” for the high prices. D’Agostino was having none of it. He told O’Reilly high demand and a low US dollar were more to blame. O’Reilly was flabbergasted as the conversation continued. “[OPEC] gave Cheney the middle digit… they can change whatever they want, right?” he says. D’Agostino replied, “No, OPEC only set the oil supply, the price of oil is actually set in New York”.

The rest of the conversation is worth reporting in detail:

O’R: Is there a guy who says $125 a barrel?

D’A: No. There’s a huge market that sets the price.  It’s filled with hedgers. It’s filled with speculators.

O’R: Somebody has to put the $125 on the barrel. Who does it?

D’A: They’re getting it from this market.

O’R: Who is “they”?

D’A: The oil producers…

O’R: The CEO of Shell or ExxonMobil says ‘We’re going to pay $125 a barrel”. Is that what they say? I thought it was the sheiks and Hugo Chavez.

D’A: No, No. They are all looking to the exchanges, the free markets, to set the price. The markets right now are saying the price of crude is about $120 a barrel. It’s going up and gasoline prices are directly related to crude oil prices.

O’R: But somebody has to make a decision.

D’A: It would be great if there was just one person doing that, because then we could go talk to him.

The exchange ended with an exasperated O’Reilly believing he was being hoodwinked. It was a sentiment shared by his Fox viewers who showered the station with angry emails unable to believe it was American capitalists setting the price of oil not greedy Arabs and leftist dictators. But what D’Agostino was saying was true. The price of oil really was being set by a bunch of anonymous traders off Wall St who thought nothing of bringing the global economy to its knees.

This is upsetting because they are not nice people. As Goodman said, traders are yellers. One trader told her they yell because they don’t have time to be polite. “It’s a world of super-assholes,” he said. “They’re all dicks, crude, manly men.” They work on the futures market which is a scarier version of the stock exchange. Energy traders bet on the price of oil in any of the months to follow, to a period of ten years. It is precise. Even if you correctly bet prices will go up in a certain year, if you get the month wrong you could lose millions. Traders not only bet on the future price but also on the difference from month to month in a practice called “spread trading”, which they hedged against the outright future bets.

The market was Darwinian where the strongest and loudest ruled. The trading floor was often violent and nice guys didn’t last. Traders were assisted by runners who wore goggles to protect themselves from the constant shower of trading cards raining down on them. Traders were fined $100 for every card that didn’t reach the pit in one minute of trade and expertly flicked cards which would arch perfectly before landing across the two-storey high room. Position in the trading ring was crucial because if you stood close to a major trader you would have access to all the information they got.

Nymex was always a down-at-heel exchange compared to the New York Stock Exchange. The guys that bet on the blue chip companies looked down on the shabby traders of minerals and commodities. If the NYSE traders took an academic and mathematical approach to the market, Nymex operated more from the gut. Overthinking was bad, trading was “freestyle” and the traders were street smart. Porn was common on the floor, as were drugs. There was reputed to be firearms too. The cops left them alone as they contributed large amounts to the Police Foundation. The traders’ word was their bond and behind their bland trading jackets, there were many multi-millionaires. There were 816 seats in the exchange and they sold for $1.6 million a pop or could be leased out at $10,000 a month.

It was only in the 1980s that Nymex hijacked the oil market. Before that it was trading home of the humble Maine potato. For half a century, around 70 traders operated out of a redbrick mansion in downtown New York betting on spuds, unaware their world was crumbling around them. A rival market was emerging in Idaho potatoes while Maine’s annual potato crop was falling. The market was also corrupt with stories of bags filled with potato-shaped stones and spoiled Maine potatoes arriving at markets in the Bronx. Worse still, a national consensus was developing that potatoes tasted better from Idaho than Maine.

Initially this led to volatile prices which the traders loved. The wilder the swings, the more opportunity for profit. When the supply ran out at the end of spring each year, prices would go crazy, with half the market betting prices would rise and the other half hoping they would fall. The trading pit would be full of farmers, politicians, bankers and spectators who would come to watch the show each May. Traders were obsessed with Maine gossip, Maine weather, Maine soil. Because future contracts were tied to actual quantities, traders had to get in, make money and get out quickly to avoid a pile of potatoes arriving on their doorstep. Traders skilfully exploited the expiration date right up to the last few seconds to end up “flat” in the market without any bets left on the table.

The whole idea of a futures market sounds absurd but has practical value. It made it possible for farmers to lock in future profits in advance at an agreed price. It gave them financial stability to plan their business years ahead with price risks transferred to the speculator who pockets the resulting profit or loss. This underlying utility still drives the futures markets in commodities like oil.

Incredibly, Maine potatoes were the third most traded commodity in America in 1976. But an enemy at the gates was about to spoil Nymex’s party. JR Simplot was an eccentric Idaho farmer, nicknamed the Potato King. When he died in 2008 aged 99, he was the oldest person on the Forbes 400 rich list worth $3.6 billion. Starting out as an onion farmer, he branched into potatoes winning the contract to supply US armed forces in the Second World War and then McDonald’s in the 1960s. Simplot was annoyed Nymex would not trade his Idaho potatoes. In the May 1976 rush he played against the Nymex traders selling millions of dollars of potatoes driving the price down. But unlike the traders he did not go “flat” at the close of trade.

Simplot was left with a contract to deliver massive amounts of Maine potatoes which to the consternation of the market, he did not have. However what he did have in plenty was Idaho potatoes which he offered in compensation.  Nymex refused to accept his Idaho potatoes and the market defaulted. Simplot was fined $50,000 but succeeded in busting the Maine market.

Nymex lost all legitimacy and most of its traders resigned. In 1977 they appointed a 27-year-old trader named Michel Marks to be its unpaid chairman. Marks was the son of a former Nymex trader and a child prodigy. Reeling from the loss of potato futures, the exchange scraped by, betting on odd trades like Australian beef cattle (when it was supposedly tainted by kangaroo meat, the price oscillated wildly, an outcome traders loves). Its rival exchange the Chicago Mercantile Exchange (Comex) overtook it and tried to buy out the cut-price seats at Nymex. The deal only went south when Comex pulled out thinking they had paid too much money for it.

In the short term it left Nymex in a huge hole but in the longer term it was Comex who suffered. Marks worked around the clock in 1978 to understand the business inside out. Some traders wanted to bring back a potato market but the Simplot scars were too deep. In any case the market regulator permanently banned potato trading. There was money to be made selling platinum and other metals but these markets were not volatile enough to be super profitable. Looking at what was dormant on the books, Marks hit on heating oil.

It was an far-seeing energy economist named Arnold Safer who convinced Marks that the free market would eventually set the price of oil. In the earliest days of oil the price was set by John D. Rockefeller and his “barrels”, before it was taken over by a consortium of the Texas railroad and the oil majors. Since the 1973 Oil Crisis, it was OPEC that was flexing its muscle. But Safer told Marks non-OPEC countries would eventually flood the market with excess oil destroying the Middle Eastern cartel. He also advised Marks to only trade things whose prices weren’t fixed by the government. The opportunity came with the deregulation of the heating oil market in the late 1970s. Mark dusted off an old contract to sell heating oil to the Dutch. In an ingenious move, he scratched out Rotterdam and changed it to New York harbour so they could concentrate on local trade.

The future market for heating oil opened on November 14, 1978. Volume was low on the opening day which was not a good sign. “Low volumes beget no volumes” was the conventional wisdom in the trading pits. Marks hassled the big traders, energy companies and banks to trade with him but no-one believed OPEC could be challenged. However because Nymex had no history with oil, the industry made the fatal miscalculation of ignoring them.

Heating oil merchants paid vastly inflated for their product while even OPEC struggled to turn a buck when its price for oil did not keep up with the changes to supply and demand. Private oil companies exploited the difference by hoarding oil contracts, locking in higher prices. They charged $10 more a barrel than the OPEC price but Marks decided to do exactly the opposite. His heating oil was 20c a gallon cheaper than Exxon. His customers were initially worried whether Nymex could guarantee continuous supply and they also worried Exxon might find out about the deal and punish them. But cheap oil is cheap oil and enough merchants did bid to give Marks the start he needed. Nymex traders didn’t care about the product or the price, what they needed were sufficient bids and offers to work the gaps.

Word slowly got out about the bargains at Nymex. Serious corporate customers arrived in the form of drillers, refiners and shippers of heating oil. Within months the number of bids went from hundreds a day to many thousands. For the first time ever, buyers and sellers of heating oil could tell exactly what the price was by looking at the Nymex trading board. It gradually attracted all of the heating oil contracts of the United States, turning the exchange into an invaluable source of information. People began to trust the exchange because it was a public market and because, unlike the oil companies, it did not rely on ever-increasing prices to make a profit.

Things really took off in 1980 when the Iraq-Iran war broke out. When the news broke, over 50 traders immediately flooded the ring clamouring for heating oil. Within days the Nymex price doubled and would have risen further but for government-imposed price limits. The low and high price were the same as everyone was buying and there were no sellers. There was a vast underground trade into the higher-priced unregulated market controlled by the oil companies, an illegal practice but one which flourished without supervision.

New US president Ronald Reagan gradually eased price controls and Marks debuted futures on leaded petrol (gasoline) in 1981. That market was so successful it continued for two years even after leaded petrol was banned in the US. In 1983 Reagan removed the last of the oil price controls and Nymex launched its crowning glory: a futures contract on sweet crude light oil, the bedrock of the industry. Marks opened a specific market to sell West Texas Intermediate light to the largest oil storage facility in the world at Cushing, Oklahoma.

The dots were starting to join. US Oil production was on the decline and Americans were cutting usage. OPEC jacked up its prices as did the oil companies. But the supply scare had caused non-OPEC companies to increase production flooding the market with oil, plummeting the price. Panicked Wall St traders rushed to Nymex to hedge their expensive contracts. Nymex became a huge liquidation warehouse selling off oil at bargain-basement prices. The traders made a killing on each transaction. Suddenly power was no longer in Houston, Amsterdam or the OPEC HQ at Vienna but at a grimy rat-infested building in lower New York, inhabited as Leah Goodman said by “misfits and pranksters and gun-toting gangsters who had absolutely no knowledge of the oil business”.

Over the years that followed, other players muscled in on the market but Nymex’s position was secure. Even the oil companies came cap in hand to the exchange and openly traded on the market. When Nymex moved to the World Trade Centre the market was so intense, it did not notice the smoke pouring into the room after the 1993 bombing and traders refused to evacuate. Nymex moved out of the WTC before 2001 which was prescient. But it was slower to see the oncoming of electronic trading and almost lost the market entirely to the more innovative Intercontinental Exchange (ICE). With Nymex’s power waning they agreed to a merger with its former enemy Comex in 2008 and finally the electronic boards replaced the whirring of paper in the pits.  A handful of traders still ply their wares in a small venue using the old open outcry system of the potato trading days. There are calls for it to be preserved. But Nymex is no museum. Although people like Bill O’Reilly never knew it, its traders still set the price of oil to this day.