The Oil Road

by James Marriott

  We are standing in the middle of a region that is effectively one vast Factory. Spread out below, and far beyond the horizon, are the constituent parts of this great industrial machine that echoes the network of platforms in Azeri waters. Most of the crude from beneath the Caspian leaves the offshore fields in a handful of pipelines bound for Sangachal, and this industrial enterprise is largely supplied by one line coming from Trieste. TAL feeds 100 per cent of the crude demand of Bavaria, 75 per cent of Austria’s, 50 per cent of Baden-Württemberg’s, and 27 per cent of the Czech Republic’s needs.

  Around the city of Ingolstadt, the Transalpine Pipeline delivers oil to the Vohburg refinery, then runs on to a tankfarm oil depot at Lenting in the rolling hills across the Danube valley, from where crude is distributed to the nearby refineries at Kösching and Neustadt. From Lenting, a further pipeline runs west to a refinery at Karlsruhe on the Rhine, while from a subsidiary tankfarm at Vohburg, yet another pipeline runs north-east to refineries at Kralupy and Litvinov in the Czech Republic.

  The battery of refineries running east to west across the belly of central Europe – Schwechat, Kralupy, Litvinov, Burghausen, Neustadt, Vohburg, Kösching and Karlsruhe – are like eight mighty furnaces fed by crude from TAL. In turn, they provide energy for a myriad of machines within an area that stretches from Vienna in the east to Strasbourg in the west; from Prague in the north to the Alps in the south: a zone of production some 700 kilometres long by 300 kilometres wide; a zone one and a half times the land area of Azerbaijan.

  When gazing at Azerbaijan, the interested viewer from Western Europe will imagine its oilfields, although they are far offshore and inaccessible. The same eyes tracking media coverage of Georgia will soon perceive the BTC pipeline, although it is buried and only the marker post and pump stations are visible. Yet while these eight refineries that are fed by TAL dominate the landscape and are a familiar sight to millions of people, the plants and the pipeline are not perceived as one system, one machine.

  TAL and its eight refineries are part of the skeleton of Central Europe. Gasoline for cars and trucks; heating oil for factories and hospitals; feedstock for chemical works and plastics plants; fuel oil for power stations and river barges; bitumen for roads and roofs. The list continues. According to our basic calculations, approximately 27 million citizens live in the area provided for, and these inhabitants, particularly in Germany and Austria, have some of the highest consumption levels of any people on the earth.

  What comes from the refineries fuels the consumption not only of those who live within this zone, but also those who pass through it. At Geisenfeld the night sky is dotted with the flashing pinpricks of aircraft lights: jets arriving and departing from Munich’s Franz Joseph Strauss Flughafen, forty kilometres to the south. This is a ‘hub airport’: the fuel from the Neustadt refinery will take a 747 to Calcutta or New York. The same is true for the other international flight destinations that lie within this zone, such as Prague, Frankfurt and Stuttgart. The refined crude from TAL carries people and machines to every corner of the globe.

  The zone is criss-crossed by eleven autobahns covering thousands of kilometres:

  E35, E41, E43, E45, E50, E52, E53, E54, E56, E58, E60

  These transport corridors within the Factory, carrying vast quantities of traffic, echo the pipelines below ground. A family filling up its Volkswagen Golf at the Aral petrol station at Schollstrasse in Ingolstadt, just before they pull onto the E45, can travel for over 500 kilometres, as far south as the Adriatic or nearly to the Baltic in the north. In this way the shadow of the Factory extends far across the landmass of the continent.

  This is one of the car-building heartlands of Europe. From early and forgotten inventors of the Austro-Hungarian Empire, such as Vaclav Laurin and Vaclav Klement near Prague, to those whose names still evoke the industry – Karl Benz in Mannheim, Gottlieb Daimler in Stuttgart and Rudolf Diesel in Augsburg – the automobile was in large measure born in this area. There still remains within the zone a remarkable array of car plants, including Skoda at Mlada Boleslav, BMW at Regensburg, Audi at Ingolstadt, and Daimler Chrysler near Stuttgart. The TAL refineries provide the backbone of this industrial realm.

  We have decided to explore one part of this great Factory: the discrete area around Ingolstadt, stretching ten kilometres across the Danube floodplain and thirty kilometres along it. Within this valley lies the heart of the region: three refineries, arms manufacturers, a car plant and several petrochemical works. This is what lies before us at Geisenfeld.

  INGOLSTADT, GERMANY

  The Danube plain, still so far from the sea, is immense. Across it, fields are neatly squared out, hedgeless; dark with furrows, or rich green with winter wheat. Here and there is the bright yellow of oilseed rape. Between the fields, streams cut their way north from the Hallertau.

  Just to the east of Ingolstadt lies the small nature reserve, Lebensraum Donau-Auen. A wondrous jungle of trees, the undergrowth full of cuckoos and chiffchaffs, buzzards and black woodpeckers – this is a glimpse of the wild, waterlogged forest that ran along the Danube before the river was channelled. It would have presented a formidable barrier: no wonder this was the Roman limes. Facing the empire across the floodland were the unconquered German tribes, the barbarians. This border was the sister to that running just south of Batumi through the Caucasus, at the other edge the empire.

  Since the end of the Ice Age, settlements in this area had been part of what archaeologists call the Middle European Corridor – a convergence of routes that could run from the Caspian, over the saddle between the Greater and Lesser Caucasus, around the coast of the Black Sea, up the Danube and then down the Rhine to the North Sea or the Loire to the Atlantic. Trade took place as objects were exchanged, carried for a distance, exchanged again, and carried further. There is a remarkable continuum of human and material traffic along this river valley, from hunter-gatherer communities to the present day: a span of over 10,000 years.1

  Ingolstadt grew up on high ground, close to a point where the Danube could easily be crossed. As a place of strategic importance, the King of Bavaria surrounded it with massive fortifications in the 1850s. Hulks of stone bastions still guard the approach to the Danube Bridge and dot the surrounding farmland in a protective ring. The transport of goods by barge grew substantially in the nineteenth century, and the river was straightened and embanked, raising the water level several metres above the floodplain. After the development of oilfields in Romania in the 1870s, crude and kerosene were carried up this waterway. In 1997 the first crude from the Azeri–Chirag–Gunashli oilfield arrived, via pipeline, at the Black Sea ports of Supsa and Novorossiysk. At that point it would have been possible for that Azeri oil to have been shipped across the Black Sea up the Danube by bunker barge to the refineries of Ingolstadt. But the drive to construct BTC precluded this idea.

  After Stunde Null, or ‘Year Zero’, while the fate of Germany was unclear, Ingolstadt housed a huge refugee camp. From 1945 to 1947 the four occupied zones – British, French, American and Russian – cooperated through the Inter-Allied Control Commission. But in 1947 hostility between the Western powers and the Soviet Union grew, and the British and the US created a joint area, called ‘Bizonia’, in which they developed the kernel of a new West German state. In June that year, US Secretary of State George Marshall unveiled plans for a European Recovery Program, in which a reindustrialised Germany was to hold the line against Soviet expansion. The Marshall Plan ran for four years, dispensing $12.5 billion to European states from Britain to Turkey, and was significantly biased towards increasing oil consumption.

  As Germany shifted from the possibility of the agrarian Morgenthau Plan to the implementation of the industrial Marshall Plan, the Anglo-Iranian Oil Company, as BP was then called, ramped up its position in the occupied state. In an echo of the process that took place after Germany’s defeat in World War I, the company purchased large chunks of the country’s oil infrastructure, including the Eurotank refinery in Ham
burg, and a Bavarian and Austrian distribution company. Anglo-Iranian’s fuel sales in the country doubled in three years.

  The French Sector had soon joined Bizonia, creating an economically united entity, while funds from the Marshall Plan were used to relocate a car plant from Chemnitz in the Soviet Sector to Ingolstadt in the US Sector. It was renamed Auto Union Deutschland Ingolstadt – Audi. Similarly, Anglo-Iranian moved the headquarters of its subsidiary OLEX permanently from Berlin to Hamburg, within the British zone. All Anglo-Iranian’s new German assets were merged into BP Benzin und Petroleum GmbH.2

  John Browne was born in Hamburg on 20 February 1948, barely a month after Anglo-Iranian purchased the Eurotank refinery down by the dockside of the same city. His mother, a Jewish Hungarian from the west of Romania, had – remarkably – escaped the Holocaust. In Hamburg she married Edmund Browne, an officer in a British Army tank regiment stationed in the city. In 1957, Browne senior took a job with Anglo-Iranian. Soon, together with this wife and son, he was posted to Iran. So began the intertwining of John Browne’s life and that of the company.

  On the final day of the Berlin Airlift in May 1949, the Grundgesetz – the Constitution – for the Federal Republic of Germany was established. In the elections that followed, Konrad Adenauer, of the Christian Democrat Union, campaigned under the slogan: ‘No Experiments’. His programme explicitly refused to promise dramatic changes, as a counterpoint to the German experience of both Nazism and, in the east of the country, Soviet Stalinism.3 In July 1949, Adenauer was elected chancellor, with Ludwig Erhard as his finance minister.

  Adenauer and Erhard are seen as the giants of the West German ‘economic miracle’, the Wirtschaft Wunder, which produced an 8 per cent annual growth rate throughout the 1950s and, by the end of the decade, had made the Federal Republic the most prosperous country in Europe. Oil consumption soared in Germany, growing even faster than the rest of the economy: it increased on average by 19 per cent every year between 1960 and 1965. Soon BP’s largest market outside the UK was Germany.

  And yet, as a consequence of its origins, BP’s sales of refined petroleum products, such as petrol and aviation fuel, lagged far behind its competitors Shell and Standard Oil. The founding myth of Shell lay in the Murex tanker’s journey from Batumi through Suez to the Far East arranged by Marcus Samuel, while the legend behind Standard Oil was that of Rockefeller’s ruthless control of the pipelines in the US. These stories of origin emphasise that both corporations had prioritised their ability to refine and sell products. BP’s roots lay in drilling and extraction. The Royal Navy was its primary buyer of crude. BP’s weakness in actually selling refined products was exacerbated in the 1950s when Iran, Iraq, Kuwait and other host governments demanded ever higher extraction rates. The company was forced to sell crude in bulk rather than refining it first, thereby undermining BP’s overall profitability.4 Maurice Bridgeman, CEO of BP, knew that in order not to lose even more ground to its rivals, the company had to grow its shipping and refining operations. An increase in consumption of BP products in key European markets was seen as essential.

  By the 1960s, Bridgeman was seriously concerned that BP could lose its strong position in Germany and other EEC countries. France was following a dirigiste policy, its government backing French oil companies by placing restrictions on foreign corporations, preventing them from dominating the domestic retail market. The French government, together with state-owned French and Italian oil companies, was trying to persuade Germany and the other EEC member states to adopt similar policies. BP being based outside the EEC, it faced the alarming prospect of losing much of its retail market in Europe.5

  Bridgeman was convinced of the need for urgent action. Seeing West Germany as pivotal in the fight against the French-led push for state-directed economies, BP carried out an intensive lobbying campaign in 1967. German ministers were targeted, together with British politicians believed to have influence in Germany. Deminex, the German state-backed oil group, was even offered the prospect of a share of BP’s access to crude oil in Iran and Abu Dhabi. In May 1968, the company engaged in European parliamentary hearings, arguing ‘in favour of a liberal international economy, free from discrimination against the oil multinationals whose integrated international supply systems were . . . the best guarantee of security and cheapness in oil supplies’.6

  BP used its financial capital to force more of its products into Europe and drive up demand for oil. Thus the company locked itself into a mutual dependency with certain markets. As Germany’s economy expanded and demanded more petroleum, BP helped provide it. As BP needed to increase the sales of its products, it pushed to expand the German economy.

  BP, then, had a role in creating the West Germany it needed – just as, decades later, it had a hand in shaping the Azerbaijan, Georgia and Turkey it needed. In all these cases, and in many other states around the world, it has helped form economies and societies in a manner that enables its maximisation of profit, in places of both extraction and consumption.

  Our guidebook to the landscape of Ingolstadt is Eine Stadt baut auf (‘A city is built’). Published by the municipality in the 1960s, it walks us through the transformation of the town between 1960 and 1965: the planned new zones of housing; the massive new Audi works; the sites of the five new refineries; the locations of the new schools and churches. The photographs celebrate the opening of the new Danube Bridge and capture the autobahns from the air. This is the city that in due course gave the world the Audi slogan, Vorsprung Durch Technik (‘Advance Through Technology’).

  Standing on an autobahn bridge above six lanes of traffic speeding through the urban fabric, we can see, in all directions, a horizon dominated by smoking power stations and refinery chimneys. Back in 1949, Chancellor Adenauer had promised ‘No Experiments’, yet here we are in the midst of a great experiment, a piece of social market engineering that echoes the industrialisation of Sumqayit and Rustavi. The 1960s photographs in the guidebook are suffused with the same spirit of technological optimism that flowed through Hikmet’s poems and Khrushchev’s Soviet Union: the vision of the city as a model of harmony, with the machine as an essential assistant to the citizen.

  We were lent this book by Rudi Remm, an environmental campaigner with decades of experience on local issues and a deep knowledge of the industrial history of the region. Over beer and sausages in a Munich bar, talking long into the night, he explains his understanding of Bavaria’s development since the war.

  Unlike the provinces of Sachsen or Nordrhein-Westfalen, Bavaria had a relatively small coal resource. Consequently the region was comparatively unindustrialised for the first half of the twentieth century, the majority of its population engaged in agriculture. Fuel came from wood and hydropower, known locally as weißkohl or ‘white coal’. Rudi elaborates how the River Inn, north of Rosenheim, had the largest hydroelectric plant in Germany, generating 400 megawatts: ‘That’s huge, half a nuclear power plant!’ Until 1960, most of Bavaria’s energy came from renewable sources: ‘Houses were heated by wood and a little coal, but now they are heated by oil, or gas or combined heat and power – most of the latter coming from gas-fired power stations’.

  The prime minister of Bavaria, Alfons Goppel, and the Bavarian minister for economy and transport, Dr Otto Schedl, dominated the post-war politics of the region, echoing Chancellor Adenauer and Finance Minister Ludwig Erhard on a national level. As minister from 1957 to 1970, Schedl closed down the few Bavarian coalmines and delineated areas around Ingolstadt and Burghausen as petrochemical hubs. We ask Rudi if the changes that came about were entirely the work of Schedl and Goppel. ‘You can’t be sure. I feel it was also about the policy of the European oil companies. There’s a film that was made for schools by the Landesfilmdienst. It portrays the refineries as the “new age” for Ingolstadt’.

  Within a year of taking office Schedl had found a key ally: Enrico Mattei, the charismatic general director of the Italian state-owned oil company, ENI. Schedl and Mattei together sketch
ed out the plan that led to the building of a pipeline from Genoa – the Central European Pipeline System. At Ingolstadt a new refinery was to be built, operated by ENI, but 50 per cent owned by BP.

  Construction of the pipeline and the refinery began, but these projects neither satisfied Schedl’s vision nor quenched the appetite of the oil companies. Long before the first plant opened, plans were well underway for the construction of further refineries at Vohburg and Neustadt, and for a new route to increase the pumping of crude from the south – the Transalpine pipeline that we have been following.7 Listening to Rudi, we realise we have discovered three more fathers of TAL: Mattei, Schedl and Goppel.

  As the book Eine Stadt baut auf rolled off the presses in the late 1960s, the area around Ingolstadt was in a ferment of change as the experiment was given form. A city was built that the Futurists – indeed, Marinetti himself – might have dreamed of.

  TAL KP 452 – 5,059 KM – VOHBURG, BAVARIA

  Fourteen kilometres east of Ingolstadt, we stand on the precipitous ramparts of the small medieval town of Vohburg and survey the great sweep of the land around. All about is the fertile plain – ploughed fields of black earth, lines of poplars and green swathes of pasture. Vohburg feels like an island in a sea of farmland.

  Walking the town ramparts, we can look down at the youth hanging about at the bus station outside the walls. Beyond it, the refinery spreads out to the west, a titanic chemistry set with its distillation units, crude storage tanks, spherical gas holders, chimneys and perimeter fences. All this is recognisable from the aerial photograph in BP’s 1977 staff handbook, Our Industry Petroleum.8