The Prize

Part 1: The founders

• Arnold Wilson, a British lieutenant dispatched to Persia to oversee oil drilling, said he “had spent a fortnight upon Oil Company business, mediating between Englishmen who cannot always say what they mean and Persians who do not always mean what they say.”
• He’s a good teapot though he may be a bad pourer!

• Part 1 talks about:

• Oil discovery in America. Starts in Pennsylvania. Drilling is done after some evidence of oil (oily rocks, oily films on top of water reservoirs) is found. Oil spurts out of ground—oil rush ensues
• Standard Oil, led by Rockefeller, capitalizes most on new oil discoveries in America. They use shady tactics to maintain dominance of the market; Rockefeller maintains a cash reserve to withstands the ebbs and flows of supply and demands. This cash reserve allowed them to aggressively price cut to dry out competitors, after which they’d acquire them.
• Talks about the monumental discovers, the hoard of people that would accumulate, the rise in land prices around them, and then the rapid exhaustion of resource and ghost towns left when the wells would run dry.
• There were no gasoline run engines yet, so kerosene was the major product, used for lighting. Before, people would use candles (wax and whale fat was expensive) or poorer families would use rags dipped in animal fat/vegetable oil.
• Standard oil eventually gets ordered by the government (led by Roosevelt) to disassemble. They break up into what is today Chevron, Exxon, and others.
• Meanwhile, in the East, Royal Dutch gets running in southeastern Asia with some oil discoveries. Shell, then a transport company led by Marcus Samuel, transports Oil from Russia/Baku (from a company led by one of the Nobel brothers) to the rest of Eurasia, and then eventually Royal Dutch’s oil.
• Shell was named after Marcus Samuel’s fathers occupation: he was a sea shell merchant (among other trinkets and doodads)
• Shell and Royal Dutch eventually merged. The Russian oil company was volatile, subject to strikes from communist uprises in Baku.
• Gasoline vehicles started gaining traction in the early 1900s, leading to the use of a once useless fraction from the refining process
• Reserves were found in Persia, and a British investor and Persian diplomat teamed up to start drilling there. Britain had geopolitical interests in controlling this area to maintain access to India. Russia wanted access to reach the Persian gulf; a warm water port.
• Navy ships were starting to transition from coal to fuel oil. In Britain, it was realized to maintain an advantage they needed to expedite their transition. Coal required more manpower to shovel and tend to and generated less power, speed, and maneuverability.
• The Persian drilling/refining project then received substantial government investment to keep it afloat (it had been struggling to get going with lack of expertise, tribal tensions in rural Persia, harsh living conditions and lack of infrastructure). This provided the British Navy with a source of fuel oil.
• This British investment in Persian oil was probably the first instance of oil becoming a national instrument of policy and of warfare.

Part 2: The World Struggle

• In world war 1, the oil powered engine simplified the problems of mobility and supply (before movement was restricted to railroads or horseback, and horses ate 10x more food than men). However, these engines multiplied devastation. A solution that created more problems.