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This chapter is from the book

Natural Gas Revolution, The: At the Pivot of the World's Energy FutureNatural Gas Revolution, The: At the Pivot of the World's Energy Future

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This chapter is from the book

This chapter is from the book 

Natural Gas Revolution, The: At the Pivot of the World's Energy FutureNatural Gas Revolution, The: At the Pivot of the World's Energy Future

Learn More Buy

Hydrocarbons: From the Beginnings to Maturity

Today our lives depend so fully on energy derived from hydrocarbons that it is almost impossible to realize how recently these energy sources began to play a significant role in human history. Coal’s dominance gave way to oil due in large measure to oil’s role in transportation. Today, oil rules the energy day and captures our geopolitical attention. A Russian engineer drilled the world’s first oil well in 1848, in Baku on the Caspian Sea. Baku was producing almost the entirety of the world’s oil supply around 1860. Today, as the capital of Azerbaijan, Baku continues to be an important hub of hydrocarbon production and transportation. In the United States, oil collected from surface seeps was first used as an ingredient in patent medicine around 1850, but some innovators recognized oil’s potential as a source of energy for lighting.

The first oil well in the United States was drilled in Titusville, Pennsylvania, in 1859 by “Colonel” Edwin Drake; it set off the first American oil boom.8 The following decades saw a competition among several players. John D. Rockefeller’s Standard Oil was big in the United States, and the Swedish Nobel family came to be the most important players around Baku. The Nobels were soon joined by a succession of other non-U.S. firms, with the French Rothschilds also playing a prominent role.

It is not too much to say that crude oil made the automobile and that the automobile made oil one of the world’s most important commodities. Although it was not the first country to drill, the United States quickly came to lead world production. Over the 1900 to 1950 period, the United States produced more than half of the world’s oil. The bounty of U.S. oil played a critical role in both world wars. Within days of the 1918 armistice, the French Senator Victor-Henri BĂ©renger stated, “Oil, the blood of the earth, has become the blood of victory.” Not to be outdone by French metaphors, Earl Curzon of England remarked that the Allies had “floated to victory on a wave of oil.”9 Although obtaining some oil from Mexico and Persia, the real source of the blood, or wave of victory, came from the United States, which supplied 80% of the Allies’ oil in the last year of World War I.10 By contrast, Germany had sufficient coal and natural gas but could draw only on Romania for a secure supply of oil.

Oil from the United States played a similar dramatic role in the winning of World War II, as Table 1.2 shows. Germany had adequate supplies of coal, outproducing every other combatant, even able to convert coal and natural gas to oil and then to gasoline. Nonetheless, the Allied powers outproduced the Axis collective by 63%. But with the war truly being a world war, navies and armies could only get to the front by using oil power, not coal. It was in crude oil production and availability that the Axis suffered the most serious disadvantage. Collectively, the Allies outproduced the Axis in oil by a factor of more than 15. Of that total Allied production, the United States contributed 80%, as it also did in World War I. So if the Allies in World War I rode to victory on a wave of oil, the Allies got to and won World War II on the strength of its massive superiority in crude oil, which was overwhelmingly provided by the United States.

Table 1.2. Coal and Crude Oil Suppliers in World War II (Millions of Metric Tons)

Allies

USA

USSR

UK

Canada

Total

Coal

2,149.7

590.8

1,441.2

101.9

4,283.6

Crude oil

833.2

110.6

90.8

8.4

1,042.0

Axis Powers

Germany

Italy

Hungary

Romania

Japan

Total

Coal

2,420.3

16.9

6.6

1.3

184.5

2,629.6

Crude oil

33.4

0.2

3.2

25.0

5.2

67.0

Source: John Ellis, World War II: A Statistical Survey, New York: Facts on File, 1993. Coal figures are from Table 79, and crude oil figures appear in Table 81.

Note: Approximately two-thirds of German oil production was in the form of synthetic oil derived from coal or natural gas.

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