United for Peace of Pierce County (www.ufppc.org) Digging Deeper: January 10-31, 2005.

Daniel Yergin, The Prize: The Epic Quest for Oil, Money, and Power (New York:
Simon & Schuster, 1991).
Prologue. After Agadir crisis (1911),
Rockefeller ends "the era of the oil
Churchill converts British fleet to oil,
exchanges," 1895 (53-54). "Rockefeller
because "Mastery itself was the prize"
created the vertically integrated
(11-12). Three themes: (1) "the rise and
petroleum company" (54). Rationalizer
development of capitalism and modern
of industry or predatory Octopus? (54business" (13); (2) "oil as a commodity
55).
intimately intertwined with national
stratagems of global politics and power"
Ch. 3: Competitive Commerce.
(13); (3) how ours has become a
Importance of global markets (56-57).
'Hydrocarbon Society' and we . . .
Ludwig Nobel becomes "Oil King of Baku"
'Hydrocarbon Man' (14). Rising scrutiny,
in 1870s (58-60). Rothschilds (Alphonse
criticism, and opposition (15).
& Edmond) get into Russian oil in late
1870s, found "Bnito," 1886 (60-61).
PART I: THE FOUNDERS
Standard Oil sets up Anglo-American Oil
Co., its first foreign affiliate, 1888 (62).
Ch. 1: Oil on the Brain: The
Rothschilds contact Marcus Samuel
Beginning. April 16, 1855: Yale's
through Fred Lane, late 1880s (63-65).
Benjamin Silliman Jr.'s report on "rock oil"
With 9-year exclusive rights to Bnito
for investors led by George Bissel (19kerosene (1891-1900), Samuel organizes
22). Kerosene as illuminating fuel and
tankers, secures canal access, and builds
lubricant (22-24). The Vienna lamp (24local storage capacity throughout Far
25). Bissel has Edwin Drake drill for oil in
East, undercutting Standard Oil (65-70).
Titusville, PA; strikes oil on Aug. 27, 1859
Predecessor of Shell, Tank Syndicate,
(25-29). Boom and bust in the Oil
organized, 1893 (70). Rockefeller &
Regions (29-33). The "rule of capture"
Samuel brothers contrasted (70-71).
(32). Pipelines (33). Oil exchanges (33Efforts to settle the Oil Wars among
34).
Standard, the Rothschilds, the Nobels,
and the other Russian producers fail,
Ch. 2: "Our Plan": John D. Rockefeller
1892-95 (71-72). Royal Dutch founded to
and the Combination of American
exploit oil from Sumatra, 1890 (73-75).
Oil. John D. Rockefeller (1839-1937) sole
Other companies' efforts to gain control
owner of Cleveland trading firm, 1865
of Royal Dutch (75-77).
(35-36). Joined by Henry Flagler (38).
Rebates, drawbacks (39). Standard Oil
Ch. 4: The New Century. Electric
founded, 1870 (40). Conceives of "our
generation and automobile reshape oil
plan": to consolidate all oil refining (40).
markets, 1882-1905 (78-80). Pure Oil
Success in 1870s "Oil War": Standard Oil
becomes small but genuine U.S.
controls 90% of U.S. refining capacity in
competitor to Standard Oil, 1895 (80-81).
1879 (41-43). Tidewater Pipeline
California fields exploited 1890s-1910,
challenge turned back, 1879 (43). Public
Union Oil (Unocal) dominant there (81outrage; legal challenges (43-44). The
82). Oil found in Texas, 1893 (83).
trust, 1882 (45). Management by
Spindletop gusher (Jan. 10, 1901) sets off
committee (45-47). Rockefeller the man
Texas oil boom (82-86). Marcus Samuel's
(47-50). The oil industry in the 1880s
Shell contracts for half of Spindletop's
(50-51). Discovery of oil in Ohio c. 1885
production for 20 years, develops fuel oil;
leads Rockefeller to acquire oilfields and
more oil in Louisiana and Oklahoma (86become an oil "producer" (52-53).
87). Creation of Mellons' Gulf Oil, 1902-

07 (88-92). Pews establish Sun Oil, early

1900s (92). "Buckskin Joe" Cullinan
starts Texaco (93-95). Standard Oil's
dominance recedes (95).
Ch. 5: The Dragon Slain. Public sees
Standard Oil as nefarious (96). Legal
attacks by states lead to reorganizations:
Standard Oil Interests, 1892; Standard Oil
of New Jersey, 1899 (97-98). John D.
Archibold takes over leadership of
Standard Oil, 1897 (98-100). Muckrakers
interested in trust issue (100-01). Ida
Tarbell's The History of Standard Oil
Company (1904), first published in 24
issues of McClure's (101-06). Theodore
Roosevelt takes up trust issue (106-07).
U.S. sues Standard Oil, 1906; Supreme
Court orders breakup, May 1911 (10809). Seven entities (110). Standard of
Indiana's William Burton devises thermal
cracking, increasing gasoline yields (11112). Breakup enriches Rockefeller and
other shareholders (113).
Ch. 6: The Oil Wars: The Rise of
Royal Dutch & the Fall of Imperial
Russia. Mark Abrahams finds oil in
Borneo for Marcus Samuel, 1897-98 (11416). Oil's future = source of power (116).
Shell formed, 1897 (117). Oil market
tumbles, 1900 (117). Oil strike in Perlak
saves Royal Dutch, 1899 (118). Royal
Dutch (under Henri Deterding), Shell
(Marcus Samuel), and Rothschilds
combine in Asiatic Petroleum Co., 1902
(119-23). Royal Dutch takes precedence,
1907 (123-27). Sends Abrahams to
Oklahoma to establish American
presence, 1912 (128). Turmoil and
revolution in Russia; Stalin emerges (12931). Romanian oilfields (132).
Rothschilds sell out for shares in Royal
Dutch & Shell (132-33). Baku as "prize"
in future conflicts (133).
Ch. 7: "Beer and Skittles" in Persia.
William Knox D'Arcy wins 60-year oil
concession in Persia (134-38). Shia as
factor (138-39). Despite Thomas
Boverton Redwood's help, British

Admiralty loan refused, 1903 (139-40).

The Concession Syndicate: British
Admiralty brokers rescue of D'Arcy by
Burmah Oil (140-42). 1906 revolution in
Persia (145) and its 1907 division into
Russian and British spheres of influence
precede 1908 oil gushers at Masjid-iSuleiman (142-47). Resulting AngloPersian Oil Co. goes public in 1909, but
exhausts capital by 1912 (148-49).
Ch. 8: The Fateful Plunge. Lord Fisher
urges conversion of fleet from Welsh coal
to fuel oil, 1904 (150-51). Anglo-German
naval race begins, 1897 (152-53). After
Agadir, galvanized Churchill becomes
First Lord of the Admiralty, 1911 (15355). April 1912: Churchill's "great
gamble": commits to oil with no assured
supply: "If we required it we must carry
it by sea in peace and war from distant
countries . . . Mastery itself was the prize
of the venture" (Churchill, World Crisis,
vol. 1 [1923]) 155-56). Fisher leads Royal
Commission, 1912-13 (156-57). Charles
Greenway fashions Anglo-Persian (15859). June 17, 1914: Parliament votes
254-18 to become majority shareholder
in Anglo-Persian: "Oil, for the first time
. . . had become an instrument of
national policy" (158-63). August 1914:
World War I begins (1964).
PART II: THE GLOBAL STRUGGLE
Ch. 9: The Blood of Victory: World
War I. Oil and WWI (167-68). Gen.
Joseph Gallieni's taxi armada, Sept. 6-7,
1914 (168-70). Tanks and other
motorized vehicles decisive in defeating
Germany (170-71). Great spur to
aviation (171-72). Churchill and Fisher
proved "generally right" on converting
fleet to oil (172-73). Contested
relationship between Anglo-Persian and
Shell; Marcus Samuel's British patriotism
(173-76). In response to oil dearth
brought on by German submarine
attacks, U.S. assistance and formation of
Inter-Allied Petroleum Conference (17677). U.S. oil and coal supply squeezed

(178-79). Col. "Empire Jack" NortonGriffiths destroys Romanian oil industry,

1916 (179-82). German attempt to seize
Baku frustrated (182). Allied victory
attributed to oil (183).
Ch. 10: Opening the Door on the
Middle East: The Turkish Petroleum
Company. Political power moves from
periphery to the center of the struggle
for oil, 1918 (184-85). Mesopotamia
(185; also 173). Calouste Gulbenkian
and the Turkish Petroleum Company
(185-88). Sykes-Picot Agreement (188).
Wilson's Fourteen Points (188-89).
Balfour willing to feign respect for them
(189). Disputed Clemenceau-Lloyd
George agreement, Dec. 1, 1918 (189).
San Remo Agreement: France gets 25%
of Mesopotamian oil, gives up Mosul
(189-90). Col. Ernest Mercier organizes a
French oil company: Compagnie
Franaise des Ptroles (190-91).
Controversy over amalgamation of Royal
Dutch/Shell and Anglo-Persian (191-92).
Churchill brought in to advocate this as a
means of "British control over a
worldwide oil system," to no avail (19294). British acquiescence to U.S. thrust
into global oil quest, 1921 (194-96).
Walter Teagle of Standard Oil of New
Jersey, advocate of foreign oil production,
leads U.S. consortium seeking entry to
Middle East (196-200). Faisal, 3rd son of
Hussein of Mecca, installed as king of
Iraq, 1921 (200-01). New concession
signed, 1925 (201-02). "'Oil friendships
are very slippery,' [Calouste Gulbenkian]
once said" (202). Gulbenkian, "business
architect," resists renegotiation (202-03).
Geological expedition in Iraq, 1925 (203).
Drilling, 1927 (204). Baba Gurgur
Number 1 gusher, Oct. 15, 1927:
95,000b/day (204). "Full contract"
signed, 1928: Royal Dutch/Shell, AngloPersian, CFP & Near East Development
Co. (U.S. consortium) get 23.75% of oil;
Gulbenkian, 5%, convertible to cash sale
to French at market price (204). Red Line
Agreement: in former 1914 Ottoman

Empire, Turkish Petroleum Co. operations

are cooperative (204-05).
Ch. 11: From Shortage to Surplus:
The Age of Gasoline. Eisenhower on
cross-country motor caravan, July-Sept.
1919 (207-08). "Automobile revolution,"
U.S. in lead (208-09). Gasoline retailing
(209-11). Teapot Dome scandal, 19221931 (211-16). John D. Rockefeller Jr.,
defender of oil industry's "basic
integrity," ousts "Col. Bob" Stewart (21618). Technology and oil exploration (21819). New discoveries: Signal Hill, CA
(219-20). Henry Doherty advocated
"unitization" of oilfields (220-22). Federal
Oil Conservation Board, 1925 (222.23).
Oklahoma's Greater Seminole Field &
West Texas's Yates Field; technological
progress bolsters supply (223-24). U.S.
oil tariff rejected, 1930 (224). Domestic
competition increases with Humble Oil,
Ohio Oil (Marathon), Phillips Petroleum
(224-27). Wave of mergers and nearmergers (227-29)
Ch. 12: The Fight for New
Production. Chance of 1901 delay in
Laredo leads Sir Weetman Pearson (later
Lord Cowdray) to found Mexican Eagle,
which struck oil in 1910 (229-31). After
Mexican Revolution, sells to Royal
Dutch/Shell in 1918 (231-32). Dispute on
nationalization and legal rights (232-33).
Corrupt dictator, Juan Vicente Gmez,
has Americans write Venezuelas
Petroleum law; Maracaibo strike, 1922
(233-36). Standard of New Jersey
develops underwater drilling technology
(236-37). Soviet Union nationalizes oil;
Standard of Jersey buys Nobel interests
(237-38). Leonid Krasin negotiates for
USSR (238-40). Front Uni (240). JerseyShell agreement with Soviets falls
through, to Teagles relief, 1927 (241-42).
Vacuum & Standard of NY (Socony) buy
Russian products; Deterding furious (24243).
Ch. 13: The Flood. Dad Joiners
surprising East Texas gusher, Oct. 3,

1930 (244-46). Black Giant the largest

U.S. field (246-47). Joiner signs away
claims to H.L. Hunt (247-48). Oil glut
brings crisis (248-49). Texas Gov. Ross
Stirling declares insurrection, allows
Texas RR Commission to issue proration
orders (across-the-board cutbacks), Aug.
1931 (249-51). Crisis continues (251-52).
Calls for govt. action grow as Roosevelt
names Harold Ickes Sec. of the Interior
and Oil Administrator (252-54). July 14,
1933: Roosevelt signs executive order to
ban hot oil under Art. I, Sect. 8
interstate commerce clause (255). Sept.
2, 1933: Ickes declares state production
quotas prorationing overturns the rule
of capture (256; see 32). The question of
setting prices (256). Supreme Court
overturns federal powers in 1935, but a
voluntary system of federally suggested
production quotas survives (256-57).
Interstate Oil Compact, 1935 (257).
Foreign oil tariff imposed, 1932;
Venezuela most affected (257-58).
Underlying assumptions of the new
system: (1) inelasticity of demand for oil;
(2) states have a natural share of the
market (258-59).
Ch. 14: Friends and Enemies.
Achnacarry (or As-Is Agreement, 1928,
leaves out too many players to succeed
in cartelizing production and distribution
(260-65). A series of As-Is agreements
(1930, 1932, 1934) somewhat more
effective, but ultimately collapse, 19381939 (265-68). Growing political
pressures make oil companies insulation
and protection from government
intervention their most important
objective in the late 1930s (268-69).
Shah Reza Pahlavi of Persia forces
renegotiation of Anglo-Persians oil
concession, 1932-33 (269-71). Article 27
of Mexican Constitution assigns subsoil
resources to Mexican state (272). Gen.
Lzaro Crdenas, president of Mexico,
1934 (273). Disputes lead to Mar. 18,
1938 Mexican expropriation (274-76).
World political situation makes Britains
response much stronger than U.S. govt.s

(276-77). Settlement of compensation

claims in 1941 for $30m leaves U.S.
companies feeling betrayed; Mexican
Eagle/Shell hold our till 1947 for $130m;
Petrleos Mexicanos (Pemex) establishes
a model for the future (278-79).
Ch. 15: The Arabian Concessions:
The World That Frank Holmes Made.
Frank Holmes sets up Eastern & General
Syndicate after WWI (280). Search for oil
in Arabia regarded with skepticism (281).
Gulf Oil takes up Kuwait, Socal (Standard
of California) takes up Bahrain
concessions (282-83). May 31, 1932: oil
struck in Bahrain (283). Ibn Sauds
creation of Saudi Arabia, 1902-1932
(283-86). Jack Philby, British renegade,
advises Ibn Saud (286-88). Negotiating
with Ibn Sauds minister of finance,
Abdullah Suleiman, Socals Lloyd
Hamilton wins Saudi concession for
60,000 loan up front and a promise of a
100,000 loan on the discovery of oil
(289-92). For 35,700 up front, in 1934
Sheik Ahmad of Kuwait signs 75-year
concession to Kuwaiti Oil Co. (50-50 Gulf
[Andrew Mellon pressing from his position
as U.S. ambassador to Great Britain] and
Anglo-Persian (292-98). Socal forms
Casoc (California-Arabian Standard Oil
Co.) to work in Saudi Arabia (298). With
Texaco, Socal forms Caltex as joint
venture to produce and market Saudi oil
an arrangement worked out by Dillon,
Reeds James Forrestal and Paul Nitze
(298-300). Oil struck in Kuwait, Feb. 23,
1938 (300). Oil struck in Saudi Arabia,
March 1938 (300). Casoc exercises
secret preferential rights to further
concessions in Saudi Arabia (300-01).
Operations suspended during WWII
(301). Later careers of Jack Philby and
Frank Holmes (301-02).
PART III: WAR AND STRATEGY
Ch. 16: Japans Road to War. Japan
occupies Manchuria, 1931 (305).
Ultranationalist militarists in power (306).
Japan dependent on foreign oil,

especially Rising Sun (Japanese affiliate

of Royal Dutch/Shell) and StandardVacuum (Stanvac, an amalgam of Jersey
and Standard of New Yorks Far East
operations) (307). 1934 Petroleum
Industry Law squeezed companies (308).
Japan attacks China, 1937; placates
companies as U.S. public opinion sides
with China (308-10). Stanvac resolved
on embargo of Japan if U.S. so decides
(310-11). U.S. moves fleet to Pearl
Harbor and restricts (but does not stop)
oil shipments to Japan, 1940 (311-13).
Cordell Hull & Adm. Nomura converse
repeatedly (313-14). Adm. Yamamoto
sensitive to Japans oil predicament (31416). Japan invades Indochina; U.S.
effectively embargoes oil, July 1941 (31619). P.M. Konoye-Roosevelt summit
doesnt come off (319-20). Japanese
resolve on war (320-23). Operation
Hawaiis primary target is East Indian
oilfields (325-26). Japanese err in failing
to destroy vulnerable U.S. oil supplies
(4.5m barrels) at Pearl (326-27).
Ch. 17: Germanys Formula for War.
I.G. Farbens research on synthetic fuels
(1913 Bergius process of hydrogenation)
leads to an alliance with Standard of
Jersey (328-31). Nazified I.G. Farbens
synthetic fuels produce 46% of
Germanys oil in 1940 (332-33).
Blitzkrieg and oil scarcity (333-34). Oil
and Hitlers invasion of Russia (334-36).
Operation Blau, to seize oil of the
Caucasus: ironically, the Germans ran
short of oil in their quest for oil; the
blitzkrieg phase was over (336-39).
Rommels contempt for the
quartermasters advice" controverted by
failure in North Africa (339-43). Speers
reorganized German economy depends
on synthetic fuels made by slave labor,
e.g. at Auschwitz (343-46; 817).
Beginning in May 1944, Allied air attacks
on synthetic fuel plants and other oil
facilities are a fatal blow (Gen. Adolph
Galland) (346-48). Battle of the Bulge:
Col. Jochem Peipers panzer unit almost
seizes Stavelot fuel supplys 2.5m gallons

of fuel (348-49). No fuel left in wars last

months (349-50).
Ch. 18: Japans Achilles Heel. Jan.
20, 1942: Shell manager H.C. Jansen
destroys Balikpapan (Borneo) oil-refining
center (351-54). MacArthur & Nitze
(355). Strategy: safeguard supply lines
and block Japans indispensable oil
line (355). U.S. victories at Midway and
Guadalcanal, but Japanese succeed in
gaining oil supply (355-57). Submarine
warfare decisive against Japanese
shipping; synthetic fuel effort fails (35758). Fuel shortages impact Japanese
conduct of war (359-62). Yamato sinking
on Apr. 7, 1945 is the end of the
Imperial Navy (362-63). Final desperate
moves: pine root campaign; overtures to
Soviets; national suicide (363-66).
MacArthurs motorcade and Tojos
ambulance (366-67).
Ch. 19: The Allies War. Britain rejects
synthetic fuel strategy, 1937 (368-69).
Deterdings pro-Nazi positions lead to
fears for Royal Dutch/Shell (369-70). In
U.K., monopolistic Petroleum Board
operates as Pool during war (370-71).
Ickes chosen to manage U.S. oil, chooses
Ralph Davies as deputy (371-72). 1941
German U-boat campaign nearly cuts off
British oil supply (373). Crucial Battle of
Atlantic finally defeats U-boats with
cryptanalysis, radar, and long-range
aircraft, mid-1943 (373-77). Ickes
successfully manages U.S. oil as
Petroleum Administrator for War (PAW)
(377-79). Rationing; distribution (37981). Innovation as factor in WWII, a war
of motion: jerrycans, 100-octane
gasoline plants (382-84). Shortage of
fuel keeps Patton from delivering fatal
blow in W. Europe in late August 1944,
many think (384-88).
PART IV: THE HYDROCARBON AGE
Ch. 20: The New Center of Gravity.
Everette Lee DeGolyers late 1943
mission to Saudi Arabia concludes: The

oil in this region is the greatest single

prize in all history (someone named
Leavall) (391-93). U.S. policymakers
focus on Mideast oil (395-96). 19431944: U.S. contemplates owning Mideast
oil and pipeline businesses (396-99).
Anglo-American tensions in 1943-1944
over Mideast oil (399-402). AngloAmerican Petroleum Agreement (1944)
fails due to Senate opposition (402-03).
Feb. 13, 1945: Roosevelt talks with Ibn
Saud for five hours aboard the USS
Quincy on the Great Bitter Lake of the
Suez Canal (403-05). After FDRs death,
attempts to revive the Anglo-American
Petroleum Agreement come to naught
(405-08).
Ch. 21: The Postwar Petroleum
Order. Rationing ends in U.S.; demand
explodes, and in 1948 U.S. becomes a
net importer of crude oil & products (40910). Mar. 12, 1947: Texaco, Socal (Harry
Collier), Jersey & Socony create TransArabian Pipeline (Tapline) to build
pipeline from Persian Gulf to
Mediterranean (410-16). Gulbenkian
negotiates Group Agreement of
November 1948, reconstituting the Iraq
Petroleum Co. (416-19). In Kuwait, Gulf
signs long-term contract with Shell (41920). Sept. 1947: Anglo-Iranian signs 20year contract with Jersey and Socony to
sell Iranian crude (420-22). Marshall Plan
funds and facilitates Europes conversion
to Mideast oil dependency (422-25).
Israel founded despite Ibn Sauds
opposition (425-26). Tapline complete,
1950 (426-27). Oil critical to domestic
comfort, national power, and strategic
defense; U.S.-Saudi relationship a
unique new relationship (427-28).
Cheap imported crude kills energy
independence projects (428-29).
Technological progress: deep drilling, offshore drilling (429). Natural gas
pipelines (429-30).
Ch. 22: Fifty-Fifty: The New Deal in
Oil. Ricardos concept of rents applied
to oil; competing claims to them (431-

33). Jerseys Walter Pratt embraces

change in Venezuela: with Arthur Proudfit
at helm in Venezuela, an agreement
based on the new principle of fiftyfifty reached in 1943, then renegotiated
after 1945 leftist coup; Venezuela takes
some royalties in oil; new coup in 1948
(433-37). In the Neutral Zone between
Kuwait and Saudi Arabia, Ralph Daviess
Aminoil and J. Paul Gettys Pacific
Western get 50% of concessions (43742). Oil struck in March 1953 (442-43).
Gettys deal, which makes him Americas
richest man, riles established companies
(443-44). With U.S. supporting foreign
tax credit deduction, companies accept
renegotiation of agreement with Saudis
based on 50-50 principle (445-48).
Varying perspectives on significance of
this revolution (448-49).
Ch. 23: Old Mossy and the
Struggle for Iran. Mohammed Reza
Pahlavi takes deposed fathers throne in
Iran, 1941 (450-51). Iranian hatred of
British (451-52). Under pressure, Sir
William Frasers Anglo-Iranian tries to
renegotiate agreement, but Iran under
Mossadegh nationalizes oil industry (45256). Portrait of Mossadegh as sly lunatic
(456-58). Plan Y, for British military
intervention (458). Dean Acheson sends
Averill Harriman to negotiate; British
send Richard Stokes; Mossadegh
intractable (459-62). British abandon
Abadan refinery, Oct. 4, 1951 (462-63).
Attempts at settlement unavailing;
Mossadegh grows demagogic (463-67).
Operation Ajax overthrows Mossadegh,
described as a countercoup, August
1953 (467-70). U.S. govt. prods
American companies to come to the
rescue in Iran (470-71). Justice Dept.
pursues criminal case with 1949 analysis
entitled The International Petroleum
Cartel, but Truman and Eisenhower
reduced case to civil matter (472-75).
Iranian consortium established: The
United States was now the major player
in the oil, and the volatile politics, of the
Middle East (475-78)

Ch. 24: The Suez Crisis. Suez Canal

(1869) becomes Anglo-French (1875);
long a lifeline of empire, in 1948 its
strategic significance shifts to being a
highway of oil (479-80). Nasser causes
alarm by buying weapons from Soviets
and recognizing Communist China; Dulles
cancels proposed Aswan Dam loan (48082). Jul. 26, 1956: Nasser seizes canal
(483). Eisenhowers anti-colonialism
(484). French & British inclined to
intervene, seeing Nasser as new Hitler
(485-87). Standard receives
recommendation of half-billion-dollar
pipeline across Iraq to Mediterranean
(488). Eisenhower warns Saudis that
nuclear power may make Mideast oil
worthless (488). Oct. 24, 1956: Secret
British, French & Israeli war-planning
meeting (489). Oct. 29: Israel attacks;
Oct. 31: British bomb Egyptians (489).
Eisenhower furious (490). British-French
airborne assault on Nov. 5, 1956, one day
after the USSR suppresses Hungarian
uprising; crises risk combining (491).
Eisenhower refuses to supply Europe with
oil until troops withdraw, end of Nov.
(491-93). But Dulles privately
reproaches Britain for not ousting Nasser
(493). Oil Lift to Europe and sugarbowl
distribution (493-94). Texas RR
Commission holds out for 35-cent price
hike (494-95). Energy crisis in Europe
averted; Nasser wins; British resume use
of Suez Canal (495). Suez Crisis an
epitaph for a state of mind (495-96).
Successful Japanese manufacture of
supertankers a response to Suez (49697). U.S. & Britain heal rift (497-98).
Ch. 25: The Elephants. Elephant =
large oilfield (499). Proven oil reserves
grow from 62b barrels in 1948 to 534b in
1972 (500). Price cuts fuel nationalism
(500-01). Enrico Mattei aspires to make
ENI (formerly AGIP) into major oil
company (501-03). Mattei coined term
Seven Sisters (503). Mattei signs 1957
25%-75% deal with Shaw, breaking 50-50
principle but no oil is found (503-05).

Japan obtains offshore concession to

their Arabian Oil Co. from Saudi Arabia
and Kuwait, also breaking 50-50 (50507). Standard of Indiana signs 25-75
deal, 1958; finds oil in Darius field south
of Kharg Island (507-08). Nasserite
propaganda a factor in violent overthrow
of Iraqs Hashemite monarchy (508-09).
Venezuelas Juan Pablo Prez Alfonso,
after exile & study of oil industry, returns
to power as Betancourts Minister of
Mines and Hydrocarbons; he proposes an
international cartel modeled on Texas RR
Commission (510-13). Abdullah Tariki
becomes Saudi oil director, 1955 (51314). Oil abundance (incl. from Soviet
Union) produces discounting, with oil
companies absorbing costs; in 1959
British Petroleum cuts countries price,
producing outrage (514-15). April 1959
Arab Oil Congress: journalist Wanda
Jablonski brings together Tariki, Prez
Alfonso, & others to sign Gentlemans
Agreement, precursor of OPEC (516-18).
Ch. 26: OPEC and the Surge Pot. Jack
Rathbone of Standard of Jersey cuts
prices 7% on Aug. 9, 1960 (519-22).
Sept. 1960: OPEC founded in Baghdad
by 5 countries, source of 80% of worlds
exports of crude (522-23). Weak
organization (523-25). French BRP
(Gabon) and RAP (Algeria) merged to
form Elf (525-27). Oil in Nigeria, 1956
(527). Huge discoveries in Libya (52729). Cutthroat competition results (52930). Mattei dies in plane crash, Oct. 27,
1962 (530-31). Explosion of new
internationals leads to decline in
profitability (531-32). Saudi-Iranian
tensions (532-35). Pressure for import
restrictions from domestic independents
(535-37). Despite weakness of national
security arguments, Eisenhower
imposes mandatory quotas, Mar. 10,
1959 (537-38). Despite their byzantine
nature, quotas succeed in protecting
domestic oil production and in stabilizing
price of U.S. crude around $2.90/barrel in
the 1960s (538-40).

Ch. 27: Hydrocarbon Man. Global oil

consumption increased 5.5 times from
1949 to 1972, fueling economic boom
(541-42). Oils predominance replaces
coals in U.S., Europe, and Japan (54346). Conoco becomes a significant
international oil company (547-48).
Competition spurs extravagant
advertising claims (548-50).
Suburbanization and transformation of
American consumers lives (550-52). N.J.
Turnpike, highway lobby, and Interstate
Highway system (552-54). Six-Day War;
Arab oil embargo fails (554-58). E.F.
Schumacher, economist advising British
Coal Board from 1950 to 1970, warns
against dependence on oil (558-60).
PART V: THE BATTLE FOR WORLD
MASTERY
Ch. 28: The Hinge Years: Countries
versus Companies. Shahs celebration
of 2500th anniversary of founding of
Persian Empire, and relations with Britain
(563-64). Jan. 1968: Britain announces
end to defense commitments east of
Suez; leaves, Nov. 1971 (565-66). 1970:
U.S. production peaks, surplus capacity
wanes (567-68). Environmental
consciousness (568-69). Dec. 26, 1967:
Prudhoe Bay strike, largest oilfield in
North America; ARCO, Jersey, & BP (56972). Trans-Alaskan pipeline (572-74).
Armand Hammer parlays USSR-made
fortune into Occidental Petroleums
becoming the sixth-largest oil-producing
company in the world, thanks to Libyas
Idris field, 1966 (574-77). Qaddafis
1969 coup in Libya leads to Occidentals
renegotiation, decisively changing the
balance of power between producing
countries and oil companies (577-80).
Oil companies efforts to form common
front fail; Tehran, then Tripoli,
agreements (1971) give OPEC muscles
(580-83). Concept of participation
develops as alternative to nationalization
(583-85). National Iranian Oil Co.
recognized as operator as well as owner
(585). Excess production capacity in

1973 only one percent; cheap oil as spur

to growth cannot be sustained (585-86).
U.S. diplomat James Plackes ignored
1970 memo (586-87).
Ch. 29: The Oil Weapon. With demand
growing and supply tightening, there is
talk of an energy crisis in the early
1970s; Nixon abolishes quotas in April
1953 (588-90). Pressure for a new basis
for agreements and warnings from U.S.
experts, but no consensus on need for
action (590-92). Egypts Sadat resolves
on war, late 1972 & early 1973 (592-93).
Saudi Arabias King Faisal agrees to back
Egypt with the oil weapon (593-97). Oil
importers feel pressure (598-99).
October War begins as OPEC delegates
arrive in Vienna to negotiate; oil
companies refuse demands (599-602).
October War brings U.S. airlift to resupply
Israel (603-05). Oct. 16, Kuwait City:
Arab Gulf OPEC nations raise price 70%
(605-06). Oct. 17: Arab oil ministers
announce progressive production cuts
(606-08). Oct. 19: Nixon aid package for
Israel (608). Oct. 20: Arab oil embargo
(608-09). Watergate as factor (609-10).
Conspiracy theories (610-11). Oct. 25:
U.S. nuclear alert to discourage Soviet
intervention (611-12). Oct. 26: ceasefire
holds (612).
Ch. 30: Bidding for Our Life. Lack of
U.S. spare production capacity gives Arab
oil embargo bite (613-15). The age of
shortage; Schumacher as prophet (61516). Gas lines (616-17). Nixon appoints
William Simon energy czar, resists
rationing (617-19). Political pressure on
companies; equal suffering and fair
share principles produce diversion
(619-25). Shah argues for new
conceptual basis for oil prices (cost of
alternative energy) and wins agreement
in Dec. 1973 to $11.65/barrel price (62526). Political efforts to respond to
embargo; Kissingers shuttle diplomacy
(626-29). Feb. 1974 energy conference
in Washington gives birth to the
International Energy Agency (629-30).

Sadat overcomes Assads reluctance and

on Mar. 18, 1974 Arab oil ministers agree
to lift embargo (631-32).
Ch. 31: OPECs Imperium. In the mid1970s OPEC causes shift in economic &
political power (633-34). OPEC tax
redistributes world income; poorest
countries hurt worst (634-36). OPEC an
unruly oligopoly (Raymond Vernon) at
this time, not a cartel (636). Ahmed Zaki
Yamani, Saudi oil minister (639-42). Iran
wants higher oil price, resisted by Saudi
Arabia; U.S. seeks stability; Shah
accedes, 1977 (642-46). Demise of oil
concessions begins in Mar. 1975 when
Kuwait takes over 100% of the Kuwaiti Oil
Company (646-48). 1976 nationalization
of Venezuelas oil industry, moderate
and pragmatic PDVSA created as state
holding company owning several
operating companies (648-50). 1976
agreement on Saudi takeover of Aramco
(651-52). Production-sharing contracts
replace concessions (652).
Ch. 32: The Adjustment. Industrial
nations seek to change objective
conditions: demand & supply, oil
dependency (653-54). Japanese
conservation (654-55). French nuclear
power, coal, and conservation, with
advertising restrictions (655-56). Sen.
Scoop Jacksons attack on oil companies
obscene profits (656-58). Calls for
divestiture (breaking up oil companies)
(658). The question of oil company
profits (658-59). Nixon keeps price
controls on oil (659-60). Alaskan oil
pipeline approved; fuel-efficiency
standards approved (660-61). Carter
chooses James Schlesinger to devise
energy plan National Energy Act;
public skeptical (661-64). Boom time for
exploration, now redirected to
industrialized countries; diversification
due to fears of geological depletion
(664-65). Alaskan pipeline completed,
1977 (665-66). With Tabasco oil & Lpez
Portillos new economic strategy, Mexico
quadruples oil output, 1972-1980 (666-

67). North Sea oil for Norway (1969) and

Britain (1970) (667-70). Oil price
forecasting and the Iron Law linking
economic growth and oil consumption
(670-72).
Ch. 33: The Second Shock: The Great
Panic. Irans social problems (674-75).
Ayatollah Khomeini leads fundamentalist
Islamic opposition (675-78). Fall 1978: oil
exports reduced (678-79). Vacillation in
Washington (679-80). Oil stopped
Christmas Day (680-81). Shah leaves
Iran, Jan. 16, 1979 (682). Regime
collapses, Feb. 1979 (683). Saga of
Jeremy Gilbert, the last Western oil man
from the Fields, the great Iranian
petroleum complex (683-84). Panic:
factors that drive down price from
$13/barrel to $34 (685-87). Japan hit
hard due to dependence on Iranian oil
(688). New importance of spot markets
(the Rotterdam Market) (688). Price
gouging; leapfrog and scramble
(689). Saudi moderation (689-90). Three
Mile Island (691). Gas lines and criticism
of Carter (691-96). Anarchy in the world
oil market; Schlesinger quits cabinet with
speech on world crisis (696-98).
Ch. 34: Were Going Down. Iranian
Hostage Crisis (699-701). Saudi unrest;
Soviet invasion of Afghanistan (701).
Carter Doctrine, Jan. 1980 (701-02).
Prices reach new heights (702). OPEC in
disarray (703-05). Failure of U.S. hostage
rescue mission (705). Background to
Iraq-Iran war: Shatt-al-Arab; Saddam
Hussein (706-09). Iraqs initial attack
(710-11). After highest price ever,
declining demand and restraint bring
down prices (711-14).
Ch. 35: Just Another Commodity?
The greatest boom; Exxon buys into
(1980), then abandons (1982), the
Colony Shale Oil Project on the Western
Slope (715-16). Collapse in demand,
build-up of non-OPEC supply, and Great
Inventory Dump produce oil glut and
falling prices (717-18). OPEC sets

production limits, becomes true cartel

(718-19). OPEC cuts price from
$34/barrel to $29 in Mar. 1983; Saudi
Arabia as swing producer, balances
market (720-21). Oil industry and
companies deintegrate; decentralized
commodity trading replaces integration
as norm (721-24). West Texas
Intermediate and the emergence of
futures contracts in crude oil (724-26).
Era of deregulation leads to aggressive
restructuring of industry (726-27). T.
Boone Pickens pioneers shareholders
value-fueled acquisitions (727-30). Great
financial crises averted: Mexico, Penn
Square/Continental Illinois (730-32).
Mukluk (Alaska), a dry hole (733). Getty
Oil acquired by Texaco (734). Pickens
initiates bidding on Gulf, first major to be
purchased, by Chevron, for $13.2b cash
in Mar. 1984 (734-40). Restructuring
(740-41). Exxon spends $16b on share
buyback (741). U.S. interferes with
European purchase of Soviet natural gas,
early 1980s (742-43). Excess oil capacity
up to 20% of free worlds consumption
oil indeed just another commodity
(743-44).
Ch. 36: The Good Sweating: How
Long Can It Go? OPEC quota cheating
(745-46). British National Oil Co.
abolished (746). Saudis, frustrated,
devise netbacks; price of oil collapses
(747-50), produces Third Oil Shock (75051). Consumers jubilant (752). George
Bush (753-54). On Mideast trip, Bush
defends U.S. oil industry, claims falling
price threatens national security by
making U.S. dependent on imported oil
(755-58). Consensus forms for quotas to
support $17-19/barrel price (758-61).
Saudi oil minister Yamani fired after 24
years, Oct. 1986 (761-63). OPEC quota
system (absent Iraq) holds; $15-18/barrel
price range (763-64). U.S. reflags 11
Kuwaiti tankers, patrols Persian Gulf
(765). Iran-Iraq war ends in stalemate,
1988 (766-67). Venezuelans, Saudis, &
Kuwaitis acquire outlets (767). Priority of

economics over politics? doubtful

(768).
Epilogue. Complacency (769-70).
Iraqs invasion of Kuwait (770-73). Soviet
oil industry (773-74). Preparations for
crisis management (774-75). Oil
companies less sovereign, now merely
large bureaucracies (775-76). Limits of
oil power (777). Environmental
concerns (777-79). Three alternatives:
(1) oil, gas, and coal; (2) nuclear; (3)
conservation (780). Ours the age of oil
(780-81).
Chronology. 1853-1990 (782-83).
Oil Prices & Production. 1861-1990
(785-86).
Notes. 61pp. Oil basics (787-88). Of
interest: Allan Nevins, Study in Power
standard biographical sources for John D.
Rockefeller (789). Mira Wilkins, The
Emergence of Multinational Enterprise:
American Business Abroad from the
Colonial Era to 1914 (1970). In 1919,
David White, chief geologist of the United
States Geological Survey, alarmed at the
widening angle between the flattening
curve of production and the rising curve
of consumption in the United States,
fixed total recoverable reserves at 6.7
billion barrels (801). Irvine H. Anderson,
The Standard-Vacuum Oil Company and
United States East Asian Policy, 19331941 (1975) is a key source on the oil
side (812). Herbert Feis, The Road to
Pearl Harbor: The Coming of War
Between the United States and Japan
(1966) remains the classic diplomatic
history (812). Ronald H. Spector, Eagle
Against the Sun: The American War with
Japan (1985) an excellent source on the
Pacific War (817). Long note on 1942
U.S. rubber famine (819-20). P.H.
Frankel, Essentials of Petroleum: A Key to
Oil Economics (new ed., 1969) though
written in 1946, remains essential to
understanding the oil industry (836).

Documents from the U.S. Espionage Den,

published by Iran.
Bibliography. 26pp. 80 interviews. 4
company archives. 15 government
archives. 34+ manuscript collections. 8
oral histories. Approx. 60 government
documents and 700 books, articles, etc.
28 data sources.
Acknowledgments. 3pp. Seven years
to research and write (876).

Photo Credits. 97 photos.

Index. 32pp.
About the Author. Shattered Peace.
Energy Future. Cambridge Energy
Associates, pres. Lecturer, Harvard
Business School & John F. Kennedy School
of Government at Harvard. B.A., Yale;
Ph.D., Cambridge Univ.