The Prize: The Epic Quest for Oil, Money and Power 9780671502485, 0671502484

Table of contents :
Cover......Page 1
Copyright page......Page 8
Contents......Page 11
List Of Illustrations ......Page 0
The Trust......Page 46
Marcus Samuel's Coup: The Voyage of the Murex, 1892......Page 71
Opening Up The Middle East: Oil in Persia, 1901......Page 146
The Red Line Agreement, July 1, 1928......Page 207
The Great Migration of the 1920s: Mexico's Golden Lane to Venezuela's Lake Maracaibo......Page 237
War in Europe and North Africa......Page 340
War in the Pacific......Page 362
The Great Oil Deals: Middle East Consortia, 1951......Page 425
Alaskan Pipeline and Alternate Routes, Early 1970s......Page 575
1 "Colonel" Edwin Drake, in top hat, stands in front of the first oil well near Titusville, Pennsylvania, in 1859. The title of "Colonel" had been invented to impress the local backwoodsmen, who thought Drake was crazy for trying to drill for oil.......Page 881
4 The Shoe and Leather Petroleum Company, foreground, at Oil Creek, Pennsylvania, in 1865.......Page 882
7 Arthur Bates, an oil dealer in Geneva, Ohio, delivered kerosene—the "new light "—door-to-door from his horse-drawn tank wagon.......Page 883
11 The trust was busted. The headlines the day after the Supreme Court decision of May 15, 1911.......Page 884
14 The boom town of Beaumont, near Spindletop, whose prostitutes were arrested and then displayed on the balcony of the Crosby House. Each woman's fine was announced, and the man who paid it could keep her for twenty-four hours......Page 885
17 The Baku oil fields, set ablaze during the Revolution of 1905. Political and social upheaval eventually drove the Rothschilds and the Nobels out of Russia.......Page 886
21 Henri Deterding, the "pushing fellow" who forged the merger of Royal Dutch with Shell and for the next quarter century was the world's most powerful oil man.......Page 887
24 By 1909, when auto lovers went motoring, no one any longer shouted "Get a horse!"......Page 888
27 After five years of drudgery and disappointment, the engineer George Reynolds (left)— "solid English oak "—finally discovered oil in Persia in 1908, opening up oil development in the Middle East.......Page 889
30, 31 The rapid mechanization of the battlefield in World War I, including the tank and airplane, brought a new mobility to war and made oil an essential strategic commodity.......Page 890
34 America's love affair with the automobile began in earnest in the 1920s when gasoline was abundant—and cheap.......Page 891
36, 37, 38 Oil companies promoted brand names and trademarks in the 1920s to differentiate their products and win customer loyalty.......Page 892
41 Standard Oil of New Jersey (later Exxon) emerged from the breakup of the Standard Oil Trust as America's biggest and most powerful oil company. It was dominated by "The Boss," Walter Teagle, grandson of Rockefeller's original partner.......Page 893
44 Venezuela's Lake Maracaibo became one of the world's great oil sources, even though drilling was considered so risky that oil men joked about going into the fishing business.......Page 894
46 Dad Joiner, promoter and wildcatter, shakes hands with the corpulent Doc Lloyd just after discovering the huge East Texas oil field on October 3, 1930. H. L. Hunt (smoking a cigar) rescued Joiner from financial difficulties—and in the process acquired his immensely valuable leases.......Page 895
50 President Lazaro Cardenas, announcing the expropriation of the foreign petroleum companies in Mexico on March 18, 1938—and fueling the bitter conflict between the producing countries and the international oil industry.......Page 896
53, 54 The opening of the Magdeburg synthetic fuels plant in 1937 (left). Such fuels provided more than half of Germany's total oil supply during the war. The same plant (right) after three thousand bombs were dropped on it by Allied bombers.......Page 897
58 In 1941, the militarist general Hideki Tojo used the American oil embargo as the reason to attack Pearl Harbor. In 1945, with Japan devastated and defeated—and completely out of oil—he tried to commit suicide, unsuccessfully.......Page 898
62 "Pump girls" in London, where, as in America, women took over at gasoline stations and other vital jobs when the men went to war.......Page 899
64 Happy days are here again. Victory meant the end of gasoline rationing in the United States.......Page 900
67 A milkshake maker salesman with vision opened this, the first real McDonald's, in Des Plaines, outside Chicago, in 1955.......Page 901
70 Customers were dazzled by the auto industry's introduction of tail fins in the 1950s, no matter that the engines were "gas guzzlers."......Page 902
73 George McGhee, the State Department's "infant prodigy," promoted the "fifty-fifty" profit split with Middle Eastern producers in 1950 to help save the oil companies from outright nationalization.......Page 903
75 President Dwight Eisenhower, with Secretary of State John Foster Dulles, was so furious with the British-French invasion of Suez that he cut off emergency oil supplies to them and angrily declared that they could "boil in their own oil."......Page 904
78 The intrepid oil journalist Wanda Jablonski, here with Sheikh Shakbut of Abu Dhabi in 1956.......Page 905
80, 81 OPEC's two founding fathers: Abdullah Tariki, the "Red Sheikh" and first Saudi oil minister, and the Venezuelan oil minister, Juan Pablo Pérez Alfonzo.......Page 906
83 Dr. Armand Hammer built a puny, bankrupt oil company into the giant Occidental on the basis of the newly discovered oil riches of Libya.......Page 907
86 Japanese Prime Minister Masayoshi Ohira modeled the "energy conservation look" after the 1973 embargo. Though the fashion never caught on in Japan, energy conservation certainly did.......Page 908
89 The Alaska pipeline, which took five years to win approval to build.......Page 909
91 With the fall of the Shah, the Ayatollah Ruhollah Khomeini was deliriously greeted in Tehran when he returned from exile in February 1979.......Page 910
94 Just after midnight, on Good Friday, March 24, 1989, the supertanker Exxon Valdez went aground in Alaska's Prince William Sound, spilling 240,000 barrels of oil—and giving a great boost to the environmental movement.......Page 911
97 Saddam Hussein, the Iraqi strongman who triggered the first post-Cold War oil crisis.......Page 912
Prologue......Page 13
Part I: The Founders......Page 19
1 Oil on the Brain: The Beginning......Page 21
To "Assuage Our Woes"......Page 22
The Disappearing Professor......Page 23
Price and Innovation......Page 24
The "Colonel"......Page 28
"The Light of the Age"......Page 30
The First Boom......Page 31
Boom and Bust......Page 34
2 "Our Plan": John D. Rockefeller and the Combination of American Oil......Page 37
"Methodical to an Extreme"......Page 38
The Great Game......Page 39
"Now Try Our Plan"......Page 41
"War or Peace"......Page 44
New Threats......Page 45
"The Wise Old Owl"......Page 49
A Marvel to the Eye......Page 52
"Buy All We Can Get"......Page 53
The Upbuilder......Page 56
3 Competitive Commerce......Page 58
"The Walnut Money"......Page 59
The Rise of Russian Oil......Page 60
The Challenge to Standard Oil......Page 63
The Son of the Shell Merchant......Page 65
The Coup of 1892......Page 67
The Alderman......Page 72
"This Struggle to the Death"......Page 73
Royal Dutch......Page 75
"Dutch Obstacles"......Page 77
Markets Lost and Gained......Page 80
Breakouts......Page 82
Patillo Higgins's Dream......Page 84
The Deal of the Century......Page 88
Gulf: Not Saying "By Your Leave"......Page 89
Sun: "To Know What to Do with It"......Page 94
"Buckskin Joe" and Texaco......Page 95
"How Can We Control It?"......Page 97
5 The Dragon Slain......Page 98
The Holding Company......Page 99
The Successor: The Oil Enthusiast......Page 100
"The Red Hot Event"......Page 102
Rockefeller's "Lady Friend"......Page 103
The Trust-Buster......Page 108
The Suit......Page 110
The Dissolution......Page 112
The Liberation of Technology......Page 113
The Winners......Page 114
6 The Oil Wars: The Rise of Royal Dutch, the Fall of Imperial Russia......Page 116
The Jungle......Page 117
Shell Emerges......Page 119
Royal Dutch in Trouble......Page 120
"A Pushing Fellow"......Page 121
The First Step Toward Combination......Page 123
The "British Dutch"—and Asiatic......Page 124
Deterding Triumphant......Page 125
"The Group"—Samuel Surrenders......Page 127
"To America!"......Page 130
Russia in Turmoil......Page 131
Return to Russia......Page 134
7 "Beer and Skittles" in Persia......Page 136
Russia Versus Britain......Page 137
The First Go......Page 140
"Every Purse Has Its Limits"......Page 141
The "Syndicate of Patriots"......Page 142
To the Fire Temple: Masjid-i-Suleiman......Page 144
Revolution in Tehran......Page 147
Racing the Clock......Page 148
The "Big Company": Anglo-Persian......Page 150
8 The Fateful Plunge......Page 152
"The God-father of Oil"......Page 153
"Made in Germany"......Page 154
Enter Churchill......Page 155
Speed!......Page 157
The Admiral Cracks the Nut......Page 158
The Shell Menace......Page 160
Aid for Anglo-Persian......Page 161
A Victory for Oil......Page 162
Part II: The Global Struggle......Page 167
9 The Blood of Victory: World War I......Page 169
The Taxi Armada......Page 170
Internal Combustion at War......Page 172
The War in the Air and at Sea......Page 173
Anglo-Persian Versus Shell......Page 175
"A Dearth of Petrol"......Page 178
The Energy Czar......Page 180
The Man with the Sledgehammer......Page 181
Baku......Page 184
Floating to Victory......Page 185
10 Opening the Door on the Middle East: The Turkish Petroleum Company......Page 186
Mr. Five Percent......Page 187
"A First-Class War Aim"......Page 190
Clemenceau and His Grocer......Page 191
Amalgamation?......Page 193
Reenter Churchill......Page 194
Oil Shortage and the Open Door......Page 196
"The Boss": Walter Teagle......Page 198
Faisal of Iraq......Page 202
The Architect......Page 204
Toward the Red Line......Page 205
11 From Shortage to Surplus: The Age of Gasoline......Page 209
"A Century of Travel"......Page 210
"The Magic of Gasoline"......Page 211
The Tempest in the Teapot......Page 213
The Colonel and the Liberty Bonds......Page 218
Geophysics and Luck......Page 220
The Tycoon......Page 222
The Rising Tide......Page 225
Emerging Competition......Page 226
"Those Sunkist Sons of Bitches"......Page 229
Mexico's Golden Lane......Page 231
General Gómez's Venezuelan "Hacienda"......Page 235
Duel with the Bolsheviks......Page 239
In Search of a United Front......Page 242
Price War......Page 244
13 The Flood......Page 246
The Black Giant......Page 248
Anarchy in the Oil Field......Page 250
The Reformer......Page 254
The Government Acts......Page 257
Stability......Page 260
14 "Friends"—and Enemies......Page 262
The Hand of the British Government......Page 264
"The Problem of the Oil Industry"......Page 265
Discord Within "Private Walls"......Page 267
Nationalism......Page 270
The Shah's New Terms......Page 271
The Mexican Battle......Page 273
"As Dead as Julius Caesar"......Page 279
15 The Arabian Concessions: The World That Frank Holmes Made......Page 282
Bahrain and the New York Sheikhs......Page 284
Ibn Saud......Page 285
The Sorcerer's Apprentice......Page 288
The Negotiation......Page 291
Kuwait......Page 294
The "Sure Shot"?......Page 300
The Blue Line Agreement......Page 301
Discovery......Page 302
Part III: War and Strategy......Page 305
16 Japan's Road to War......Page 307
"Shall We Trust Japan?"......Page 308
The New Order in Asia......Page 309
"Quarantine"......Page 310
Japanese Advance and American Restrictions—The First Round......Page 313
Quiet Conversations......Page 315
Yamamoto's Gamble—"Doubtless I Will Die"......Page 316
Embargo......Page 318
"We Cannot Endure It"......Page 321
"Dwindling Day by Day"......Page 322
Pearl Harbor......Page 325
The One Mistake......Page 327
17 Germany's Formula for War......Page 330
The Chemical Solution......Page 331
Girding for War......Page 334
The Russian Campaign: "My Generals Know Nothing About the Economic Aspects of War"......Page 336
Operation Blau......Page 338
Rommel and the Revenge of the Quartermaster......Page 341
Autarchy and Catastrophe......Page 345
"The Primary Strategic Aim"......Page 348
The Battle of the Bulge: Europe's Biggest Gas Station......Page 350
"Twilight of the Gods"......Page 351
18 Japan's Achilles' Heel......Page 353
"Victory Drunk"......Page 356
"The Adults' Hour"......Page 357
The Battle of the Marus: The War of Attrition......Page 359
"No Sense in Saving the Fleet"......Page 361
The End of the Imperial Navy......Page 364
A Fight to the Finish?......Page 365
The Ambulance......Page 368
19 The Allies' War......Page 370
The Oil Czar: The Mobilization of American Supply......Page 373
Trial by Sea: The Battle of the Atlantic......Page 375
Domestic Push......Page 379
Rationing—Through the Side Door......Page 381
Innovation......Page 384
"The Unforgiving Minute"......Page 386
Part IV: The Hydrocarbon Age......Page 391
20 The New Center of Gravity......Page 393
"The Allies Have the Money"......Page 395
"We're Running Out of Oil!"......Page 397
The Policy of "Solidification"......Page 398
"A Wrangle About Oil"......Page 401
Quotas and Cartels......Page 404
The "Twins"......Page 405
"What Do We Do Now?"......Page 407
21 The Postwar Petroleum Order......Page 411
The Great Oil Deals: Aramco and the "Arabian Risk"......Page 412
Erasing the Red Line......Page 415
Gulbenkian Again......Page 418
Kuwait......Page 421
Iran......Page 422
Europe's Energy Crisis......Page 424
To Market It Goes?......Page 427
No Longer "Far Afield": The New Dimension of Security......Page 429
The End of Energy Independence......Page 430
Landlord and Tenant......Page 433
Venezuela's Ritual Cleansing......Page 435
The Neutral Zone......Page 439
"The Best Hotel in Town"......Page 441
Billionaire......Page 445
"Retreat Is Inevitable"......Page 447
The Watershed......Page 450
23 "Old Mossy" and the Struggle for Iran......Page 452
The Last Chance......Page 454
"Old Mossy"......Page 458
Plan Y......Page 460
Averell in Wonderland......Page 461
"Stand Firm, You Cads!"—The Farewell to Abadan......Page 464
"A Splutter of Musketry"......Page 466
"Luck Be a Lady Tonight"......Page 469
"A Group of Companies"......Page 472
The Oil Cartel Case......Page 474
Building the Consortium......Page 477
24 The Suez Crisis......Page 481
The Nationalist: The Role Finds Its Hero......Page 482
Code Word "de Lesseps": Nasser Moves......Page 485
"We Had No Intention of Being Strangled to Death"......Page 487
At the "Rhineland" Again—Twenty Years Later......Page 488
Force Applied......Page 491
Purgatory......Page 493
The "Oil Lift" and the "Sugar Bowl": Surmounting the Crisis......Page 495
The Exit of "Sir Eden"......Page 497
The Future of Security: Pipelines Versus Tankers......Page 498
To End the Suez Schism......Page 499
25 The Elephants......Page 501
A New Napoleon......Page 503
Mattei's Greatest Battle......Page 505
Japan Enters the Middle East......Page 507
Even the Americans.........Page 509
Nasser Ascendant......Page 510
Juan Pablo Pérez Alfonzo......Page 512
The "Red Sheikh"......Page 515
Competitive Pressures......Page 516
The Arab Oil Congress......Page 518
"Regards to All, Wanda"......Page 519
26 OPEC and the Surge Pot......Page 521
T Square Versus Slide Rule......Page 522
"We've Done It!"......Page 524
OPEC in the 1960s......Page 525
"The New Frontier"—and More Elephants......Page 527
The Libyan Jack-Pot......Page 529
Mattei's Last Flight......Page 532
The New Competitors......Page 533
Walking the Tightrope—Iran Versus Saudi Arabia......Page 534
"Us Independent Oil Suckers"......Page 537
National Security and "a Nice Balance"......Page 539
"A Very Healthy Domestic Industry"......Page 540
The Explosion......Page 543
Old King Coal Deposed......Page 545
The Conversion of Europe......Page 546
Japan: No Longer Poor......Page 547
The Struggle for Europe......Page 548
Courting the Consumer......Page 550
The New Way of Life: "Six Sidewalks to the Moon"......Page 552
Crisis Again: "A Recurring Bad Dream"......Page 556
The Cassandra at the Coal Board......Page 560
Part V: The Battle For World Mastery......Page 563
28 The Hinge Years: Countries Versus Companies......Page 565
The Anglo-American Retreat......Page 567
The End of the Twenty-Year Surplus: To a Seller's Market......Page 569
Environmental Impact......Page 570
The Alaskan Elephant......Page 571
The Doctor......Page 576
The Libyan Squeeze......Page 579
Leapfrogging Prices......Page 582
Participation: "Indissoluble, like a Catholic Marriage"......Page 585
The Hinge Years......Page 587
29 The Oil Weapon......Page 590
The United States Joins the World Market......Page 591
"The Wolf Is Here"......Page 592
The Secret: Sadat's Gamble......Page 594
The Oil Weapon Unsheathed: Faisal Changes His Mind......Page 595
Nervous Leaders......Page 599
September 1973: "Pressure All Around"......Page 600
Nothing Further to Negotiate......Page 601
Sadat's Surprise......Page 604
"The Third Temple Is Going Under"......Page 605
Embargo......Page 608
The Third-Rate Burglary......Page 611
Alert......Page 613
"The Loss"......Page 615
Panic at the Pump......Page 617
"Beef Prices"......Page 619
"Equal Misery"......Page 621
A New World of Prices......Page 627
Alliance Strained......Page 628
Sheathing the Oil Weapon......Page 632
31 OPEC's Imperium......Page 635
Oil and the World Economy......Page 636
The Saudis Versus the Shah......Page 638
Yamani......Page 641
America's Strategy......Page 644
Kuwait and "Our Friends"......Page 648
Venezuela: The Kitty Cat Died......Page 650
Saudi Arabia: The Concession Surrendered......Page 653
32 The Adjustment......Page 655
Nations Respond......Page 656
"Obscene Profits"......Page 658
The United States Energy Policy: "Chinese Water Torture"......Page 661
Boom Times......Page 666
New Supplies: Alaska and Mexico......Page 667
The North Sea: The Biggest Play of All......Page 669
"The Crunch"......Page 672
Disillusion and Opposition......Page 676
"Doing the 40–40"......Page 678
"Like Snow in Water"......Page 679
"Torrents of Blood"......Page 682
"I Am Feeling Tired"......Page 683
The Last Man Out......Page 685
Panic Begins......Page 686
Force Majeure......Page 689
Leapfrog and Scramble......Page 691
"Living Dangerously"......Page 693
Petroleum and the President......Page 695
"The Worst of Times"......Page 696
The Cat-and-Mouse Dialectic......Page 698
"The World Crisis"......Page 700
34 "We're Going Down"......Page 701
"Death to America"......Page 703
The Bazaar......Page 705
The Second Battle of Qadisiyah: Iraq versus Iran......Page 708
The End of the Road......Page 713
35 Just Another Commodity?......Page 717
The Fundamentals......Page 719
Finally—the Cartel......Page 720
"Our Price Is Too High..."......Page 722
The Commodity Market......Page 723
From Eggs to Oil......Page 726
New Oil Wars: The Shootout at Value Gap......Page 728
The Trigger......Page 729
The Mexican Weekend......Page 732
Dr. Drill......Page 735
The Death of a Major......Page 736
Shareholders' Value......Page 742
The New Security......Page 744
36 The Good Sweating: How Low Can It Go?......Page 747
OPEC's Deepening Dilemma......Page 748
Market Share......Page 750
The Third Oil Shock......Page 752
"A Little Action"......Page 753
George Bush......Page 755
"I Know I'm Correct"......Page 757
"Hara-Kiri" and $18 a Barrel......Page 760
Playing It by Ear......Page 763
Price Restored......Page 765
Iran Versus Iraq: The Tide Turns......Page 766
Epilogue......Page 771
Iraq Moves......Page 772
Toward the Future......Page 775
A New Order......Page 777
The Third Environmental Wave......Page 779
The Age of Oil......Page 782
Chronology......Page 784
Real Crude Oil Prices (1990 base year)......Page 787
Real U.S. Gasoline Prices (1990 base year)......Page 788
Upstream, Downstream, All Around the Stream......Page 789
1 Oil on the Brain: The Beginning......Page 790
2 "Our Plan": John D. Rockefeller and the Combination of American Oil......Page 791
3 Competitive Commerce......Page 793
4 The New Century......Page 794
5 The Dragon Slain......Page 795
6 The Oil Wars: The Rise of Royal Dutch, the Fall of Imperial Russia......Page 797
7 "Beer and Skittles" in Persia......Page 798
8 The Fateful Plunge......Page 799
9 The Blood of Victory: World War I......Page 800
10 Opening the Door on the Middle East: The Turkish Petroleum Company......Page 802
11 From Shortage to Surplus: The Age of Gasoline......Page 804
12 "The Fight for New Production"......Page 806
13 The Flood......Page 808
14 "Friends"—and Enemies......Page 809
15 The Arabian Concessions: The World That Frank Holmes Made......Page 811
16 Japan's Road to War......Page 813
17 Germany's Formula for War......Page 816
18 Japan's Achilles' Heel......Page 819
19 The Allies' War......Page 820
20 The New Center of Gravity......Page 824
21 The Postwar Petroleum Order......Page 826
22 Fifty-Fifty: The New Deal in Oil......Page 828
23 "Old Mossy" and the Struggle for Iran......Page 829
24 The Suez Crisis......Page 832
25 The Elephants......Page 835
26 OPEC and the Surge Pot......Page 837
27 Hydrocarbon Man......Page 838
28 The Hinge Years: Countries Versus Companies......Page 839
29 The Oil Weapon......Page 841
30 "Bidding for Our Life"......Page 842
31 OPEC's Imperium......Page 843
32 The Adjustment......Page 844
33 The Second Shock: The Great Panic......Page 845
34 "We're Going Down"......Page 846
35 Just Another Commodity?......Page 847
36 The Good Sweating: How Low Can It Go?......Page 848
Epilogue......Page 849
Interviews......Page 850
Archives......Page 852
Oral Histories......Page 853
Government Documents......Page 854
B......Page 856
C......Page 858
D......Page 859
F......Page 860
G......Page 861
H......Page 862
J......Page 864
K......Page 865
L......Page 866
M......Page 867
N......Page 868
Q......Page 869
R......Page 870
S......Page 871
U......Page 872
W......Page 873
Data Sources......Page 874
Acknowledgments......Page 876
Photo Credits......Page 879
A......Page 913
B......Page 915
C......Page 916
D......Page 918
E......Page 919
F......Page 920
G......Page 921
H......Page 922
I......Page 923
K......Page 925
L......Page 926
M......Page 927
N......Page 928
O......Page 930
P......Page 933
R......Page 934
S......Page 937
T......Page 940
W......Page 942
Y......Page 943
Z......Page 944
About the Author......Page 945