THE SLIPPERY BUSINESS OF OIL

A little while before I set up this Gopher hole, my documentary 
addiction swung to the topic of oil. From searching for it, 
extracting and refining it, to the politics surrounding it. On the 
technology side I was well rewarded by the wealth of films produced 
by Shell and other producers in the mid 20th century, which 
highlight the extremes of technical innovation that have gone into 
the world's oil quest.

Less well covered by those archival films than the technical 
aspects is a full story of the history and politics of oil. 
Recently I discovered an eight-part documentary series broadcast by 
PBS in 1992 called "The Prize: Epic Quest for Oil, Money and 
Power", based on a book of the same name.

https://docuwiki.net/index.php?title=The_Prize:_Epic_Quest_for_Oil%2C_Money_and_Power

Official YouTube playlist
https://www.youtube.com/watch?list=PLYkO4hiKyrSRjZLQunIjgCsz4GrpDGPfN

Beginning with the first commercial oil well in America in the mid 
1800s, established by an eccentric self-titled colonel who it notes 
in passing actually died poor, the series continues to the oil 
monopoly of John D. Rockefeller. Then the Texas oil boom where 
there's very good footage of oil wells crammed in on top of each 
other in the 20s before regulators and cartels eventually 
engineered a system designed to prevent the over-production and 
corresponding rapid price collapses that previously hit the 
American oil industry with each new discovery. The industry, led 
from the USA both in terms of production and consumption, is a 
curious look at free-market economics gradually being strangled in 
the land of the free market, after having run amok through the 
first decades of the oil-fueled 20th century. The government 
breaking up Rockefeller's brutal monopoly (the Standard Oil 
Company), and then the cartels established around the borders of 
the US' anti-trust laws to prevent over-supply.

Later episodes cover oil in the middle-east, discovered by the 
British in then Persia, now Iran. A surprise is that Winston 
Churchill effectively made the then Anglo-Persian oil company, now 
BP, into a major player in the industry. Just prior to the first 
world war he was working on transitioning the Royal Navy from coal 
to oil and fears were that the part-Dutch ownership of Shell 
exposed the navy's oil supply to the influence of... foreigners. 
Churchill described this reliable access to oil as the "prize". 
Majority government ownership of Anglo-Persian cemented it as a 
trusted source of oil from the middle east, even though Shell ended 
up supplying most of Britain's oil during the war in the end anyway.

Following from this, the importance of oil in the events of both 
world wars is specifically highlighted by the documentary. Its 
importance in the strategies of the oil-poor axis powers is 
described in an episode dedicated to WWII. The Russian front, made 
familliar to me by The Unknown War, is examined for Hitler's aim of 
controlling the Soviet oil fields. Successful defence of the region 
by the Red Army contributed to the sustained tightening of German 
fuel supplies that eventually crippled its millitary. Germany's 
alternative solution of producing synthetic oil from coal is also 
covered, eventually victim of aerial bombing by the allies. The 
Japanese need for oil imports during the war is described as the 
prime motivation for the Perl Harbour attack, to secure the 
shipping lanes for oil from Indonesian oil wells. Yet at the same 
time they inexplicably missed the opportunity to destroy the oil 
reserves for the American Pacific fleet, enabling it to immediately 
regroup.

Following the war, the oil story turns into one of two-and-fro 
politics between the west and the middle-eastern countries where 
ever larger oil reserves were being discovered. Power shifts 
gradually, from the old but weakening power of the British, 
eventually losing their Iranian oil reserves to nationalisation, to 
the Americans whose wealth was increasing at speed with their 
multiplying oil consumption, then to the Arab states who realised 
the west's demand for oil allowed them to take over the reigns of 
price setting and political influence from the big oil companies, 
via the famous OPEC cartel. Eventually it heads into the modern 
theme of war in the middle-east, driven by competition between the 
newly wealthy independent oil nations. In this region previously 
overseen by the British half a century earlier, the Americans now 
take on the role of securing their oil interests against local 
threats by force in the Gulf War, and of course with this 
documentary made in 1992 there was plenty more to come from that 
story.

Yet also described is a deliberate movement by the major oil 
companies to break their dependency on the whims of rich Arabs 
following the oil crisis in the 1970s. Although that event inspired 
an early spurt of effort to find alternative energy sources, it 
also simply pushed companys who had become lazy with the prospects 
of exploring oil in new parts of the world to probe for reserves in 
areas that were phyically difficult to access, but politically much 
more friendly. BP built an oil pipeline to new fields through the 
frozen peaks of Alaska, and in Britain offshore oil in the North 
Sea was exploited.

The last episode also pokes its nose into Siberia, following an 
intrepid oil company called White Nights who were testing the 
gravely unstable economics and politics of newly post-communist 
Russia to set up oil wells there, giving away snowmobiles to try 
and win over the locals. It looks like, from the sporadic early-90s 
news articles that pop up in Web searches, that White Nights didn't 
last all that long, and it's well known that the Russian oil 
industry ended up dominated by Russian oligarchs (whose power was 
then to be shortly curtailed by Putin). Overall this documentary 
doesn't shine much light on Russian oil in the communist era. Its 
early pre-revolution development through western investment is 
described, but by the time we rejoin those old oil fields in the 
last episode, they're a wasteland of failed infrastructure and 
ecological tragedy, with no real light shone on the in-between. In 
spite of being made at the start of the prime years for 
documentaries peeking behind the iron curtain, the producers didn't 
go there and left the story very western-focused. In part it might 
be because they seem to have gone to pains to only interview 
English-speakers, perhaps unwilling to subject their audience to 
subtitles.

Also left out entirely were the French, present of course in 
Algeria and with a historical influence similar to the British in 
other large parts of Africa. The Algerian oil industry was 
developing just at the same time as the Algerian War, and the 
French managed to secure a deal to continue supply from their oil 
fields even after Algerian independence. But it proved to be a 
shaky deal, and the Algerians nevertheless pursued independent oil 
exports to other countries. So the french oil industry, dominated 
by the partly state-owned Elf company, looked to oil reserves in 
former French colonies of Africa.

This story isn't even mentioned in passing by The Prize, but a more 
recent documentary series by Al-Jazeera in 2013 explores a similar 
sequence of events to what happened to the Americans in the 
middle-east. The French exploited their connections with greedy 
East-African leaders looking to secure wealth and power through 
foreign oil money and even some direct assistance by the French 
armed forces in repressing their political opposition. Then as the 
leaders grew extremely wealthy from kick-backs and misappropriation 
of state funds lended from overseas, they discovered like the Arabs 
that they now had power over the French to decide whether or not to 
sell them the oil that their oil industry (itself now deeply 
ingrained in corrupt French politics) depended on. So began what 
one former man of the French secret service describes as "reverse 
colonisation", where in particular the president of the 
oil-producing East African country of Gabon eventually aquired such 
power as to have a direct role in manipulating French politics, 
down to claims of him successfully getting government ministers he 
didn't like dismissed from their positions. The fall of the French 
state's Elf oil company itself in a national fraud and corruption 
scandal is also documented. Finally Elf was dissolved in 2000 to 
put an end to ongoing enquiries into its corrupt practices and deep 
political influence, with the assets sold to its smaller French 
competitor Total (I've long wondered where they appeared from).

https://docuwiki.net/index.php?title=The_French_African_Connection

Interestingly the Algerian oil fields, from which oil currently 
seems to be sold without preference towards the French, haven't 
expanded into areas beyond where they originally developed in the 
late 1950s and early 60s. This article suggests that much of the 
country's oil and natural gas reserves remained unexploited in 
2013, and it doesn't look like that's changed since:

Algeria: the Arab World's often forgotten massive oil giant
https://www.albawaba.com/business/algeria-oil-giant-528212

Looking also at how oil producers found alternate sources after the 
politics of the middle-east turned against them, and later 
improvement in extraction from oil sands as shown in the following 
documentary, I wonder how much the current price rises are a built 
in part on a manufactured sense of scarcity. Indeed the history 
shows how such manipulation of market forces has been ingrained in 
the industry since its reaction to the oil surplus of the 1920s, 
and OPEC production cuts are credited with helping to avoid a 
surplus due to the drop in demand during the COVID-19 pandemic. The 
world economy is largely driven by the oil price, yet the forces 
affecting that price seem more opaque than ever.

https://docuwiki.net/index.php?title=Ultimate_Oil_Sands_Mine

As in The Prize, I've left it late to tackle what is today the 
elephant in the room when talking about oil. Only in the last 
episode are the environmental concerns of burning oil really 
examined at all. The future of oil is explored at both ends of the 
pipe. Drivers on the highways of Los Angeles talk to 
creatively-mounted cameras on their cars as they speed about, 
expressing the exact same contradictions of environmental concern 
and personal love of motor transport that are common today. Then we 
see the oil executives, one filmed in a truely palatial office, 
forecasting the decline of US oil production due to increased 
regulation, yet a continued oil demand for around 50 - 100 years. 
Another factor is growth of oil consumption in the third world, one 
interviewee noting something like "give every person in China today 
a motor scooter, and I'll give you an oil crisis tomorrow". In fact 
in a China where people can now afford scooters, electric vehicles 
have been more widely adopted than anywhere else, with laws even 
requiring some vehicle owners to go electric (I gather mainly to 
reduce smog in big cities).

But oil consumption in China (which is also another oil producer 
that The Prize doesn't mention) has nevertheless increased greatly, 
not just for fuel but as a consequence of the country's 
transformation since the time of the documentary into the factory 
of the world. Petrochemicals for making plastics and textiles are 
now the leading force behind China's increasing post-pandemic oil 
thirst, in a global trend that's forecast to have peak carbon 
dioxide emissions from burning oil for fuel reached while overall 
oil consumption still increases.

China's petrochemical surge is driving global oil demand growth
https://www.iea.org/commentaries/china-s-petrochemical-surge-is-driving-global-oil-demand-growth

As for where most of the world's oil comes from, twenty years after 
"The Prize" Al-Jazeera highlighted a change to that in their 
documentary "The Secret of the Seven Sisters", that being the name 
attributed to the protective cartel of western oil companies set up 
to fix oil prices after the oil surplus of the 1920s. Although I 
haven't watched it yet, like The Prize, it claims to plot the rise 
of these companies as they oversaw an ever-growing western oil 
market dominated by US production. Then it wants to make a point of 
how, like the early-90s oil executives predicted, US production 
dwindled to a minority, taking with it the power of the Seven 
Sisters.

https://docuwiki.net/index.php?title=The_Secret_of_the_Seven_Sisters

But now they're back! With the advent of fracking, and I suspect 
some preference by the US government to regain its oil exports at a 
cost to social/environmental concerns that limited it in the 90s, 
the US has swung around to again be an oil exporter, and even 
regained its title as the biggest producer in the world. 

United States produces more crude oil than any country, ever
https://www.eia.gov/todayinenergy/detail.php?id=61545

(Daniel Yergin, author of the original book published in 1990, 
published in 2011 "The Quest: Energy, Security, and the Remaking of 
the Modern World" which based on the Wikipedia page covers most of 
these newer topics)

Ignoring that fracking is even more environmentally damaging, this 
innovation has again reshaped the balance of oil power during its 
new era of ever-pending decline. The American oil industry is 
currently doing rather well out of the EU banning Russian oil 
shipments in objection to the war in Ukraine. As in the Cold War, 
the Russians have dropped their prices in response and thus less 
fussy countries like India reap the benefit of a cheaper Russian 
supply replacing US oil imports.

U.S. crude oil exports reached a record in 2023
https://www.eia.gov/todayinenergy/detail.php?id=61584

In spite of hopes for the obsolescence of oil, in the early 90s and 
much more so today, it looks very likely that power and prosperity 
will continue to follow the flow of this black gold for many years 
to come. Yet probably never again as simply and effectively as it 
did a lifetime ago in the black and white post-war wonder years of 
the American dream.

 - The Free Thinker