Oil - The Engine of Progress and Power

This work overviews the critical role oil has played throughout history. It traces oil's journey from its early applications in ancient societies to its transformative impact during the Industrial Revolution, which spurred major technological and economic shifts. Highlighting key figures and events—such as the rise of Rockefeller's empire and pivotal moments in global conflicts—the narrative examines how oil has driven both progress and strife. Additionally, the overview discusses oil's lasting influence on geopolitics and modern economies, while also considering the ongoing debates about its future in a rapidly changing energy landscape.

INTRODUCTION

Every day, we unknowingly encounter the pervasive influence of oil in various aspects of our lives. Whether sipping water from plastic bottles, enjoying coffee from disposable cups, or commuting in gasoline-powered cabs, these seemingly ordinary activities are directly or indirectly linked to oil.

Countries with access to oil have a significant impact on global geopolitics and the economy. Oil stands as one of the paramount driving forces behind economies worldwide. Daily fluctuations in the oil market affect factors like the dollar to euro exchange rate. The historical narrative of oil is rife with myths, bloodshed, and monumental conflicts. It has propelled nations to the pinnacle of historical achievements while simultaneously precipitating their downfall. This essay seeks to illuminate the profound impact of oil on shaping economies and transforming the lives of people globally.

Despite the common perception that oil is a relatively recent discovery of the 19th century, its presence on Earth has been acknowledged for centuries. In the expanse of modern-day Iraq, oil naturally used to come to the surface, although its utilization was initially limited. Mesopotamians employed this resource for constructing structures and sealing ship hulls. Conversely, in Europe, there was a lack of understanding regarding the practical applications of oil, leading to attempts at using it for medicinal purposes.

During this period, many scientists deemed oil unsuitable due to its rapid combustion, overlooking its potential advantages. By the Middle Ages, the knowledge of handling oil expanded, particularly in regions like Arabia and Persia, where it was utilized as a component for crafting bombs. In the Greek, oil also was used as flamethrowers.

Even in North America, oil was used, albeit for different purposes. Indigenous peoples extracted oil for rituals, incorporating it into their war paint. Hence, oil has been a familiar entity throughout history, serving diverse roles in pre-industrial times, functioning as medicine, weaponry, and a ritualistic element. However, the absence of advanced technologies during those eras hindered oil from realizing its full potential. The Industrial Revolution triggered a significant reliance on oil, marking a transformative era in human history. In the context of illuminating spaces, humanity had traditionally utilized a limited array of sources such as torches, lamps, and candles. Initially, these were exclusive to the affluent, as the impoverished struggled to afford such luxuries. The First Industrial Revolution, a turning point in the development of production and manufacturing processes, laid the foundation for the eventual emergence of the petroleum industry. Beginning in the late eighteenth century, this era witnessed significant advances in metallurgy, culminating in the revolutionary invention of steel. Sir Henry Bessemer's breakthrough in the production of steel in the mid-19th century played a crucial role in facilitating its mass production and subsequent widespread use. Steel's inherent qualities of strength, durability, and versatility made it the material of choice for building critical infrastructure such as bridges, railroads, and industrial machinery.

As the Second Industrial Revolution unfolded, steel became the linchpin, providing a vital foundation for oil drilling, transportation, and refining processes. This interconnected evolution demonstrated the symbiotic relationship between technological advances and industrial revolutions. Notably, the economic and geopolitical landscape was shaped by the exploitation of colonies in search of resources and markets, a characteristic common to both industrial eras.

The rapid growth of oil production became evident, particularly in Pennsylvania, where daily barrels surged from 1,200 to 5,000. This surge in production led to the establishment and fortification of the oil industry. Pennsylvania even introduced a new unit of measurement, the Barrel, with a volume of 159 liters, traditionally used for transporting liquids like alcohol. However, England, which had gained an initial advantage in the First Industrial Revolution, experienced a relative decline during the Second Industrial Revolution due to lack of direct access to oil. As other countries rapidly industrialized, England faced increasing competition and witnessed its influence wane. Without realizing it, England contributed to the rapid development of other countries and the decline of her own.

As mentioned above, until the 19th century, people used candles or torches as light that did not shine so brightly and were very expensive. Moreover, whale oil was used as an energy source to create them, but the overexploitation of whales in the North Atlantic has led to an urgent need for an alternative. In response to this demand, Canadian scientist Abraham Gesner began to search for alternative energy sources. His experiments included distilling Canadian asphalt to a liquid state, resulting in a non-toxic liquid that burned efficiently - kerosene. Kerosene has found its main role as a substitute for whale oil in lighting. Moreover, kerosene lamps were many times brighter and cheaper. This groundbreaking invention marked the birth of the oil industry.

In 1859, Edwin Drake made a groundbreaking discovery, devising a method to extract oil from Pennsylvania wells and subsequently establishing Seneca Oil. Unfortunately, this venture did not lead to success; rather, it ended in bankruptcy, leaving Drake in poverty at the time of his death. In stark contrast, John D. Rockefeller did not innovate a particular technology but exhibited remarkable skill in creating efficient systems. He became the industry leader in the unprecedented expansion of the oil refining industry. Recognizing that consumers sought not just oil but the myriad products derived from it, Rockefeller devised a forward-thinking logistics system. His business strategy went beyond mere extraction and refining, focusing on the crucial element of monopolistic control over logistics. Rockefeller strategically acquired both small and large corporations, founding Standard Oil by the age of 31. By the age of 40, he had become a billionaire and monopolist, albeit attracting significant animosity for his harsh business practices.

In 1904, Ida Tarbell, a journalist who previously exposed Rockefeller’s past driven by personal vendetta with newspaper campaigns to backlash against his public face, published a revealing book, laying bare Rockefeller's concealed schemes and dark deeds. This publication attracted the close attention of the government, as Rockefeller had a profound influence on both the economy and politics. The American government has enacted the Sherman Antitrust Act, designed to stimulate competition and curb monopolies. Rockefeller became one of the first victims of this law, and his company was overtaken by the division into 34 companies. Notably, conglomerates like Exxon and Chevron emerged as fragments of the Rockefeller empire, symbolizing the government's attempt to dismantle monopolistic control. This turn of events, mandated by the antitrust law, marked a significant shift in the power dynamics of the oil industry. The enormity of this situation even led him to lose all his hair, a stark departure from the adversities he had faced previously, such as the sudden drop in oil prices in 1885. In 1885, the oil industry faced a significant downturn as oil prices dropped from $30 to $8 per barrel. The outlook for oil seemed bleak, as this commodity was on the verge of losing relevance. However, at the turn of the 20th century, a revolutionary event occurred that changed the world — the invention of the internal combustion engine. This engine, especially the diesel variant, has become the driving force behind the growing new economy. In 1908, the automotive landscape underwent a seismic shift with the release of the Ford Model T, a car that embodied the innovative vision of its creator Henry Ford. Although Ford did not invent the car itself, his role in revolutionizing its production and accessibility to the masses is difficult not to appreciate.

A key factor in Ford's triumph was the vast American market, providing ideal conditions for mass production and a growing consumer base. Unlike early German inventors such as Karl Benz and Gottlieb Daimler, whose production scope was narrower, Ford's focus on large-scale production overcame initial difficulties, making the Ford Model T widely available.

Ford's commitment to innovative methods went beyond production methods. In 1926, he implemented the pioneering 8-hour 5-day workweek policy, setting a new standard for labor practices in the automotive industry and beyond. This initiative has not only improved working conditions, but also increased productivity by introducing days off and motivating employees.

The introduction of the conveyor belt, another Ford innovation, simplified the production process. Vehicles were moved along the assembly line, allowing workers to effectively focus on specific tasks.

In addition to manufacturing, Ford influenced the workplace environment by introducing a corporate cafeteria, an unconventional move for the time. Although this is commonplace today, this decision has had a profound impact on employee well-being and productivity by reducing the time spent on lunch breaks.

The automobile has seamlessly woven itself into the fabric of modern life, evolving from a mere mode of transportation to an indispensable component of daily existence. In an era marked by an influx of cars, an overwhelming reliance on gasoline emerged. Consequently, oil became synonymous with progress, opulence, and extravagant wealth. What was once a seemingly inconsequential commodity transformed into the economic engine driving prosperity and a potent instrument of geopolitical influence.

This paradigm shift became glaringly evident during the First World War in 1914, a conflict that witnessed humanity transitioning from cavalry charges to tank warfare, aerial combat, and eventually the ubiquitous presence of cars. The war, marked by inhumane tactics and unprecedented human losses, was, in part, fueled by the strategic importance of oil. Nations with access to oil reserves wielded considerable power, dictating terms and instigating conflicts. The carnage of the war, particularly in Europe, underscored the critical role of oil in shaping global events.

The importance of oil as a geopolitical tool continued into World War II. The Battle of El Alamein, a pivotal engagement, was triggered by Germany's pursuit of control over Middle Eastern oil resources. Similarly, Japan, lacking indigenous oil supplies, sought to secure access through territorial expansion. The infamous attack on Pearl Harbor in 1941, while primarily aimed at neutralizing the US Pacific Fleet and territorial expansion, also had a fundamental motive – securing access to vital oil resources in Southeast Asia. Stalingrad also played a crucial role in World War II. Hitler's ambition to capture Stalingrad stemmed from the desire to gain access to the oil deposits of the Caucasus and the Caspian Sea. The battle for Stalingrad became emblematic of the broader struggle for control over vital resources, as nations fought for supremacy in the oil-rich regions.

The major conflicts of the last century were driven by nations without access to oil attacking those possessing it, highlighting the crucial role of oil as a catalyst for warfare and geopolitical tensions.

After the end of the war, the world faced the challenges of the post-war crisis, and amid this global confusion, the United States stood out as a beacon of economic power which was linked to strategic utilization and control of oil resources. The post-war period came with a significant surge in oil demand with rapid industrial expansion across sectors like transportation, manufacturing and technology, urbanization, and an increase in the number of car owners who contributed to the increase in oil consumption. Subsequently, recognizing the urgent need for capital to rebuild the war-torn economy, the United States also played a key role by providing financial assistance. This has not only helped countries in distress but also strengthened the international standing of the US dollar.

As a result, the dollar has become the global currency influencing most transactions around the world. The American economy was experiencing rapid growth, which led to an increase in living standards not only in the United States but also in all Western European countries. The Marshall Plan, for example, was the catalyst for an "economic miracle" in Italy, marked by rapid industrialization and modernization, which led to a significant annual increase in production of more than 10% in 50-60 years. Industries such as the automotive, chemical, and computer industries flourished, which led to the emergence of cultural symbols such as the iconic Vespa scooter and everyone's favorite pizza.

These transformative economic shifts also paved the way for the emergence of youth culture during the "glorious thirty years". Young people have found opportunities for artistic expression, forming a vibrant cultural landscape. In the United States, the baby boomer generation had a significant influence, defining cultural and social trends like rock and roll music, rebellious fashion, and an all-encompassing spirit of nonconformism. Undoubtedly, the key role of oil in ensuring global progress is evident in various sectors. From medicine and healthcare to the food industry and transportation, oil plays a crucial, though sometimes overlooked, role in shaping our daily lives.

Despite the ongoing debate around the possibility of humanity abandoning oil, fueled in part by innovations led by visionaries such as Elon Musk with the development of the electric vehicles industry, this is unlikely to happen in the near future. Therefore, judging the future of oil should not be approached with a final dot, but rather with an ellipsis, recognizing the complex and evolving nature of our energy landscape.

It is extremely important to recognize that historically oil has not been without its drawbacks, and destructive wars have served as a harsh reminder of its dark side in the last century. As we move forward, it is important to hope that the role of oil in the coming years will be characterized by benefits rather than the conflicts that have marred its history.