There is not much market for reviews of books published almost a decade and a half ago, so without further ado, my thoughts on The Prize, by Daniel Yergin. This evaluation is overdue because I started reading the book when I bought it, back in 1997. I put it down around page 400 (which is a little more than halfway), so this review is likely, very likely, to be stronger on the second half of the book.
Yerginâ€™s subtitle is The Epic Quest for Oil, Money & Power, which gives both theme and thesis. The title, if I am remembering an early part of the book correctly, comes from a statement made about oil by Winston Churchill: “The prize was mastery itself.â€ The argument is that understanding oil is central to understanding the twentieth century and, by extension, the world today. To complaints that the war in Iraq is “all about oil,â€ the only proper answer is “Of course.â€ The last centuryâ€™s major conflicts, and many of its smaller ones, were driven by oil, determined by oil, or both. Without an understanding of oil, much of the period will remain opaque.
Yergin paints (and not in watercolor) on a large canvas, but he is not content with broad strokes. Instead, he conveys many details, deftly chosen anecdotes and key quotations from important sources. For an 800-page book of history, itâ€™s a page-turner. He starts with a detailed sketch of how the oil industry began, in the woods of western Pennsylvania, where “rock oilâ€ was first collected, for medicines and then for kerosene, as a source of light, not fuel. The first successful oil drill led promptly to the first boom, and then the first bust. Itâ€™s a cycle the industry has struggled with ever since. Yergin soon introduces John D. Rockefeller, and he follows the creation, supremacy and dismemberment of Standard Oil in considerable detail. (John D., incidentally, was probably the biggest beneficiary of the breakup of the Standard Oil Trust. Another reason I thought breaking up Microsoft was the way to go, but thatâ€™s another story.) For the legacy of Standard Oil reaches down unto the present day, both in the companies that loom large in the business that were once units of Standard Oil (Exxon and Chevron, to name just two), and in the practices from integration to price-cutting that were pioneered by the octopus of 26 Broadway.
Another early center of the oil business that commands much attention is Baku, once in Imperial Russia, then the Soviet Union and now independent Azerbaijan. The Nobel fortune, Royal Dutch/Shell and other important aspects of the European oil industry either started or were shaped by events in and around Baku. (One Iosif Dzhugashvili got his start as a labor agitator in the Baku oil fields.) Soon, however, oil was a global industry. Gushers in Texas, Dutch explorers in Sumatra and speculators in the sands of Arabia are the springs of the world oil business as we know it today. Yergin gives a solid overview, laced with tales of the larger-than-life personalities the industry either drew or created.
The research is impressive, too. Much is drawn from period publications, personal papers, official archives and, for later periods, personal interviews with the people involved. The list of interview subjects covers the top legue of leaders and policy-makers in global oil–president of Exxon International, Nigeriaâ€™s oil minister, deputy secretary general of OPEC, chairman of British Petroleum, and about 75 more at the same level. Itâ€™s an account told with an insiderâ€™s knowledge but a historianâ€™s perspective.
Historyâ€™s turning points appear, too. Churchillâ€™s decision to convert the British navy from coal to oil. Rommelâ€™s inability to get enough oil in North Africa. Eisenhowerâ€™s choice to give gasoline to Montgomeryâ€™s solidification of Allied lines in France, instead of Pattonâ€™s drive for a rapid crossing of the Rhine. Imperial Japanâ€™s loss of oil supplies to American submarines. The Suez crisis. And on through the second half of the twentieth century.
There are interesting tidbits. Given current events, much is made of American involvement in the fall of Iranian leader Mohammed Mossadegh. One thing I did not know was how strong the communist party in Iran was at that time, and the fact that as Mossadegh became more erratic, the Soviets moved in a new ambassador, the same man who had been Soviet ambassador when communists seized power in Czechoslovakia in 1948. I had also only been dimly aware that the Soviets had occupied swathes of Iran after World War II.
I learned more about the formation of OPEC and the rise of the spot market.
The book was published at a particular moment: in 1991, after Iraqi forces had been dislodged from Kuwait, but before the coup against Gorbachev and the subsequent collapse of the Soviet Union. This makes it an interesting artifact of perceptions at that time.
One of the bookâ€™s virtues is that it does not read as if history were an arrow pointing to the writerâ€™s present position. Yergin is too smart for that, and his knowledge of the cycles in the oil business too encyclopedic. Interesting, too, are the things that are not in the book. Global warming appears once, in the epilogue, as part of the challenges of the third wave of environmentalism. India does not appear after its independence. China is mentioned only in passing after its role as a battlefield in World War II. If Yergin were adding another 150 pages to bring The Prize up through the present, I suspect that all three would see a significant increase in importance.
There would probably also be a great deal more about Russia. Part of the gap is that the archives were surely closed in the mid- to late 1980s when Yergin was doing the research for the book. The history of Soviet oil was secret. He does cite the intentions of the Soviet oil industry as a likely shaper of the global picture in the 1990s, but itâ€™s significant that he thinks about it as the Soviet industry. When the book was published, it had less than a year to continue in its Soviet form. Another reminder of how very few people recognized that the end was at hand.
Itâ€™s a thorough, thought-provoking book, one that delivers a convincing argument about part of how the world works, what that means for political leaders, and what citizens of the industrial world have to come to grips with. After sitting on my bookshelf for more than seven years, it rewarded renewed attention.