How did we get so hooked on oil?
Who dug the first oil well?
Colonel Edwin Drake in 1850s Pennsylvania. Drake wasn’t a real colonel, he was an unemployed railroad conductor who wangled a job at the Pennsylvania Rock Oil Company after meeting its owner at a hotel. He was sent to Titusville, Pennsylvania, to buy up “Seneca oil”, petroleum that bubbled up out of creek beds and was used by Seneca Indians to treat toothache. Drake acquired a steam-powered drill from friends in the booming salt-mining industry and on August 28, 1859, he struck oil nearly 70ft down, selling the first barrel for $40. We haven’t stopped pumping since.
So did Drake start Big Oil?
He failed to patent his drilling technique, or even buy the land around his first well, and eventually died in poverty. More successful was Dr Bill Levingston – not a real doctor, not really called Bill Levingston – who sold a combination of laxative and Seneca oil that he claimed would cure cancer. A notorious con man and bigamist, widely known as “Devil Bill”, he even ripped off his kids. “I cheat my boys every chance I get,” he boasted. “I want to make ’em sharp.” It worked. His son John D Rockefeller founded Standard Oil in 1870 and became the world’s first billionaire.
How did Rockefeller get going?
With a $1,000 loan from his father, who gouged him on the interest rate, demanding 9%. Rockefeller went on a rampage of acquisitions in this chaotic new industry. By making secret deals with the railroad barons, he undercut competitors on transport costs, snapping them up when they went bust.
Was it just in America?
By 1879 Rockefeller controlled 90% of the oil refining in the world. Soon, ambitious types everywhere were trying to emulate his success. Banking heir Alphonse Rothschild and Ludvig Nobel – brother of the dynamite-inventing, prize-endowing Alfred – struck oil when Russia opened up the Caspian Sea to prospectors. They built tankers to ship black gold to the Far East through the Suez Canal. The shipping firm they hired, M Samuel, became Shell in 1907 after teaming up with a Dutch drilling crew in Borneo.
What about Saudi Arabia?
J Paul Getty, Oxford grad, polyglot and young millionaire, won out in the Gulf by being highly educated. He spoke fluent Arabic, and in 1949 persuaded King Ibn Saud to accept $9.5m in cash, a guaranteed income of $1m a year and a royalty of 55 cents a barrel. Getty struck Saudi oil in March 1953 and eventually increased production to 16 million barrels a year, making him one of the world’s richest men. “My formula for success,” he said, “is rise early, work late and strike oil.”
How did oil become so ubiquitous?
Petroleum was distilled into kerosene and burnt as lamp oil – which, incidentally, saved the whales from extinction. Before kerosene, blubber was best. But in 1879 Thomas Edison unveiled his electric light bulb, which could be powered by steam engines in power stations, using any number of fuel sources. The dominance of oil looked shaky. Luckily for the oil men, German engineer Karl Benz won the first patent for a reliable two-stroke internal combustion engine a few months later. It ran on petroleum derivative gasoline.
And we all lived happily ever after?
Not exactly. Internal combustion powered the biggest leap in global living standards in history. However, burning oil releases carbon into the air. This gathers in the upper reaches of the atmosphere, trapping the sun’s heat – the greenhouse effect. This makes the planet warmer, melting ice caps and glaciers, which raises sea levels. It’s also having weirder effects, including reducing the amount of wind by evening out the global temperature, so cool air isn’t sucked into the space created by rising hot air – which is what wind is.
Could we just “leave it in the ground”?
That’s what world leaders agreed at Cop26 this week. Off stage, though, US Secretary of State Antony Blinken got busy urging the UAE to pump more. Barack Obama took a similar line. Days after putting his signature to the Paris Climate Accords in 2015, he signed off on a 750% boost in US oil exports. He boasted to a Texas oil gala in 2018: “Suddenly America is the largest oil producer. That was me, people. Say thank you.”
Shouldn’t we all be less spoilt about it?
Reliable access to power isn’t just Netflix and charging your phone for selfies. There are whole sectors of the economy that can’t be run any other way. German chemicals giant BASF calculates that if it converted its enormous Ludwigshafen plant to run on renewably generated electricity rather than gas, it would use up 10% of all the renewable power in Germany. The company’s CEO, Martin Brudermüller, believes electrifying the chemicals industry would take almost as much power as the whole country currently consumes, renewable or otherwise.
Will renewables fix everything?
The “bizarre paradox” of renewables, says Dominic Lawson in The Sunday Times, is that most of the world’s solar panels and wind turbines are made in China, which enjoys a cost advantage because it powers its factories with coal. And it’s much dirtier and more dangerous to mine the minerals needed for wind turbines (Chinese rare earth metals) or batteries (Congolese cobalt) than to drill for oil.
So what does the future look like?
Bar a few happy exceptions, there is still no fuel source that matches oil for cost and reliability. Instead of beating ourselves up about our highly enjoyable and comfortable lives, perhaps we ought to be grateful to have lived through the oil age – an age of abundance, comfort and relative peace. Whatever the next age is, it’s unlikely to be so straightforward.