Winston Churchill changed his mind almost overnight. Until the summer of 1911, the young Churchill, Home Secretary, was one of the leaders of the “economists,” the members of the British Cabinet critical of the increased military spending that was being promoted by some to keep ahead in the Anglo—German naval race. That competition had become the most rancorous element in the growing antagonism between the two nations. But Churchill argued emphatically that war with Germany was not inevitable, that Germany’s intentions were not necessarily aggressive. The money would be better spent, he insisted, on domestic social programs than on extra battleships.
Then on July 1, 1911, Kaiser Wilhelm sent a German naval vessel, the Panther, steaming into the harbor at Agadir, on the Atlantic coast of Morocco. His aim was to check French influence in Africa and carve out a position for Germany. While the Panther was only a gunboat and Agadir was a port city of only secondary importance, the arrival of the ship ignited a severe international crisis. The buildup of the German Army was already causing unease among its European neighbors; now Germany, in its drive for its “place in the sun,” seemed to be directly challenging France and Britain’s global positions. For several weeks, war fear gripped Europe. By the end of July, however, the tension had eased—as Churchill declared, “the bully is climbing down.” But the crisis had transformed Churchill’s outlook. Contrary to his earlier assessment of German intentions, he was now convinced that Germany sought hegemony and would exert its military muscle to gain it. War, he now concluded, was virtually inevitable, only a matter of time. |
Appointed First Lord of the Admiralty immediately after Agadir, Churchill vowed to do everything he could to prepare Britain militarily for the inescapable day of reckoning. His charge was to ensure that the Royal Navy, the symbol and very embodiment of Britain’s imperial power, was ready to meet the German challenge on the high seas. One of the most important and contentious questions he faced was seemingly technical in nature, but would in fact have vast implications for the twentieth century. The issue was whether to convert the British Navy to oil for its power source, in place of coal, which was the traditional fuel. Many thought that such a conversion was pure folly, for it meant that the Navy could no longer rely on safe, secure Welsh coal, but rather would have to depend on distant and insecure oil supplies from Persia, as Iran was then known. “To commit the Navy irrevocably to oil was indeed ‘to take arms against a sea of troubles,’ ” said Churchill. But the strategic benefits— greater speed and more efficient use of manpower—were so obvious to him that he did not dally. He decided that Britain would have to base its “naval supremacy upon oil” and, thereupon, committed himself, with all his driving enthusiasm, to achieving that objective.
There was no choice — in Churchill’s words, “Mastery itself was the prize of the venture.”
With that, Churchill, on the eve of World War I, had captured a fundamental truth, and one applicable not only to the conflagration that followed, but to the many decades ahead. For oil has meant mastery through the years since. And that quest for mastery is what this book is about.....
Though the modern history of oil begins in the latter half of the nineteenth century, it was the twentieth century that was completely transformed by the advent of petroleum. In particular, three great themes underlie the story of oil.
There was no choice — in Churchill’s words, “Mastery itself was the prize of the venture.”
With that, Churchill, on the eve of World War I, had captured a fundamental truth, and one applicable not only to the conflagration that followed, but to the many decades ahead. For oil has meant mastery through the years since. And that quest for mastery is what this book is about.....
Though the modern history of oil begins in the latter half of the nineteenth century, it was the twentieth century that was completely transformed by the advent of petroleum. In particular, three great themes underlie the story of oil.
The first is the rise and development of capitalism and modern business. Oil is the world’s biggest and most pervasive business, the greatest of the great industries that arose in the last decades of the nineteenth century. Standard Oil, which thoroughly dominated the American petroleum industry by the end of that century, was among the world’s very first and largest multinational enterprises. The expansion of the business in the twentieth century—encompassing everything from wildcat drillers, smooth-talking promoters, and domineering entrepreneurs to highly trained scientists and engineers, great corporate bureaucracies, and state-owned companies—embodies the evolution of business, of corporate strategy, of technological change and market development, and indeed of both national and international economies. Throughout the history of oil, deals have been done and momentous decisions have been made— among men, companies, and nations—sometimes with great calculation and sometimes almost by accident. No other business so starkly and extremely defines the meaning of risk and reward—and the profound impact of chance and fate…..
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Standard Oil headquarters, New York City
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The second theme is that of oil as a commodity intimately intertwined with national strategies and global politics and power. The battlefields of World War I established the importance of petroleum as an element of national power when the internal combustion machine overtook the horse and the coal- powered locomotive. Petroleum was central to the course and outcome of World War II in both the Far East and Europe. The Japanese attacked Pearl Harbor to protect their flank as they grabbed for the petroleum resources of the East Indies. Among Hitler’s most important strategic objectives in the invasion of the Soviet Union was the capture of the oil fields in the Caucasus. But America’s predominance in oil proved decisive, and by the end of the war German and Japanese fuel tanks were empty. In the Cold War years, the battle for control of oil between international companies and developing countries was a major part of the great drama of decolonization and emergent nationalism. The Suez Crisis of 1956, which truly marked the end of the road for the old European imperial powers, was as much about oil as about anything else. “Oil power” loomed very large in the 1970s, catapulting states heretofore peripheral to international politics into positions of great wealth and influence, and creating a deep crisis of confidence in the industrial nations that had based their economic growth upon oil. Oil was at the heart of the first post–Cold War crisis—Iraq’s 1990 invasion of Kuwait…..
A third theme in the history of oil illuminates how ours has become a “Hydrocarbon Society” and we, in the language of anthropologists, “Hydrocarbon Man.” In its first decades, the oil business provided an industrializing world with a product called by the made-up name of “kerosene” and known as the “new light,” which pushed back the night and extended the working day. At the end of the nineteenth century, John D. Rockefeller had become the richest man in the United States, mostly from the sale of kerosene. Gasoline was then only an almost useless by-product, which sometimes managed to be sold for as much as two cents a gallon, and, when it could not be sold at all, was run out into rivers at night. But just as the invention of the incandescent light bulb seemed to signal the obsolescence of the oil industry, a new era opened with the development of the internal combustion engine powered by gasoline. The oil industry had a new market, and a new civilization was born….
For most of this century, growing reliance on petroleum was almost universally celebrated as a good, a symbol of human progress. But no longer. With the rise of the environmental movement, the basic tenets of industrial society are being challenged; and the oil industry in all its dimensions is at the top of the list to be scrutinized, criticized, and opposed. Efforts are mounting around the world to curtail the combustion of all fossil fuels – oil, coal, and natural gas – because the resultant smog and air pollution, acid rain, and ozone depletion, and because of the specter of climate change. Oil, which is so central a feature of the world as we know it, is now accused of fueling environmental degradation; and the oil industry, proud of its technological prowess, and its contribution to shaping the modern world, finds itself on the defensive, charged with being a threat to present and future generations.
Yet Hydrocarbon Man shows little inclination to give up his cars, his suburban home, and what he takes to be not only the conveniences but the essentials of his way of life. The peoples of the developing world give no indication that they want to deny themselves the benefits of an oil-powered economy, whatever the environmental questions. And any notion of scaling back the world’s consumption of oil will be influenced by the extraordinary population growth ahead…. The global environmental agendas of the industrial world will be measured against the magnitude of that growth. In the meantime, the stage has been set for one of the great and intractable clashes of the 1990s between, on the one hand, the powerful and increasing support for greater environmental protection and, on the other, a commitment to economic growth and the benefits of Hydrocarbon Society, and apprehension is about energy security.
A third theme in the history of oil illuminates how ours has become a “Hydrocarbon Society” and we, in the language of anthropologists, “Hydrocarbon Man.” In its first decades, the oil business provided an industrializing world with a product called by the made-up name of “kerosene” and known as the “new light,” which pushed back the night and extended the working day. At the end of the nineteenth century, John D. Rockefeller had become the richest man in the United States, mostly from the sale of kerosene. Gasoline was then only an almost useless by-product, which sometimes managed to be sold for as much as two cents a gallon, and, when it could not be sold at all, was run out into rivers at night. But just as the invention of the incandescent light bulb seemed to signal the obsolescence of the oil industry, a new era opened with the development of the internal combustion engine powered by gasoline. The oil industry had a new market, and a new civilization was born….
For most of this century, growing reliance on petroleum was almost universally celebrated as a good, a symbol of human progress. But no longer. With the rise of the environmental movement, the basic tenets of industrial society are being challenged; and the oil industry in all its dimensions is at the top of the list to be scrutinized, criticized, and opposed. Efforts are mounting around the world to curtail the combustion of all fossil fuels – oil, coal, and natural gas – because the resultant smog and air pollution, acid rain, and ozone depletion, and because of the specter of climate change. Oil, which is so central a feature of the world as we know it, is now accused of fueling environmental degradation; and the oil industry, proud of its technological prowess, and its contribution to shaping the modern world, finds itself on the defensive, charged with being a threat to present and future generations.
Yet Hydrocarbon Man shows little inclination to give up his cars, his suburban home, and what he takes to be not only the conveniences but the essentials of his way of life. The peoples of the developing world give no indication that they want to deny themselves the benefits of an oil-powered economy, whatever the environmental questions. And any notion of scaling back the world’s consumption of oil will be influenced by the extraordinary population growth ahead…. The global environmental agendas of the industrial world will be measured against the magnitude of that growth. In the meantime, the stage has been set for one of the great and intractable clashes of the 1990s between, on the one hand, the powerful and increasing support for greater environmental protection and, on the other, a commitment to economic growth and the benefits of Hydrocarbon Society, and apprehension is about energy security.
Daniel Yergin is a leading authority on energy, geopolitics, and the global economy, bestselling author, and a winner of the Pulitzer Prize. He is Vice Chairman of IHS and founder of IHS Cambridge Energy Research Associates. Dr. Yergin is known around the world for his book The Prize: the Epic Quest for Oil Money and Power, which was awarded the Pulitzer Prize. It became a number one New York Times best seller and has been translated into 20 languages.
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