Crude

by Sonia Shah

  When the war was over, the U.S. government sold its chemicals plants back to the oil and petrochemicals industry for a fraction of their cost. Exxon nabbed a $2 million petrochemicals plant for a mere $325,000. Monsanto acquired one that cost over $19 million for $10 million. DuPont got a $38 million facility for $13 million. Off to a running start, refineries and petrochemicals companies “were now ready to supply copious amounts of petrochemicals,” writes historian Peter H. Spitz, serving “pent-up consumer demand for products that could be made from these materials.”43

  The United States, with seemingly plentiful oil in Texas, Oklahoma, California, and elsewhere, had little need, at first, to plunder foreign lands for its black gold. But many fields were rapidly exhausted as the Second World War exerted its heavy demands on the industry. The technology that would allow the industry to sniff out deeper, more hidden oil reservoirs had yet to be developed. By the end of 1943, Secretary of the Interior Harold Ickes was sure the United States stood on the brink of an oil famine. “If there should be a World War III it would have to be fought with someone else’s petroleum, because the United States wouldn’t have it,” he wrote, warning that “America’s crown, symbolizing supremacy as the oil empire of the world, is sliding down over one eye.”

  Ickes insisted that “we should have available oil in different parts of the world,” and “the time to get going is now.” No matter how generous domestic oil reserves may have been, controlling the giant foreign oilfields that other countries would have to rely on could only elevate the United States’ strategic power. After all, with more and more sectors of the economy reliant on oil, military prowess dependent on its riches, and popular support contingent upon a growing economy, securing access to oil was crucial to maintaining power. In 1944, then-President Roosevelt staked America’s claim to the Middle East’s oil. Arrangements were duly made with the British. “Roosevelt showed the [British] ambassador a rough sketch he had made of the Middle East. Persian oil, he told the ambassador, is yours. We share the oil of Iraq and Kuwait. As for Saudi Arabian oil, it’s ours,” as historian Daniel Yergin described the exchange.44

  Elites in Western countries had been helping themselves to slaves, silk, spices, and other goods from less powerful regions of the world for centuries, from the Niger Delta to the Indian subcontinent. Oil would be no different.

  In 1946, a Justice Department investigation found General Motors, Standard, Firestone and other oil, auto, and rubber companies guilty of attempting to control public transportation. But the miniscule fines levied against the auto and oil industries were nothing compared to the grand upheaval they had effected. By the 1950s, the electric trolley system of public transportation had been effectively dismantled. The abandoned trolleys rusted in Los Angeles’ vacant lots, where homeless scavengers turned them into impromptu shelters. Commuters would have to either take the bus or buy a car.45

  While the oil industry was swept up with increased demand, basking in its ability to create ever more products and dominate a wide variety of markets, the coal industry was mired in conflict. Exploited coal miners had been rising up in anguish. Between 1929 and 1954, the U.S. coal mining industry lost 5 million worker-days to strikes every single year. And for every interruption in the coal supply, fed-up factory managers would invest in the switch to reliable oil.46

  The black environs of London, the coal capital of the world, had become murderous. Although the moths could perhaps adapt—the peppered moth famously turned black so it could blend in with London’s dark, lichen-stripped trees47—the people, increasingly, could not. On December 4, 1952, the wind sweeping through London died down and a warm humid layer of air descended on the city. The 1,000 tons of smoke particles, 2,000 tons of carbon dioxide, 140 tons of hydrochloric acid, and 370 tons of sulfur dioxide that Londoners’ coal fires had pumped into the air that day were trapped over the city. Five still, windless days followed, and the stagnant 30-kilometer cloud of smog smothering the city turned amber, then green, then brown, and finally black. The sulfur dioxide reacted with sooty water droplets in the air to form a soup as acidic as battery acid, which scraped Londoners’ throats, unleashing a torrent of mucous and inflammation. Many didn’t make it to the overflowing hospitals, but collapsed in the street, blinded by the black fog. Fifty corpses littered a single city park, and the undertakers started to run out of caskets. When the smog finally lifted a week later, over 4,000 had perished.48

  Before the war, coal accounted for about half of U.S. energy use; by 1955, it was responsible for less than a third. By 1956, even the city of London banned coal fires.49

  It took less than a century for oil to eclipse coal, following the arc of oil-rich America’s eclipse of coal-rich Britain. It wasn’t just that oil was so powerful and versatile it could be used for everything from lighting lamps and powering vehicles to making clothes. It was also that the riches that could be earned by its extraction triggered intense competition between profit-seeking companies. The more precious oil became, because of geological depletion or because access to its reserves was cut off, the farther the industry’s operations would reach, and the hungrier these big companies would be for sales to sustain themselves. And so, oil companies penetrated one market after another, in some cases endeavoring to manufacture new markets, helped all along by the nations whom their black gold showered with war-making prowess.

  Coal continued to be burned, of course: over a billion tons of it in 2001 America alone, mostly for electricity. But it would no longer be smoking away in front of people’s faces. Instead of hundreds of thousands of little fires, the industry would burn a handful of gigantic bonfires, transforming coal’s dirty energy into likable electrons before piping it into people’s homes. During the coal era, the typical American family would shovel about three hundred pounds of coal into their stoves every week. Now the stuff they would pump into their machines would be fluid.50

  CHAPTER TWO

  Exile from Tethys

  AFTER THE SECOND World War, with the spoils of war divvied up among the victors, the countries of the West started a happy expansion. Oil-engorged and stable, the economies of Europe and the United States boomed during the 1950s and 1960s, and fed on the petrofuels, technologies, and products forged during the war.

  Since the embarrassment of the First World War, when America’s trucks had to be ferried by trains because of the nation’s pathetically rutted roads, the oil industry had partnered with automakers to lobby for a network of smooth black asphalt criss-crossing the country on which their war-winning cars could ramble. In 1956, while the last coal fire was stubbed out in London, their lobbying finally paid off. The U.S. Congress earmarked over $26 billion for the National Interstate and Defense Highway System Act, setting off a fit of road-building that would profoundly alter the country.

  American families and industries used the smooth roads and their new automobiles to drive themselves away from the congested cities. Between 1950 and 1990, suburban sprawl had become so intense that some areas were gobbling up land four times faster than their populations grew.1 The new suburban nation survived by virtue of a web of asphalt and a river of oil, allowing them to access food, fuel, and labor from the distant homes in which they had cocooned themselves.

  Like the horse before it, the car became a kind of much-needed, beloved pet. Gallons of ink were spilled describing the love affair between Americans and their cars, a romance the auto industry spent billions advertising. From 1957’s publication of Jack Kerouac’s classic novel about hitchhiking, On the Road, to drive-in movies and hot-rodding, Americans of all stripes embraced car culture. In 1955, more than 50 million cars were registered in the United States; twenty years later, over 100 million were on the books.2

  By the 1950s, the synthesis of ammonia used for nitrogen fertilizers by Standard Oil and Shell, among others, was growing exponentially. German chemist Fritz Haber had discovered how to use petroleum’s power to make ammonia back in 1909, effectively unlocking nature’s restraint o
n plant growth. Before Haber, plants relied on about one hundred genera of bacteria to capture the nitrogen essential for their development. Employing methane to create extreme heat (up to 600 degrees Celsius) and intense pressure (equivalent to being submerged under about six thousand feet of water), Haber transformed nitrogen from the air into NH3, ammonia, which could be used to make nitrogen fertilizers. Petroleum had allowed Haber to capture the Holy Grail of inorganic chemistry, something that had eluded chemists for more than a hundred years.3

  The result out in the fields was remarkable. Agricultural yields doubled between 1947 and 1979, and the global population of humans skyrocketed. Before nitrogen fertilizers, there were fewer than 2 billion humans on the planet. By 1979, there were well over 4 billion. Without nitrogen fertilizer, geographer Vaclav Smil calculates, about two-fifths of today’s 6 billion souls would not be alive. “Never before have so many people—be it in absolute or in relative terms—enjoyed such an abundant supply of food,” Smil writes.4

  As the fertilized crops grew copiously, so did the farm operations that harvested them. Big mechanized farms were hooked on oil not only for the fertilizers and pesticides that produced their super-sized crops but also for the machines that would harvest them and the oil-fired transport that would speed the crops to distant markets.

  Meanwhile, plastic was becoming the most used material in the world, found in everything from space ships, garbage bags, children’s toys, prosthetic limbs, and X-ray equipment to nylon stockings, acrylic sweaters, Teflon pots and pans, vinyl floors, Velcro closures, life jackets, glossy paper, and printing ink.5 The natural plastics, those quaint wooden, shell, and cotton objects, were demoted to mere artifacts, the last vestige of celluloid’s heyday hanging on in the lowly Ping-Pong ball, quite possibly the only object whose market the synthetic plastics industry still hasn’t been able to overwhelm.6

  Plastic penetrated every sector of the economy, touting itself as the very stuff of life; the word itself summoned up the future, as Dustin Hoffman’s character in the 1967 film The Graduate was famously told. It was true, to an extent. What else could possibly be used for airplane windows or football helmets or surgical gloves?

  In the heart of the oil business, tucked away in Shell’s petroleum research lab in Houston, a crotchety geologist, calculator in hand, dropped a bomb on the party. In 1956, geophysicist M. King Hubbert announced that, according to his calculations, the seemingly bountiful flow of oil from Texas and Oklahoma, along with the rest of the country’s oil territories, would reach its zenith by the early 1970s, after which it would start to decline. No matter where they looked for more oil, no matter how heroically they pumped it out, whatever oil was under U.S. soil had already been found and half or so would be gone within fifteen years, Hubbert proclaimed. The bosses were not happy, recalls Kenneth Deffeyes, who shared a lab with the “curmudgeonly” Hubbert. “Shell hated it! ” said Deffeyes. “Right down to fifteen minutes before he gave his talk, the head office of Shell was on the phone saying, ‘Don’t do it, don’t do it!’” It didn’t matter at the time, anyway. With the oil party in full swing, nobody believed Hubbert’s gloomy prognostications.7

  While increasingly comfortable middle classes enjoyed oil’s bounty in the West, the people at the other end of the bulging pipelines and well-trammeled tanker lanes remained mired in dispossession and conflict. When Britain pulled out of colonial Palestine in 1948, it had handed power over much of the country to the minority Jewish population, increasing their share of the country’s territory from 6 percent to 56 percent. The neighboring Arab states never agreed to the UN-sanctioned deal, and fighting commenced almost immediately.8

  The Western oil companies continued to exploit Middle Eastern oil assets the way any private, for-profit company would: to maximize profit. The situation in Iran typified the situation. BP and the British government both raked in more money from the extraction of Iran’s oil than the Iranian government. BP’s margin on Iranian oil was so good it was able to earn 250 million pounds in profit between 1945 and 1950. The Iranian government earned just a fraction of that, 90 million pounds, from royalties.9

  Amidst heightened conflict at home and seemingly insatiable Western thirst for crude, it started to dawn on many in the oil-producing countries that the oil that coursed under their feet might properly be considered their national heritage, which could be developed for the good of society and its future generations instead of a foreign company’s bottom line. In 1956, Egyptian president Gamal Abdel Nasser, fed up with “the great capitalist monopolies in the advanced developed countries” that “rel[ied] on the exploitation of the sources of wealth in the colonies,”10 took over the hundred-mile-long Suez canal that coursed through the Egyptian desert, through which two-thirds of Europe’s oil was ferried on tankers.11 Nasser promised more to come. “I see the Iraqi people in shackles, facing fire and steel,” he thundered. “We shall all defend our freedom and Arabism . . . and work until the Arab nation extends from the Atlantic Ocean to the Arab Gulf.”12

  Barred from the narrow Suez, which slashed the journey from the Persian Gulf to Europe almost by half, wary oil companies turned instead to the longer journey that avoided the canal. They wouldn’t be able to afford as many trips. The tankers carrying the oil would have to be huge.13 (In time, the tankers would grow so large that many wouldn’t be able to pass through the Suez’s constricted passages at all, even if they had wanted to.)

  From there, things went from bad to worse. In 1960, the death knell for the early oil industry tolled. The Organization of Petroleum Exporting Countries (OPEC) was formed, a cartel that today includes Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela.14 One by one, OPEC countries kicked Western companies out, taking over their assets and declaring their country’s oil the sole province of state-run companies, to be developed at a rate dictated by the logic of governance—or at least the self-interest of ruling elites—not Western profit-making.

  The Western oilmen abandoned their suburbs in the Arabian sands and went home, angrily. The abundant oilfields holding up to two-thirds of the world’s oil percolated underneath these countries.15 Oil historian Daniel Yergin gives eloquent voice to their rage:They had created value where there was none. They needed to be compensated for the risks they had taken—and the dry holes they had drilled. They believed that they were being put upon by greedy, rapacious, and unreliable local powers-that-be. They did not think that they were ‘exploiting’; their plaintive cry was, “We wuz robbed.”16

  Thus shorn of easy access to more than half of the world’s oil and the great majority of it that lies in easy-to-find and cheap-to-produce areas (Western companies had already been barred from touching Baku’s 300 billion barrels and the rest of the oil in the Soviet Union in 1917, along with the 13 billion barrels in Mexico in 1938), the industry turned to politically safer regions, with progressively smaller reserves and increasingly formidable environments, relying on technology to get them there. Meanwhile, the hungry engines of the global industrial machine were, by 1960, slurping up over 21 million barrels every day.17

  The quest to find oil outside the oil-rich countries, where the stuff was literally leaking out all over the place, was Herculean. Crude methods, born of both greed and luck, had already exposed the majority of the world’s oil. By 1950, all of the structural traps in the United States that were visible from the surface had been drilled.18 By the mid-1960s, the majority of the world’s giant oilfields had already been discovered, mostly on the lands that the Tethys had washed over, in Iran, Iraq, Kuwait, and Saudi Arabia, along with Venezuela.19

  Oil explorers would have to pinpoint layers of source rocks that could be as thin as thirty feet thick, buried under tens of thousands of feet of rock.20 If the migrating oil hadn’t found its way to the top where someone could see it, or if the geological formation that had trapped the oil wasn’t visible at or near the surface, how would the companies even start to look?r />
  A lot has to happen before a company can position its drill to actually figure out what is under the ground. Geologists theorize on whether the geology looks “prospective.” If it does, then access has to be secured. Finally the rigs move in, and the companies lay out anywhere between $5 and $30 million to drill an exploratory well, looking for oil, gas, or any tell-tale clues in the rocks that something oily might be there. A lot of times they are wrong.

  Once oil companies knew they were in “oil country”—places where they had determined that oil burbled somewhere underfoot—they only had to sniff out the places where the stuff was trapped. Still, the success of exploration wells was bad even then.

  Exploration geologists marked a tiny “X” on maps covering huge chunks of the earth’s surface. The holes they’d drill would be just eight inches in diameter. “It’s easy to miss the target, and a single unsuccessful wildcat (dry hole) often condemns the entire prospect,” said one petroleum engineer. With millions of dollars at stake, “Precision is essential,” he went on, admitting that “it isn’t really possible because exploration geology operates with a minimum of information.”21 The key to success, exploration geologists said, was to use all the information you could get together and then proceed “in the presence of uncertainties.”22