Oil, Power, and War: A Dark History

Introduction

Progress has long been considered a given: a guaranteed occurrence in human societies, a wheel that once set in motion continues to spin, aided only by human intelligence and innovation. But what really sparks or tempers progress?

The answer is energy potential—a physical reality measured by its capacity to change the nature of other things around it, to alter the order of the world, or to strengthen it. Each time that we put something in motion, each time that the state of something changes in one way or another, a flow of energy is in play. The economy—the framework around which our industrial society is ordered—and all of the technical progress it mobilizes are no exceptions.

In other words, energy is the ultimate universal currency. As Georges Bataille wrote in 1949, Essentially wealth is energy: Energy is the basis and the end of production.¹ Without adequate energy sources, ingenuity would be rendered impotent, its fruits out of reach. Progress would not progress.

Today, fossil fuels provide four-fifths of the energy we use. Nothing has changed on this front since the early days of the steam locomotive—apart from the ever-increasing amount of energy used, which has been compounded many times over to keep the economic machinery churning. Since the end of the Second World War and today more than ever, oil remains, among fossil fuel sources, the principal and most precious fuel of what I call technical humanity. It is omnipotent, versatile, polymorphic, ubiquitous.

Yet energy is ambivalent about what it sets in motion. It also has limits. And it is clear to anyone who actually looks that material limits define what is possible and what is impossible. Science fiction writer Frank Herbert put it this way: Energy absorbs the structure of things, and builds with these structures.² This obvious fact, however, is often ignored. Since the dawn of technological progress, the human spirit has fooled itself into believing that we are progress’s empowering force. But we are merely driving the course of progress. The tank of its real empowering force is still largely fueled by oil.

This book explores the paths followed so far by our primary source of energy, as well as the manner in which these paths have determined many dynamics and balances of power among us. For more than a century and a half, black gold has remained the most secure source of wealth. The industry that extracts it from beneath Earth’s surface has experienced revenues as much as ten times higher than any other industry’s. Economic and military power structures, as well as many critical aspects of our way of life, have been metabolized by the energy derived from oil, and shaped by forms specific to it.

The destiny of the strongest industrial nations is pegged to oil, starting with the United States, where more wells have been drilled than anywhere else on Earth. Absorbed by a nearly universal appetite for the American way of life, the world’s population has become, in spite of our misfortunes, the largest and most affluent in history. Now where are we headed?

It was on 9/11 that I began to ask deeper questions about the link between power and energy. Watching events unfold from France, where I was working as a journalist, I found myself saying, Just wait and see, Saddam will end up taking the punishment. Afterward, it was extremely hard for me to believe that Saudis were allowed to board a plane and leave the United States immediately after the attacks, without having to answer any questions from US authorities. With great astonishment I learned that the Bush and bin Laden families had actual direct connections. And I ended up wondering, what were the odds that these kinds of connections would exist?

Like many who grew up during the end of the great American century, I had long been immersed in American culture. I had an insatiable appetite for its cinema, its music, its literature, and more generally a sustained fascination with its creativity, humor, and vitality. I was dazzled by its intimacy with each innovation that the new technological world offered to me, a child of an old Europe so often tired of itself. That’s why the tragic catastrophe of the 2003 invasion of Iraq was a personal affront to my idea of America, the one I cherish so much.

And then I wondered if the Bush phenomenon constituted a singularity in American history, or if, on the contrary, it revealed a filum, a logical historical continuity between successive incarnations of US power and the energy sources essential for the expression of this unprecedented power.

Oil, Power, and War is the result of my inquiry.

I have chosen to divide the story that follows into seasons. Oil’s power took root in the United States a century and a half ago, entering its springtime around 1945, a period of time often recounted with nostalgia. That power passed through its summer solstice shortly before the decisive oil crisis of 1973, and is likely to extinguish somewhere in the course of the twenty-first century—giving birth to a new era, which will either be better or worse than this one. It’s up to us, today, to decide.

Part One of the book, Germination, recounts the earliest history of oil, before explaining how the Oil Age was, so to speak, born naturally—from the ground up—in the United States. We learn how the source of incomparable profit that black gold constitutes gave rise to many crucial aspects of modern capitalism as well as some of the fundamental structures of Wall Street. We look at how the availability of oil ushered in machinery that required ever more machinery and ever more oil, how the power of oil changed our notions of labor and shaped the outcome of the First World War, and how Iraqi oil was already then among the spoils of war shared by the victors. We learn how Big Oil forged close links with Nazi industry, how the knots of the Second World War were tightened around access to crude for Germany and Japan, and finally how those knots were eventually undone thanks to the then unequaled superiority of the energy power Mother Nature entrusted (by chance) to the United States of America.

It was this same energy power that presided over the arrival of spring for the oil era (Part Two) and created the golden age of the American Empire. It was an age during which the streams of power flowed directly from oil reserves controlled by the princes of the capitalist world establishment—be they the earliest (the Rockefeller dynasty) or those preparing their advent (the Bush clan, in particular)—all the while relying on a few secret structures that unite the ultimate networks of industry, finance, and intelligence. And it was an age when the waves of power stirred by oil often formed the prevailing matrix of political power, became the source of its dubious financing, and opened the floodgates to the great upheaval that defines the modern world: unprecedented population explosion, transformed lifestyles, and greedy aspirations to push any limits constraining human passions, for better and for worse.

The summer solstice (Part Three) was reached with the relentless decline of conventional oil across the United States, beginning in 1970. This ecological event, which revealed the existence of certain limits to growth, caused a cascade of economic and political turbulences, starting with the oil shock of 1973—a shock that some in Washington saw coming from afar and even encouraged, in order to let American hegemony mutate and perpetuate itself. That crisis led the American empire (again, naturally) to move toward the fabulous sources of black gold in the Persian Gulf, employing its tools of policy and power—tools that were both financial and military, and often covert and terrifying. It was in this summer of the Oil Age that a Faustian bargain was made around what one of the founders of OPEC came to call the devil’s excrement: Oil provided, to those who could play, a pinnacle of overindulgence; others, as we will see, paid the price.

The spiral accelerated faster with autumn (Part Four), which began at the turn of the millennium, when it finally became obvious that oil is not an inexhaustible fountain of youth. Nor is it innocuous—whether concerning economic growth, climate change, terrorism, or war. We explore the connections between the jostling to secure oil assets in a world whose easily accessible resources are dwindling, the occupation of Iraq and the endless wars in the Middle East, the financial crisis of 2008, and other defining features of recent decades, such as the appearance of the latest fix to human oil addiction: shale oil. More than any others, those years make starkly clear why overcoming the free reign that oil has exercised on humanity is an urgent objective. An objective that remains decidedly out of reach at present.

So, now, we can expect winter to come. How will we prepare to face the harsh next season that will soon be upon us?

Energy from petroleum arrived at a key moment in the development of our species. Today, the very thing that drives technical humanity has also become its nemesis. Risks multiply as the combustion of fossil fuels generates greenhouse gases, which in turn upset the planet’s climate. This danger, for the time being unresolved, masks another that is more direct and perhaps more immediate. Once consumed in our various machines, energy dissipates and disintegrates irretrievably in the form of heat, becoming almost useless. In this way our limited reserves of fossil energy are being consumed with ever-increasing greed. The history of those reserves is one of a series of depletions offset by the discovery of new stocks. But, lacking accessible reserves able to compensate for the natural decline of the large number of fields discovered in the last century, we risk a drastic disruption in supply—perhaps before 2030, even as early as around 2020. In any case, much too quickly for an industrial humanity that has sprouted from fields of crude to learn to live in peace with a perpetual lack of crude.

The perils of our dependency on fossil fuels have been understood since the beginning of the Industrial Revolution, though they’ve been consistently ignored.³ And so, the abundance of energy offered to us in the form of oil has been able to transform the world by itself. The pages ahead tell the story of how that happened, explore the conditions that allowed this abundance to precipitate turbulence, and revisit the history of societies lifted to excess and the lives of people caught up in the storm. Oil, Power, and War is also the history of people and institutions—corporations, nations—who fight to stay in the eye of the cyclone, believing it possible to impose their own direction on the vortex, or to transgress its limits.

PART ONE

GERMINATION

… TO 1945

ONE

A Seed Is Planted

A little temple stands on a dry and desolate patch of land one hour’s hike from the Caspian Sea, on the outskirts of Baku. Its construction is so simple that upon its discovery one puzzles at who might have built it, exactly where Asia meets Europe to the east of the Caucasus Mountains. Clearly a place of ritual, it exudes a primitive strength.

Placed in the center of a dusty courtyard in what was probably a caravansary—a fortified rest stop on the Silk Road—the structure is a cube of limestone with thick walls, opened by arches on each side and topped with a four-sided dome that lends it an archaic appearance. A uniquely distinctive, fine piece of forged iron is attached to one of the dome faces: It’s the trident-like trishula of the Hindu god Shiva, a symbol of creation, perpetuation, and destruction, pointing to the sky more than 3,000 kilometers from the Indus Valley.

Four short chimneys extend upward from the walls of the temple. Below the dome stands a large fireplace; a few meters to the side of the temple is a sixth source of incandescence, an eternal flame, which had once glowed from the center of a circular pit. Worshipped for centuries, it burned methane and naphtha, which seeped spontaneously from the porous rock beneath the foundation.

In its present form, the temple seems to have been built in the seventeenth century by a small community of merchants from India. But the origins of the Ateshgah, the Fire Temple of Baku, are much older—forgotten in the fog of ancient times. The Zoroaster faithful have long maintained that the flame has been revered since the deluge. Zoroastrianism—one of the oldest monotheistic religions, perhaps the oldest—was the major religion of Persia’s Achaemenid Empire, which included up to fifty million people (perhaps one-third of the human population during that era), from the sixth to the fourth century BC. One of the principal tenets of the Zoroaster doctrine is a belief in free will. Early Zoroastrians took to heart, maybe for the first time in recorded history, the notion that humans can choose between good and evil. Fire was considered an agent of purity, capable of exposing these opposing forces—a belief perpetuated by Judaism, Islamism, Christianity, and across the gnostic spectrum.¹

The presence of naturally occurring fire along the Caspian Sea must have had special significance for the Zoroaster faithful, who still today practice their religion in Zoroastrian fire temples. Evidence of fire worshipers attracted to the area can be traced back to the Middle Ages. As far back as the seventeenth century, Christian travelers sighted Zoroastrians and Hindu yogis at the Ateshgah, located in a place they called Surakhani, which seems to mean red fountain. The German naturalist Engelbert Kaempfer described seeing seven eternal fire pits during his visits in 1683.

Two centuries later, in 1883, the Ateshgah was abandoned. The rush for black gold in the capital city of Baku was so intense that the air had become fetid, unbreathable. Exploitation of hydrocarbon resources had begun to transform the human experience. Greedy men hearing wild tales of fortune were attracted to Baku. Some said that, offshore from the distant Muslim city, the waters of the Caspian Sea can catch fire when enormous bubbles of gas capable of overturning boats rise to the surface. These fires erupting from the sea have, moreover, the fascinating property of being consumed while emitting an imperceptible heat. The oil kingpin of Baku was Ludvig Nobel, brother of Alfred Nobel, the inventor of dynamite and creator of the famous prize. One day the wealthy Swedish engineer crossed, unscathed, through one of these walls of fire in his steam-powered yacht.²

Shortly before the First World War, the region of Baku became, for a time, the main source of black gold for all of humanity. The wells drilled around its natural outcrops of naphtha produced more than half of the world’s crude oil. On a 1919 stamp printed by the ephemeral Republic of Azerbaijan, subsequently conquered by the Red Army and assimilated into the Soviet Union, the Baku Fire Temple appears. Behind it, five strange pyramids—oil derricks.

After a century of intense exploitation, the oil reserves dried up; the eternal fire of Ateshgah stopped burning in 1969.³ Today, the flame is rekindled for tourists using a pipeline that transports gas tapped further and further out to sea. Decade after decade, both Soviet and Western corporations have had to move their rigs, to drill ever deeper wells more distant from the shores of the closed Caspian Sea. Since 2011, despite recent titanic efforts, the production of offshore platforms is slowing in Azerbaijan, maybe irreversibly so.⁴

Around the temple of fire a few rusty pumps remain, often immobile, frozen in time. Between them snakes the highway to the airport.

A Massive Stock of Vital Energy, Transformed

Oil began to form on Earth more than a billion years ago. Its arrival coincided with the explosion of complex cell life in the oceans. In all their forms, from the heaviest (bitumens) to the lightest (natural gas) to conventional liquid oil, hydrocarbons are fossils: They originate from decomposed organisms, compressed and heated in the depths of sedimentary layers throughout geological eras, all around the planet. Unlike coal, which is formed from decayed plants (wood, leaves, seeds, and the like), hydrocarbons come from tiny marine organisms deposited on the seabed. These fossil energies are solar energy metabolized by photosynthesis and then stored for eons in the Earth’s crust.

More than half of the oil exploited today formed one hundred million to two hundred million years ago during the Jurassic and Cretaceous—the time of the dinosaurs.a During these periods, tectonic forces gradually raised the oceans more than 200 meters above their current levels. The continents were invaded by water. The shores hosted environments favorable to the development of phytoplankton, then to the accumulation of its debris in the sediment of shallow, calm, warm seas, and lagoons. The phenomenon was particularly widespread along the banks of the Tethys, a great ocean of this era, which separated the paleocontinents from Laurasia to the north (which would form North America, Europe, and Asia) and Gondwana to the south (South America, Africa, India, Antarctica, Australia). It is there, on the shores of the ancient Tethys, that most of the giant oil deposits were discovered, spanning from the Middle East to Mexico in a path traveling through North Africa. Random movements of the tectonic plates over millions of years created the borders that unite and divide the nations of the Oil Age.

The concentration of carbon dioxide in the atmosphere was much higher than it is today, as was the average atmospheric temperature (which likely reached 20°C [68°F], compared with 14.6°C [58.28°F] in 2012). During these intensely hot and humid periods, it would probably have been possible to swim at the South Pole. The microscopic life-forms that became petroleum accumulated in the sediment because, contrary to the fate usually reserved for dead organisms, they lacked the oxygen needed for decomposition. Hundreds of millions of tons of plankton, asphyxiated, subsequently transformed into petroleum. According to a hypothesis formulated by several paleoclimatologists, it is possible that the current greenhouse gas effect could lead to such anoxic conditions.

An irony of history? If we continue on the current path, humankind could release enough carbon dioxide into the atmosphere to raise its temperature more than 6°C (10.8°F) by the next century. By consuming fossil fuels, we have initiated a phenomenon capable of bringing temperatures back to the level of one hundred million years ago, when a fantastic accumulation of marine-life debris spurred the formation of petroleum.

In just a century and a half of industrial development, humankind has pumped nearly half of the Earth’s conventional crude oil, which geological evolution took tens of millions of years to produce. In so doing, it has altered the conditions for the development of life on Earth at an unprecedented pace—and probably irreversibly, on the timescale of human societies.

A Sea Soup Pressure-Cooked over Millions of Years

In order for oil to appear, a very particular concurrence of geological phenomena is necessary. The base material is kerogen, the solid organic substance that forms when anaerobic bacteria slowly decomposes plankton and other organic matter within very fine marine clay sediments. Sediment containing kerogen, which generally represents less than 5 percent of its mass, is then covered by new sedimentary layers: They are gradually buried at depths of between 2 and 10 kilometers, sometimes more. The Earth’s crust then acts as an oven: As it is buried and slowly compressed, the kerogen is cooked at temperatures ranging from 50°C to 300°C (122°F to 572°F), depending on the depth. Kerogen gradually cracks: The large organic molecules that constitute it are reduced to smaller molecules of hydrocarbons—so called because they combine hydrogen and carbon atoms. What is called crude oil is actually a mixture of different types of oils, or various hydrocarbon molecules. This mixture varies greatly from one deposit to another and, to a lesser extent, within the same deposit. The purity of the mixture is frequently impaired by the presence of sulfur from volcanic activity. The more violent and intense the thermal cracking of kerogen, the smaller the hydrocarbon molecules become. Oils are formed, either heavy and viscous or fluid and light. When there are fewer than five carbon atoms per molecule, natural gas is produced. Rock that contains kerogen is called bedrock. Hydrocarbons that form there are pushed toward the surface by strong pressure from below—rising above the more dense groundwater and seeping out through permeable rocks. But in order for a field of oil or gas to form, somewhere above the bedrock there must be an impermeable layer of rock capable of sealing the hydrocarbons under a subterranean fold known as an anticline, or under a fault trap. Below this barrier, oil and natural gas concentrate in the interstices of a porous and highly permeable rock (usually sandstone or limestone) that petroleum geologists refer to as a reservoir. If the impermeable layer, usually consisting of clay or salt, is absent, the hydrocarbons slowly reach the surface. There, the lightest evaporate and the heaviest degrade to form bitumen.⁵

The simplest hydrocarbons, such as methane, are among the very first molecules spontaneously formed in the interstellar vacuum of supernovas, thanks to gravity. Under high pressure, in terrestrial rock soup, a phenomenal diversity of mixtures of naphthenic, formic, or asphaltic hydrocarbons emerges: essentially alkanes (such as methane, ethane, propane, butane, pentane, octane, and pentacontane), capable of supplying an almost infinite variety of saturated, unsaturated, cyclic, aromatic, alkene, and alkyne molecules; or even simple and complex alcohols, such as methylene, ethylene, benzene, butadiene, propylene, glycerol, acetone, toluene, polyamide, phenol, polyurethane, and the like. By simple distillation followed by fractionation; by cracking, oxidation, hydrogenation, reforming, or visbreaking; by assembling monomers into polymeric macromolecules, an incredibly diverse and precious array of products can be offered to technical humanity, forming the crux of the industrial era’s pivotal advances and mass consumption.

Build, Coat, Lubricate, Heal, Burn: Since the Dawn of Civilization

In The Epic of Gilgamesh, one of the earliest known literary works, the protagonist, who resembles the Bible’s Noah, uses 18,000 liters of bitumen to make his ark watertight.⁶ It is written in Genesis that, after the flood, Noah’s descendants had access to bitumen to erect the Tower of Babel: They said one to another, ‘Come! Let us make bricks and bake them in the fire!’ The brick served as stones and the bitumen was used for mortar. They said, ‘Come! Let us build a city and a tower whose summit penetrates the heavens! Let us make a name and not be scattered all over the world.’⁷ The myth of God’s destruction of the Tower of Babel originated somewhere around the ruins of Babylon, a cradle of civilizations situated in the heart of present day Iraq, one of the largest oil producers. The Greek historian Herodotus attests to the use of hot bitumen to bind the bricks that were used to build the ancient capital of Mesopotamia: At eight days from the city of Babylon is the town of Is, situated on a small river of the same name, which flows into the Euphrates. A great quantity of bitumen was extracted from this river and used to seal the walls of Babylon.⁸ The Bible also relates how the mother of Moses coated with asphalt and pitch the basket of papyrus in which she concealed her child among the reeds of the Nile.⁹

Wherever it flourished, and long before it asserted itself as indispensable to the extraction of all other raw materials, men had discovered all sorts of uses for petroleum—a word derived from the medieval Latin petroleum, meaning rock oil. Akkadian tablets from 2200 BC refer to naptu—the source of the Arabic name for oil, naft, and the Greek one, naphtha. Ancient Egyptians seem to have used oil for the conservation of their mummies (the Arabic word mumia means bitumen).¹⁰,b The black substance outlining the eyes on Mesopotamian funerary statues was made of bitumen as well. From springs of black gold in what is now Los Angeles, the Yokuts people of California collected bitumen to caulk their canoes, and the women used it like starch to stiffen their clothes.¹¹

All around the world, the medicinal uses of rock oil are as old as they are numerous. On the island of Sumatra, oil has always been used as a compress to treat rheumatism. In the first century BC, in his Natural History, the Roman scientist Pliny the Elder evoked the therapeutic virtues of petroleum, listing naphtha deposits exploited in Mesopotamia, Judea, and Syria. In the thirteenth century Book of Marvels, the Venetian merchant traveler Marco Polo relates that, on Armenia’s northern frontier, bordering Georgia, there is a spring that gushes oil at such a rate that one hundred ships could load at once. It is not good to eat, but it burns well and is good for salving scabies on men and animals alike and for treating itching and mange on camels. Men come from far off to fetch this oil, and in all the lands around they burn no other oil than this.¹² In China, bitumen was rubbed on patients’ bodies to soothe ulcers and cure ringworm, scabies, and arrow wounds. It also was used in alchemy. A seventeenth-century Chinese text recommends ingesting oil to regrow teeth and hair.¹³ Rembrandt’s The Night Watch is actually a daytime scene: This masterpiece owes its nickname to a poorly dried coat of bitumen extracted from Judea.

Small wells flowing with petroleum are mentioned in two-thousand-year-old chronicles of the Middle Kingdom. During the centuries following, wells of 300 to 1,000 meters deep were dug in China, where buckets were lowered to the bottom. These were salt mines and the bitumen was a secondary product.¹⁴ When the Muslims conquered Mesopotamia and Persia in the year 640 AD, they found hundreds of bitumen and naphtha quarries. Bitumen’s importance was so great that as early as the ninth century, in order to control the quarries, the Abbasid caliphate appointed nafta walis, governors of oil. To one of them, a disillusioned friend one day addressed these verses: You, where is your modesty? / As if you’d been given the throne itself! / If by guarding the stinking wells / You have gained such aloofness / How would you behave if instead / You were guarding amber and musk?¹⁵

The Chinese and the Burmese were soon able to light up, using torches made of bamboo rods filled with bitumen. The Chinese and the Romans used oil to lubricate the axles of their chariots. About 1070 AD, Chinese intellectual Shen Gua described a method of making ink from the burning residue of rock oil, pronounced shiyou in Chinese.¹⁶ As early as the dawn of the Middle Ages, Baghdad’s roads were frequently covered with asphalt. (It was not until 1838 that a Parisian street was covered with asphalt for the first time).¹⁷ The Secretum Secretorum, a work attributed to Rhazes, a ninth-century Persian scholar who lived in Baghdad, confirms the likely common use of oil lamps. This book, which for Western readers became one of the most influential works of the Middle Ages, describes several methods of distilling lamp oil (naft abyad, or white oil) using an alembic, ten centuries before oil lamps illuminated the birth of industry in the West.¹⁸

From the first steps of civilization, of agriculture, and of maritime trade in Mesopotamia, the drive to control hydrocarbons—like the need to secure water access—was one of the major causes of war, because bitumen was necessary for waterproofing irrigation canals and boats.¹⁹Among all the different uses for oil, its military function became the most prominent, from China to Europe, long before the industrial era began. In 578 AD, Emperor Wu of the Northern Zhou dynasty used bitumen to set fire to the Turks’ battle gear. The grease burned intensely, even in contact with water, and saved the city of Jinquan from the attack.²⁰

Greek fire, an incendiary weapon capable of setting the sea aflame, repelled numerous naval and land offensives during the Arabs’ first siege of Constantinople, from 674 to 678 AD. An ancestor of napalm, Greek fire was launched using clay hand grenades, catapults, or flame-throwing siphons. It was manufactured in Constantinople by a special corps of closely watched workmen and masters, and only a regiment of specialized soldiers, the siphonarios, could use it. The secret of Greek fire was considered essential for the preservation of Byzantium’s precarious power. Emperor Constantine VII Porphyrogenitus, whose reign lasted from 913 to 959, thus warned his heir: You must above all things be cautious and pay close attention to the liquid fire which is launched by means of tubes; and if anyone should ask you how we make it, you must reply that this fire was shown and revealed by an angel to the great and holy first Christian emperor Constantine. One commentator made it clear: By this message and by the angel himself, he was enjoined … to prepare this fire only for Christians, only in the imperial city, and never elsewhere.²¹ In 1204, during the fourth crusade, Constantinople was sacked by Frankish crusaders led by the Christian Venetian fleet, and the secret of Greek fire spread throughout the Latin world.²²

The Byzantines, however, were not the only people in the East who knew how to use oil to make war. As early as the middle of the ninth century, the caliphate of Baghdad instituted a regiment of incendiary soldiers, the naffatun. In 1168, when Amalric I, king of Jerusalem, besieged Cairo, the Fatimid vizier of Egypt ordered the evacuation of the city before burning it with 20,000 pots of naphtha and 10,000 lightning bombs. The fire burned for 54 days.²³ John de Joinville, who accompanied Saint Louis in the seventh crusade, wrote in his memoirs that the Greek fire used by the Saracens seemed like a dragon flying through the air.²⁴

Toward Industry

Whether used for lubrication, for lighting, as a remedy, or as a weapon, oil subsequently never ceased to be exploited in a fairly rudimentary and limited way, from the Chinese province of Shannxi to Bavaria, throughout Burma, Baku, Baghdad, and Mosul, in Romania, Galicia, Sicily, and the Po Valley. In China, it was used to lubricate the workings of proto-industrial machinery: mechanical hammers driven by water mills, for example.²⁵ In France, in 1734, tests were carried out on the distillation of crude oil collected on the site of a very old natural geyser, Pechelbronn’s fontaine de poix, or fountain of pitch, in northern Alsace. Eleven years later, King Louis XV authorized the sale of fats, oils and other goods extracted from the Pechelbronn asphalt mine.²⁶ In Baku, once scooped or sponged up with coarse fabrics, oil was transferred to goatskin bags that were loaded onto the backs of camels, and transported far away in caravans. At the beginning of the nineteenth century, this city on the banks of the Caspian Sea had more than one hundred bitumen quarries. From the 1830s on, in Baku, Galicia, and elsewhere in Europe, small refinery workshops multiplied, supplying paraffin, vaseline, oils, and solvents.

Little by little, the first industrial uses of petroleum appeared. The new machines demanded all kinds of lubricants, and oil refining offered an almost unlimited range: from thick fats for locomotives to the lightest oils for watches.c Collected at the edge of the Dead Sea, the bitumen of Judea, which had the property of hardening when exposed to light, was the secret ingredient of the daguerreotype, invented by Nicéphore Niépce around 1826. He had the idea of using it to coat the tin plates that became the precursor to modern photographic film. Paraffin from petroleum was well suited to making candles, and could be used as a coating to preserve meat, offering an alternative to tallow and other animal fats. Most important of all, a lightweight oil that burned with a soft, strong light appeared in drugstores in major European cities. They called it lamp oil.

Since the earliest days of the industrial revolution, the mysterious question of oil’s origin has divided the best scientists. The illustrious Russian intellectual Mikhail Lomonosov was considered the first to have formulated, in 1757, the idea that petroleum had biological origins. Many great nineteenth-century scientists espoused the theory that hydrocarbons had mineral, or abiotic, origins, believing they were generated in the very heart of the terrestrial mantle. Among them were the French chemists Berthelot and Gay-Lussac, the German von Humboldt, and the Russian Dmitri Mendeleev, the father of the periodic table of elements. Now discredited, the abiotic hypothesis persisted, especially in the Soviet Union, where it became the official theory in the aftermath of the Second World War, when fear of scarcity drove the Kremlin to launch immense prospecting efforts. This abiotic theory continues today with the recurrent myth of an inexhaustible oil supply, perpetually reconstituting itself in the depths of the Earth.

Samuel Kier’s Magic Liquid

Today, no trace remains of the first oil rush that exploited and exhausted the supply found in the beautiful, wooded hills of Pennsylvania. In the northeastern United States, south of the great Lake Erie, many have forgotten that their now sleepy valleys, located midway between Pittsburgh and Cleveland on an 80 kilometer strip at the foot of the Appalachian Mountains, were for a long time called the oil region, a fiery melting pot of the American oil industry. Since the late 2000s, however, Pennsylvania has been the epicenter of what some call a fossil fuel renaissance, which may prove to be one of the ultimate oil rushes: this time, in pursuit of shale gas and oil.

Samuel Kier was an enterprising man full of candor and instinct. With his good-humored air and frank, almost childish looks, he succeeded in seizing many opportunities offered to the pioneers of American capitalism in the mid-nineteenth century. He was born in Pennsylvania in 1813, to a family of Scottish and Irish immigrants who worked in small salt mines. In 1838, Samuel Kier founded a river company that transported coal from Pittsburgh to Philadelphia. His associate in that endeavor was James Buchanan, who became the fifteenth American president—Abraham Lincoln’s predecessor to the White House. Kier also invested in several foundries, but it was the family salt mines that ensured his fortune. It was during the 1830s that the salt-mining technique used in China for more than one thousand years arrived in Europe and then in the United States. The West copied and, importantly, added steam power when mimicking the Chinese extraction process. In 1847, Kier and his father launched new drilling operations in Tarentum, Pennsylvania, near the Allegheny River. But the brine extracted from these new wells was polluted by a blackish, foul-smelling liquid. The salt miners did not know what to make of this oil, and often just poured it into the river.

In 1848, an apothecary sold Samuel Kier’s wife an American medicinal oil, a rock oil from Kentucky, to treat her tuberculosis. When Samuel realized that it was the same oil that flowed from his salt mines, he decided to bottle his own. He hired traveling merchants to crisscross the region on gaudy wagons, selling a quarter of a liter of crude oil for 50 cents. These phony doctors presented Kier’s Petroleum, extracted from four hundred feet below the earth’s surface, as a panacea that could be ingested or applied as an ointment, able to heal (according to an advertisement that Kier printed on a fake bank note) liver disease, bronchitis, gout, and even blindness. Another advertisement extolled the miracle oil in this little quatrain: The healthful balm, from nature’s secret spring / The bloom of health and life to man will bring / As from her depths the magic liquid flows / To calm our sufferings and assuage our woes.²⁷

Despite the fact that his rock oil cost nothing to extract, Kier failed to make a satisfactory profit. He sold his carts, and in 1849 had the idea of sending a sample of his oil to a Philadelphia chemist named James Booth. Booth recommended that it be distilled to obtain a precious solvent for preparing latex. In 1850, Kier set up the first petroleum distillation plant to the west of the Atlantic, in Pittsburgh. Through trial and error, he succeeded in producing lamp oil, which was quite nauseating and emitted a lot of smoke. He gradually improved the process, and in 1851 began to sell his carbon oil to coal miners in Pittsburgh, along with lamps that he manufactured. Kier earned considerable wealth but never obtained a patent. James Booth wrote to him later: We missed it by letting this thing slip.²⁸

During the 1850s, following Samuel Kier’s lead, dozens of distillation workshops were set up in Pittsburgh, New York, and Boston. They produced tens of thousands of liters of lamp oil every day. In a patent filed in 1854 in New York by Abraham Gesner, an opportunistic Canadian entrepreneur, white oil—so called because of its transparency, and known throughout Islam since the early Middle Ages—earned its English name, kerosene. Meanwhile, the seeds of the petroleum industry continued to grow in Europe. In 1857, in Ploiesti, Romania, the first major oil-refining plant was opened. The following year, a thousand lanterns illuminated the streets of Bucharest.

1859: Colonel Drake Sparks the First Black Gold Rush

1859 is considered year zero for the petroleum industry. Indeed, late in the afternoon on Saturday, August 27 of that year, on the banks of a small Pennsylvania river, after months of effort and many tribulations, a fake American Army colonel named Edwin Drake managed to raise crude oil from a drilling depth of 21 meters. The following day, Drake received a previously drafted order to stop drilling. It was issued by the banker who gave him the false, reputation-boosting title of colonel. Short of money, James Townsend had abandoned all hope of success.

Drake’s operation, undertaken with the help of salt-mining specialist William Uncle Billy Smith, was located on an island in the middle of a small tributary of the Allegheny River known for its oily deposits: Oil Creek. The well was nicknamed Drake’s Folly by local loggers who were skeptical of its potential. A small wooden derrick supported a percussion drill; the idea was simply to ram a heavy piece of metal into the ground, powered by a wood-fired steam motor. (Rotary boreholes existed in Europe for water wells but were only later used for oil wells).

As an occasional train conductor and jack of all trades, Edwin Drake was on the cutting edge of modernity, well aware of the era’s latest technology. He was hired by a visionary, polyglot entrepreneur, George Bissell, himself advised by Benjamin Silliman Jr., a chemist from prestigious Yale University, who confirmed what other chemists had already determined before him: that it was possible to distill crude oil to extract a large number of precious products.

Colonel Drake, with his top hat, his long beard, and his solemn, determined demeanor, is still heralded as the great pioneer, the authentic father of petroleum exploitation, the first to have succeeded in drilling a well and extracting oil from it. However, Russian and Azeri historians dispute this claim, citing another 21-meter-deep well drilled in Baku in 1846, thirteen years before Drake’s. Launched at the behest of Vasiliy Semyonov, an advisor to the council of the Central Administrative Committee of the territory of Transcaucasia, that well was drilled under the direction of Major Alekseyev, an officer to the tsar, who supervised the many oil pits on the shores of the Caspian Sea.²⁹ Major Alekseyev used a percussion drill, driven not by steam but by the force of eight men who pulled on a cable suspended 10 meters high with a tripod.³⁰ During the same time period, around 1850, Samuel Kier was already operating his wells and refining oil in Pittsburgh. In 1858, in Ontario, Canada (one year before Drake’s drilling), James Miller Williams, who ran a bitumen quarry, drilled a well in search of water during a drought. Oil bubbled up.³¹ Perhaps the black gold industry, long dominated by Americans, was reluctant to attribute its paternity to the Russians, a Canadian, or a medicine man associated with a US president who was unable to prevent the coming Civil War (and who is still considered, along with George W. Bush and Donald Trump, to be one of the most incompetent figures ever to occupy the White House).d

The exploitation of shale gas also reaches far back in time, particularly in the Appalachians, where it is almost as old as the coal industry but infinitely more modest. As early as 1825, in the village of Fredonia, near Lake Erie, natural gas was captured from shallow crevices and conveyed by a wooden pipe to illuminate a few streets. In 1857, an entrepreneur named Preston Barmore drilled a well about 30 meters deep in search of shale gas. Failing to obtain a satisfactory flow, he sent gunpowder down to the bottom of his well and made it explode with a metal bar heated to white: His fracturing technique proved to be modestly effective, a century and a half before the current boom in shale gas and oil.³²

Perhaps his was not the first oil well of the industrial era, but Edwin Drake’s drilling certainly initiated the first oil rush. This formative event occurred just ten years after the great California Gold Rush of 1849. Mark Twain, the period’s most iconic American writer, saw it as a crucial moment in American history, the watershed event that sanctified a new money worship and debased the country’s founding ideals.³³ The news that it was possible to extract rock oil in large quantities attracted a flood of prospectors to the Oil Creek Valley in the weeks that followed. The derricks began to grow like mushrooms in the rain.

Oil Saves the Whales and Births an Industry Synergized with War

There was no source of lubricant and lighting abundant enough to meet new and ever-increasing needs. At the dawn of the US oil industry, whale oil was the most sought-after source for candles and lamps, street lights, and the lubrication of all sorts of mechanisms. Spermaceti in particular, a fine oil extracted from the head of the sperm whale, was considered the oil of the kings. It garnered the highest price of any oil, and whalers—from the French of Le Havre to the Americans of New Bedford—scoured the globe for it. It was for this oil that the Pequod’s sailors chased Moby Dick, the white sperm whale, in Herman Melville’s 1851 novel. A century later, after industrial civilization had been launched, Starbuck, Captain Ahab’s wise first mate, declared in the movie adaptation of Moby Dick: It is our task in life to kill whales, to furnish oil for the lamps of the world. If we perform that task well and faithfully, we do a service to mankind that pleases Almighty God.³⁴

The emergence of the petroleum industry undoubtedly saved the sperm whales, seals, elephant seals, and other marine mammals hunted for their fats. The whalers had been forced to travel farther and farther toward the poles, in search of an ever-decreasing number of animals. In the United States, the whaling fleet reached its peak in 1846 and then began shrinking, about the same time that the production of whale and sperm whale oil declined.³⁵ The Pennsylvania oil rush accelerated the changeover from whale oil to petroleum. With luck and endless toil, whalers could extract up to 2,000 liters of spermaceti from the enormous skull of a sperm whale; meanwhile, 3,000 liters of crude oil rose daily from Edwin Drake’s well. A drawing published in 1861 in Vanity Fair magazine depicted a grand ball given by the whales in honor of the discovery of the oil wells in Pennsylvania.³⁶

The American Civil War caused tremendous upheaval. It allowed the American petroleum industry to profit from rapid distribution. The US population was only thirty million at that time. The new industries of the north prospered with Appalachian coal. The southern slave states, which seceded after the election of abolitionist president Abraham Lincoln in November 1860, hoped that the European powers would wind up on their side due to heavy dependence on king cotton, an industry built upon the work of black slaves. This was not the case, and it was an even more powerful king that triumphed over the Confederate army: the king coal of the northern states.

From April 1861 to May 1865, the Civil War greatly stimulated the production of kerosene, allowing it to advance unchallenged by competing products. Troops requisitioned, immobilized, or destroyed most of the whaling fleet. The war interrupted deliveries of turpentine (or pitch), oily pulp from pines and other resinous trees from the southern states. At that time, the essence of turpentine was used, like oil, to clean the wounds of the injured, and as a cheap and odorous illuminant called camphrene in the United States. Turpentine also produced a substance similar to the rosin used by violinists, which was used to lubricate the wheels and other parts of cars.³⁷ Rather cheap, this vegetable fat was probably, before oil arrived, the form of lubricant that offered the best value for the price, better than tallow—the fat of sheep or beef—or marine mammals.³⁸

The American Civil War was the first mechanized conflict. It primed the pump for amassing the fortunes of those who refined lubricants and solvents destined for armament factories, railways, artillery equipment, or the wheels of the first armored warships. In February 1865, at the Battle of Wilmington, North Carolina, in which the last deep-water port controlled by the Confederates fell, the northern army was able to rain down a hundred shells per minute.

With the war barely over, many were already aware of the transformation that this black liquid was causing. An American journalist described it: From Maine to California it lights our dwellings, lubricates our machinery, and is indispensable in numerous departments of arts, manufactures and domestic life. To be deprived of it now would be setting us back a whole cycle of civilization. To doubt the increased sphere of its usefulness would be to lack faith in the progress of the world.³⁹ As early as 1865 Congressman James Garfield, future twentieth president of the United States, had already stated, Oil, not cotton, is King now in the world of commerce.⁴⁰

First Wild Tremors

It often happens that oil is discovered in inhospitable territories, far from settled territory, and so the new cycle of civilization began in desolate places. Photographs taken at that time in the Oil Creek region, where a year after Edwin Drake’s success seventy-five wells already had been drilled, suggest a universe of anarchy and filth.⁴¹ The razed forests gave way to wooden derricks often erected so close together that they were almost touching, on bare hillsides and shapeless terrain, through which muddy water flowed. Emissions often made the air suffocating. Distillation residues that no one knew what do with (for example, gasoline, unnecessary before the invention of the combustion engine) soaked the soil and ended up in rivers by the millions of liters. Drivers of steam ships sailing the Cuyahoga River from the oil region to Cleveland avoided throwing hot coal overboard for fear of the water catching fire.⁴²

These were dangerous places: Drake’s well was destroyed by fire a few weeks after its opening, in autumn 1859. In 1861, just one week after the Civil War began, the first gusher (a well in which the pressure is so strong that crude oil spouts out like a gigantic fountain) ignited and killed nineteen people. Fortune closely followed death: Within three days after the fire was extinguished, the gusher ejected an unbelievable quantity of crude oil: three thousand barrels per day (the 159-liter wooden barrels in Pennsylvania and beyond set the standard unit of measure for crude oil production still in use today).⁴³ During the years of frenzied civil war, so many fires occurred in the wells and rudimentary refineries around Oil Creek that producers posted signs warning: Smokers Will Be Shot.⁴⁴

With the advent of the new oil discoveries, towns began to pop up almost overnight—Oil City, Oleopolis, Pithole, and more—attracting crooks, prostitutes, and liquor salesmen. Then when the wells dried up, these became ghost towns almost overnight. The many Civil War veterans who came to seek their fortune in these cities were not necessarily out of their element: The whole place smells like a corps of soldiers when they have the diarrhoea, noted a visitor to Pithole.⁴⁵ The town existed for a little over a year, from the success of the first boreholes in January 1865, to the exhaustion of the principal wells in January 1866. Between these two dates, Pithole had time to accumulate up to twenty thousand residents, two banks, two telegraph offices, a newspaper, and more than fifty hotels (including an unknown number of brothels). Once the prospectors had gone, the surrounding plots, which had once changed hands several times a week for more than $1 million, were sold for less than $5.

Even more than the gold market, the petroleum market was subjected from its beginning to an abrupt succession of overproduction and shortage cycles, devastating for producers and, in turn, for their customers. Edwin Drake himself was ruined after making some risky investments. When in September of 1861 an explosively prolific new gusher, dubbed the Empire Well, entered production, the price of a barrel of oil fell to only 10 cents. This was cheaper than water, although shippers continued to charge $3.00 per barrel to transport it. During the last months of the Civil War, the price of a barrel reached $12.00, and then fell to less than $2.50.

Against these formidable odds, a young accountant, as sharp as he was ambitious, quickly honed his method and hitched his harness to the wild, emerging power of oil.

a Sixty-five million years ago, the impact of the asteroid responsible for the dinosaurs’ extinction contributed to the formation of the Cantarell oil field, off the coast of Mexico—one of the largest in the world, and among those that is quickly depleting today.

b Buffon reports that the ambassador of Persia offered mummy balm or mumia to King Louis XIV who kept it in his cabinet inside two boxes of gold. The French naturalist noted: This balm was only bitumen, and had merit only in the spirit of those who offered it (Georges-Louis Leclerc de Buffon, natural history, Œuvres Complètes de Buffon, vol III, Rapet and Cie, Paris, 1818, p. 204).

c It took a long time before these fine oils seriously competed with vegetable oils, when fractional distillation became commonplace.

d The case of Samuel Kier was downplayed by the celebrated hagiographer of oilmen, Daniel Yergin, an American historian closely linked to the black gold industry. Yergin is the author of the 1991 book The Prize. This colossal and valuable history of oil, by far the most cited in this domain, is also a textbook case of a story told exclusively from the winner’s perspective. Yet it was nevertheless by seeing the drilling rigs depicted on an ad boasting about the virtues of Samuel Kier’s rock oil that George Bissell imagined his project, and it was in Tarentum, where Kier had long been collecting his crude oil, that Edwin Drake went to observe drilling technology. (See John A. Harper, Yo-Ho-Ho and a Bottle of Unrefined Complex Liquid Hydrocarbons, Pennsylvania Geology 26, no. 1, 1995, searchable at oil150.com.)

TWO

John D. Rockefeller, the Power of Petroleum, and the Spiral of Expansion

Was John D. Rockefeller Sr. a virtuoso of capitalism? Or a lone genius, like those who populate the arts? On the contrary, it seems that he was, among a thousand other cogs in the wheel, simply the one who proved to be the best-suited to harness and propel the immense force already in motion. When he arrived in the oil regions during the feverish years of miraculous profits generated by the Civil War, the man who was about to become the richest of all time appeared, instantly and in every respect, to be the perfect person in the perfect place to raise from underground the fabulous fortune that had lain dormant for millions of years, the germ of the true new world.

The creator of the oil company that is still, today, one of the richest private companies on the planet was a natural tamer of the emerging beast. Born into a German family who had arrived in the United States in the early eighteenth century, he was fully convinced that his Christian salvation was somehow responsible for the fortunes wrought by his labor. He flawlessly embodied the ideal of the pro-capitalist Protestant that sociologist Max Weber described a few years later: He believed his professional career path had been inspired by God himself.¹ But certain peculiar stigmas that Rockefeller carried with him from childhood also helped shape him into the superman of capitalism.

John Davison Rockefeller was born on July 8, 1839, in northern New York State: a remote rural setting, nevertheless quickly disrupted by the arrival of the steam engine and the bank. His mother, a devout Baptist abandoned by her husband, instilled in him a strong sense of morality. His authoritarian, charismatic father—a big drinker, a sharp shooter, a ventriloquist—was not satisfied with working among the humble pioneers of American industry. Shortly after his marriage, Bill Rockefeller ran one of the myriad small sawmills that built the United States, supplying lumber for buildings and coal mines and fueling many steam engines. But his whimsical, brutal, and secretive temperament drove him to remain, throughout his life, a fierce individualist attracted by the lawless, troubled world of the wild frontier, where he led a double life. Nicknamed Devil Bill by the townsfolk, he was charged with rape and fled to become a charlatan doctor, selling miraculous remedies to gullible peasants under the pseudonym Dr. Levingston. No one knows if the fake doctor sold vials of Kier’s Petroleum or any other form of petroleum that was then commonly found in the pharmacopoeia of itinerant healers in the northeastern United States.²

Although he did not say much about Bill Rockefeller, John D. Rockefeller idolized his lying, always-absent father. He taught me the principles and methods of business, he confided.³ Bill Rockefeller once explained to a neighbor the approach he took to educating his sons: I trade with the boys and skin ’em and I just beat ’em every time I can. I want to make ’em sharp.⁴ John, his eldest son, became the sharpest of them all.

From a Little Side Issue to Rockefeller Hegemony

John Rockefeller was not a prospector who was any happier or more skilled than other prospectors of his day. He was a wholesaler. Just twenty years old in 1859 when he established his own small trading house in Cleveland, this accountant with hollow cheeks and narrow lips had long known how to conceal his impatient desire to get rich. Cleveland, extending along the shore of Lake Erie, not far from the mines and quarries of the Appalachian Mountains, was one of the main nodes of industrialization in the United States. With his partner Maurice Clark, twelve years his senior, Rockefeller built a small warehouse from which he negotiated the purchase and sale of all kinds of high-demand products for the developing and expanding region. Grain, fish, water, lime, plaster, coarse fine solar and dairy salt, the company’s first advertisement proclaimed.⁵

Located way up in the north of the young nation, Cleveland had the advantage of being far enough away from the approaching war front but close enough to take advantage of it. In 1863, the year of the northern army’s victory at Gettysburg, John Rockefeller’s nascent fortune was already ample enough to allow him to both make his first investments in the railways and respond favorably to a proposal for a new type of business. Samuel Andrews, a penniless, self-taught chemist, asked Rockefeller and Maurice Clark to invest $4,000 in the construction of what then appeared to the two partners as a little side issue, an oil-refining workshop.⁶ Andrews, like Clark, an Englishman of humble origins, was a jack of all trades who had learned the traditional techniques of distilling animal fat and had applied that knowledge to refining oil extracted from bituminous shale (also called oil shale), already exploited at the time in Pennsylvania.⁷ Rockefeller later recounted that he had merely relied on the enthusiasm of Clark and Andrews.⁸

The intermediary position of his trading establishment shielded Rockefeller from the brutal hazards of oil extraction, and placed him in an ideal position to take advantage of it. He undoubtedly possessed a profound intuitive understanding of the physical constraints inherent in the interplay of inert masses and human masses. Unlike many of his competitors, he didn’t build his refinery in the remote forests of the oil regions. He bought land in the nearby countryside of Cleveland, on the tributary of a river that flows into Lake Erie, and near which, a few weeks later, on November 3, 1863, the first rail line connecting the city to New York was opened by a locomotive sporting Union colors.⁹

The Civil War greatly benefited Cleveland’s wholesalers, who celebrated both the closure of access to the Mississippi and other trade routes in the southern United States and the high inflation of commodity prices. The price of a barrel of oil, in particular, was soaring. With little effort, crude oil producers enjoyed brilliant profits, and the refiners’ profits were still more magnificent. The latter’s initial investments were ridiculously modest: a hearth, some recuperation barrels and, eventually, a still. It was not even necessary to buy extra fuel; the oil itself was perfectly sufficient to run the operation. Like many of his contemporaries, the pious Rockefeller perceived a clear sign of divine providence in the discovery of Pennsylvania’s oil fields: These vast stores of wealth were the … bountiful gifts of the great Creator, he declared ecstatically while taking his first steps into the budding industry.¹⁰

Rockefeller was far from being the only businessman attracted by the manna. Refineries proliferated quickly in Pittsburgh, as well as in New York, Philadelphia, and Baltimore. By the end of 1866, Cleveland alone had no fewer than fifty fairly important distilleries; the smell they exuded above the city was so foul that it spoiled beer and milk.¹¹ The United States, however immense, was still only the humble backyard of the European economy. Two-thirds of the kerosene produced in Cleveland was exported to Europe.¹² It was shipped through New York, where John then dispatched his younger brother William to invest the oil profits on Wall Street, very near the docks where the barrels arrived from Pennsylvania. No other industry was so destined to become international.

Rockefeller expanded his oil business with astonishing confidence and boldness. He constantly borrowed huge sums but always reimbursed them with interest. At twenty-five, he built Cleveland’s largest refinery, capable of processing five hundred barrels per day. Rockefeller calculated quickly and accurately.¹³ His wealth was immediately absorbed and metabolized by financial institutions in which he acquired shares very early in his career: In 1868, only twenty-nine years old, he sat on the board of a bank for the first time, the Ohio National Bank. Many other such appointments followed.¹⁴

With so many hazards and risks associated with oil fields, investing relentlessly in refineries rather than oil wells made it possible to position oneself at the true heart of the business. Rockefeller understood that the flow of black gold could be controlled not by extracting the oil, but by marketing it and reducing transport costs as much as possible. In the spring of 1868, he entered into a secret agreement with railway magnate Jay Gould to finance the first-ever large, short-distance pipeline system serving the Oil Creek wells. In return, he enjoyed a discount of no less than 75 percent on