  THE WORLD-STRUGGLE FOR OIL Some BORZOI Books Midwinter, 1924 SOCIOLOGY AND POLITICAL THEORY THE WORLD-STRUGGLE FOR OIL Translated from the French of Pierre l'Espagnol de la Tramerye by C. LEONARD LEESE pic NEW YORK ALFRED · A · KNOPF MCMXXIV COPYRIGHT, 1924, BY ALFRED A. KNOPF, INC. Published, February, 1924 Set up, electrotyped, and printed by the Vail-Ballou Press, Inc., Binghamton, N.Y. Paper furnished by W.F. Etherington & Co., New York. Bound by H. Wolff Estate, New York. MANUFACTURED IN THE UNITED STATES OF AMERICA CONTENTS PART I "WHO HAS OIL HAS EMPIRE!" The question of oil has become one of the most vital in all countries. Its importance is such that even the most solid political alliances are subordinate to it. The Great Powers have all an "oil policy." The United States, where the most powerful trust is an oil trust—the Standard Oil Company—the United States, which control 70 per cent. of the oil production of the world, have decided not to leave the question to private initiative alone, but to start a vigorous oil policy both at home and abroad. The American Senate recently decided to create the "United States Oil Corporation to develop new petroleum fields," while Mr. Bedford, Chairman of the Board of Directors of the Standard Oil Company, asked the Government to lend its support to any Americans who were soliciting oil concessions throughout the world. This support, which even Wilson—hostile to trusts as he was—did not refuse, was granted very energetically by Mr. Harding: three European States have just had experience of it. Britain, with her usual foresight, understood long ago the importance of oil, and took the necessary action. In the work of exploration alone she is at the present moment spending considerable sums, and she will soon have nearly all the remaining oil-fields of the world in her hands. France alone remains behind, hesitates, changes her mind, and allows herself to be despoiled, not only of the region of Mosul, one of the richest oil-fields of the world, which was formally promised to her by the Agreements of 1916, but also of the few modest oil deposits which she possesses in her colonies. For these are almost all exploited by British firms; and by the Agreement of San Remo the French Government has, in addition, promised to reserve a large share for "British co-operation" in new companies which may be established there. "Who has oil has Empire!" exclaimed Henry BÉrenger, in a diplomatic note which he sent to Clemenceau on December 12, 1919, on the eve of the Franco-British conferences held in London to consider the future of Eastern Europe and Asia Minor. "Control of the ocean by heavy oils, control of the air by highly refined oils, and of the land by petrol and illuminating oils. Empire of the World through the financial power attaching to a substance more precious, more penetrating, more influential in the world than gold itself!" The nation which controls this precious fuel will see the wealth of the rest of the world flowing towards it. The ships of other nations will soon be unable to sail without recourse to its stores of oil. Should it create a powerful merchant fleet, it becomes at once mistress of ocean trade. Now, the nation which obtains the world's carrying trade takes toll from all those whose goods it carries, and so has abundant capital. New industries arise round its ports, its banks become clearing houses for international payments. At one stroke the controlling centre of the world's credit is displaced. This is what happened already in the eighteenth century when, with the development of British shipping, it passed from Amsterdam to London. And British statesmen have had, at one time, a moment of anxiety lest it should move to New York! Thus began the terrible struggle between Britain and the United States for possession of the precious "rock-oil." "The country which dominates by means of oil," said Elliot Alves, head of the British Controlled Oil-fields, a semi-official, semi-private organization, which the British Government has specially commissioned to fight the Standard Oil Company, "will command at the same time the commerce of the world. Armies, navies, money, even entire populations, will count as nothing against the lack of oil." The War proved it. Whence does oil derive this formidable power, before which the whole world bows down? From the fact that the fundamental basis upon which the industrial life of modern nations rests is fuel. Before the War, Germany, Britain, and the United States owed the whole of their power and their wealth to coal. It would have been true to say that the British Empire rested upon a foundation of coal. It is essential to have control over fuel in time of peace for economic prosperity, and in time of war to supply the navy and maintain control of the seas. Now oil has considerable advantages over coal. Its extraction is remarkably easy compared with that of coal. What is the boring of a well and the installation of some simple machinery on the surface compared with the expensive subterranean workings which are involved in the exploitation of a coal-mine? An oil-boring before the War cost a few hundred thousand francs, while the simplest workings for a colliery always necessitated an expenditure of several millions. The installations once made, oil flows by itself into the reservoirs, whence it is conducted by pipe-lines to the sea-ports and there pumped into the ships. It may be refined before exportation or only on arrival in the country where it is to be consumed. The expenditure upon labour in these various operations is extremely small, especially in undeveloped countries where native labour is employed. Thus, even at the present time, in the Dutch Indies the coolies are paid a florin a day. Now at the end of the War the employÉs of the Royal Dutch in the Dutch Indies numbered only 1,000 Europeans and 2,906 natives and Chinese for a production of 1,706,675 tons. A native earned only 300 gold francs a year for 80 tons of oil extracted, refined and transported to the coast. After the Bolshevik revolution wages at Grosny were still only seven roubles a day, which, considering the depreciation of Russian money, represented very little. Generally the expenses of production in Russia did not exceed a few kopecks a pood (50 kopecks for one of the best-known firms, that of Akverdoff). Thus oil is bound to become in future more and more important as a fuel, because of its peculiarity in necessitating so insignificant a charge for labour—which protects it from the inconveniences resulting from the social crises in the midst of which we live—and because its net cost is so small. For half a century it was used only for lighting purposes, and then it had to compete with gas and electricity. At one time there was talk of limiting production! Between 1900 and 1910 the invention of the internal-combustion engine and the enormous development of motoring gave it new impetus. Fine oils only had been used up to then. Under pressure of the demand, it became customary to raise and refine poorer and poorer oils, giving from 60 to 75 per cent. of waste products. There remained the mazut[1] or fuel-oil, which required very high temperatures for combustion and which was very dirty in use. Then the German, Diesel, invented the internal-combustion engine for heavy oil. The mazut, subjected to high pressure in a cylinder, produces an explosive mixture which, without sparking-plug or magneto, drives the pistons in the manner of a petrol engine. The installation is rather heavy, but no boiler is required, and it takes up much less space than a steam engine of the same power. A vessel fitted with a Diesel engine can sail for fifty-seven days without re-fuelling, while with a steam engine it could only sail for a fortnight. A ship fitted with a Diesel engine and having a speed of 20 knots could sail from France to Suez, India, Australia, New Zealand, and return by Cape Horn without re-fuelling. But, better than any words, the following little table, made out for two boats of the same power, will give an idea of the great advantages of the Diesel engine:—
At first oil was used on fishing boats, then on small coasters. To-day the biggest British cargo boats, of the type of the Zeelandia or Sutlandia, are fitted with Diesel engines. All German submarines had them during the War. In 1917 Herr Ballin,[2] the great friend of William II and the head of the Hamburg-Amerika line, just before his suicide decided on the construction of a fleet of enormous ships fitted with internal-combustion engines. Scandinavia, Holland, Italy, all now use the Diesel engine. France alone remains behind in this respect. It has even been used on railways, a little-known fact. Diesel locomotives with four cylinders, built by Sulzer Brothers of Winterthur, have recently been run on the line from Berlin to Mannsfeld. "The development of our metallurgy," wrote Admiral Degouy in April 1920, "will soon give us the assurance that we also shall be able to manufacture large-bore cylinders and pistons of flawless casting, like those made in Augsburg, Nuremberg, Stockholm, and Christiania, which will support for long periods without change (and consequently without leakage) the temperature of 1,000° C. which is developed by the combustion of mazut in these engines." Since the invention of the internal-combustion engine, mazut has been introduced directly into the furnaces of great ships. The heating power of this formerly despised product is almost double that of coal: 1 kilogramme of liquid fuel produces the same results as 1.7 kilogrammes of coal. Its use allows of the reduction by five-eighths in bunker space, and by 70 to 80 per cent. of the stokers, since a single man can look after several boilers. The fuelling of a ship is effected cleanly and quietly in a few hours. Hundreds of tons of oil can be pumped into the cisterns in a negligible time, and that even out at sea and in heavy weather. To give an idea of the difference in time and labour required for the loading of coal and oil before the sailing of a mail steamer of the tonnage of the Olympic or the Lusitania, I will quote the following figures:—
The labour of stoking and clearing the furnaces is done away with; there is no longer either dust or smoke. Parts of the ship which are too restricted or too inconveniently placed for housing coal can be used for oil. It is stored in the double bottom of the boat, and by utilizing the coal bunkers for general cargo the available storage space is increased by 10 per cent. On the latest Cunard and White Star liners the economy of space thus realized has been as much as 33 per cent. And Admiral Lord Fisher drew attention to the fact that on the Mauretania—the sister ship to the Lusitania—the adoption of oil fuel allowed of the reduction of the crew by three hundred men. The efficiency of a boiler heated by coal is not much more than 60 per cent.; that of one heated by oil reaches 80 per cent. On Japanese steamers of the type of the Temyo Maru, of 21,000 tons, with Parsons turbines of 20,000 horse-power, the consumption of oil is only 455 grammes to one effective horse-power, instead of 685 grammes of coal. The flexibility and ease of control are extraordinary. Since 1911 the merchant fleet of the United States has been consuming 15 million barrels annually. Nearly all the nations have followed this example,[3] especially those which dream of the dominion of the seas for the use of oil in their warships gives them an incontestable superiority. The presence of a squadron sailing under coal is disclosed at a distance of more than 10 kilometres by enormous clouds of smoke; under oil its presence is almost imperceptible; it becomes visible only at the moment when it is about to attack. Ease of approach is enormously increased; and even if an enemy vessel is discovered by marine or aerial scouts it is very difficult for the gunners of the threatened vessel to take their aim at so vague a target as an almost invisible horizontal silhouette. "No smoke, not even a funnel!" exclaimed Lord Fisher in his strenuous campaign for the transformation of the British Navy. Many years elapsed, however, before he saw the triumph of the new fuel. It has been objected that ships lose a little of the protection which is conferred upon them by their belts of coal bunkers; but this criticism is valueless. For, as they gain considerably in lightness, it is possible to increase the thickness of the armour plate and the size of the guns. The abolition of funnels permits of a considerable increase in the field of fire of the artillery. Moreover, with oil fuel fleets acquire an extreme mobility.[4] Half an hour after receiving the order to raise steam the ship is ready to start. Thirty-five minutes afterwards it is going at full speed. In six minutes it can pass from normal to maximum speed. Eleven minutes are needed to get a boiler under full pressure. A voyage at forced speed entails no extra fatigue for the crew: with coal it is hell! Thus, since 1912, oil has been constantly used on twenty-eight German battleships, almost the whole of the fleets of Great Britain and the United States, and the Russian squadrons in the Baltic and the Black Sea. The American Navy has completely abandoned coal for its new units. And France? France, which was the first to conceive the idea, had, at the moment when war broke out, only a few small boats burning oil, and not a single powerful modern vessel comparable with the Queen Elizabeth. And yet, as early as 1864, it was France that built the first ship, the Puebla, sailing under Lieutenant Farcy, to use the new fuel, which aroused so much curiosity during the Second Empire. But the selfish opposition of our coal-owners overcame those who were favourably inclined, including Napoleon III himself. No one gives a thought to these facts at the present time. France often points the way of progress; she never profits by it. The most far-reaching revolutions have begun with a technical invention. The unknown monk who first mixed charcoal with sulphur and saltpetre razed feudal castles and created the great modern States. And he who balanced a magnetized needle on its pivot was the real founder of colonial empires. We are just entering upon an economic period which will turn the whole world upside-down—the Revolution in Fuel, with its far-reaching consequences. FOOTNOTES: [1] "The famous petroleum wells of Baku ... yield crude naphtha, from which the petroleum or kerosene is distilled; while the heavier residue (mazut) is used as lubricating oil and for fuel."—Encyclopaedia Britannica, 11th ed., vol. iii, p. 230.—Translator's Note. [2] "Herr Ballin committed suicide, foreseeing that unrestricted submarine warfare, which had then been decided upon, would be the downfall of Germany."—Revue des Deux Mondes: Contre-Admiral Degouy, "Oil and the Navy." [3] Since 1920 the world tonnage of oil-burning steamers has exceeded that of steamers built to burn coal. [4] At the battle of Jutland, only the oil-burning ships realized their trial speed. OIL: ITS ORIGIN, DISCOVERY, AND HISTORY The Great Producing States before 1914 and in 1921 Oil is found naturally in different forms. Sometimes it occurs as a volatile liquid at ordinary temperatures; it is then known as naphtha. Sometimes the volatile principles are only given off at higher temperatures; it is then called petroleum or rock-oil. Sometimes also it appears in a semi-solid form, asphalt, its volatile properties having already evaporated. It is very rarely that oil is found on the surface or gushing up by itself without the help of pumps. It is usually met with at a great depth underground, in pockets in which oil and gas are found above water. Thus, in order to detect its presence, it is necessary to make borings. When one reaches a pocket in the neighbourhood of the gas, the latter escapes by the outlet which is offered. If the boring first reaches oil, and if the pressure of gas is sufficient, the oil gushes out and forms a spring. This is what happened in the Caucasus, where certain wells spouted up to a height of eighty metres through the borings made by the prospectors. More often the gas pressure is not sufficient to raise the liquid to the surface, and it is necessary to install pumps driven by steam to empty the pocket. At the time of the boring, when the cylindrical metal drill, driven vertically by a metal cable and held vertical by the derrick (a sort of pyramidal framework of metal), reaches the deposit, the gas which has been accumulating for thousands of years escapes, driving, pushing, sucking up the oil, and making a fountain, a gusher, a sort of artesian well. The oil is led away in metal pipes, vertical till they reach the surface, horizontal to the refineries, ports, or other destinations. Once the well is capped, it is not touched again; it is alone in the desert, and only a metre records its daily output, while hundreds of thousands of men are obliged to work underground to wrest coal from the bowels of the earth by the strength of their arms! The depth of the wells varies from 200 to 1,600 metres, according to the region. The duration of the flow is essentially variable, depending upon the magnitude of the deposit of oil. But it goes without saying that when a spring has flowed for seven years more or less, like the first one exploited by the Mexican Eagle, it gives out, yielding salt water. The fact is quite ordinary, and is known in all competent circles, although it is sometimes brandished as a warning by interested people in order to lower the value of certain oil shares. One often hears of "pools," "rivers," or "veritable lakes of oil." These expressions are most inaccurate. Apart from certain exceptions, such as the famous well of the Colombia in Rumania in 1913, the deposits of oil are neither rivers nor pools. They are actually solid layers of sandstone, often very hard, impregnated, saturated with oil. This sandstone is very porous and contains thousands of cavities or pockets enclosing the precious "rock-oil." Its thickness varies from the usual 30 or 50 metres (giving wells of a yield of 200, 500, or 1,000 barrels a day) to one kilometre in certain wells of the Eagle (yielding 70,000 to 100,000 barrels a day, instead of 200 to 1,000). The Eagle is lucky, it must be admitted, and its history is unique in the annals of oil. Only its sister company, the Mexican Oil, which works in the same field, but for the Standard Oil group, can be compared with it. Even a superficial examination of the chemical composition of oil, a hydrocarbon, in which the carbon, in a proportion of 80 to 88 per cent., is combined with hydrogen, and sometimes with a little oxygen, reveals in this compound a marvellous source of thermal energy, which may manifest itself in various ways. For, from the greenish-brown oil which is lighter than water, no less than 128 chemical compounds are obtained, which are used in forty different industries. From the retort in which the crude oil is distilled comes an infinity of substances of basic importance in modern industry. Although the intensive use of oil and its industrial applications are of comparatively recent date, the discovery of deposits of petroleum goes back to remote antiquity. The history of oil is as old as the world, since there is already mention of it in the Book of Genesis. The wells of Baku were known long before the Christian era. In the peninsula of Apsheron, where they are situated, arose the cult of Zoroaster and the fire-worshippers. According to the latter, the flames which escaped from the soil would burn until the end of the world. They were, at any rate, famed throughout the world nearly three thousand years ago. The Greeks and Romans were acquainted with oil. The latter called it bitumen. In Low Latin it was petroleus, from petra—stone, and oleum—oil; and the word has come down to us through the scholars of the seventeenth and eighteenth centuries who adopted it. In ancient mythology and literature oil is often mentioned. It is probably with oil that the Centaur—to avenge himself upon Hercules—was obliged to anoint the famous shirt of Nessus! "It is not without reason," says Plutarch, "that certain authors, wishing to restore truth to legend, assert that petroleum is the substance which Medea used to smear the crown and veil that play so great a part in the tragedies; for fire does not issue from them of itself, but when they are brought near a flame fire is communicated to them by some kind of attraction with such rapidity that the eye can scarcely follow it." Herodotus, in his works, mentions the oil-fields of Zante; Pliny those of Agrigente in Sicily; Plutarch those of Ecbatana and Babylon. "The land of Babylon," he says, "is impregnated with fire.... It is as though the soil, agitated by the fiery substances which lie concealed in its bosom, has a sort of pulse which makes it quake." When Alexander conquered these regions he was particularly astonished, in the province of Ecbatana, at "a gulf from which rivers of flame streamed continually, as though from an inexhaustible source."[5] His return to Babylon was celebrated by the burning of two parallel streams flowing through the streets. And one of his courtiers, to amuse him, caused a young man to be anointed with oil; scarcely had it touched his body when he was enveloped in flames. The Chinese have used oil for lighting from the most distant times; Europeans since the fourteenth century. It is difficult to go further back owing to the absence of documents during the Middle Ages. But what was Greek Fire, if not oil? In the fifteenth century we find traces of its use in medicine; and even at the present time the natives of Mosul and Bagdad use some of the purer varieties, which they call "mourn," as a dressing for serious wounds. Oil has some fame as a vermifuge; as, for example, the oil of Gabiau in the south of France. A curious memoir of FranÇois Clouet, who was entrusted with the task of embalming Francis I in 1547, mentions the use of an oil ("pÉtrolle") in the colouring of a waxen mask made in the dead king's likeness. In the eighteenth century Apsheron was again the astonishment of British travellers seeking a route to India. "The Russians drink it as a tonic and as a beverage," writes Jonas Hanway, who visited these regions in 1754, speaking of petroleum. "It never intoxicates. Used internally, it is also an excellent cure for gravel. Used externally, it is a valuable remedy in cases of scurvy, gout, and cramp. It is very good for removing stains from fabrics, and would be in more frequent use if it did not leave behind it an abominable smell." pic. World Production in 1918. Finally, the earliest settlers found oil in America, or, to be more exact, recognized the wells which had already been dug by the Indians. But it was only in the middle of the nineteenth century that the real importance of the oil-fields scattered over the globe began to be realized. While France about 1840 made the first trial use of shale oil, and Germany in 1853 invented the oil lamp, later perfected by Laydaw of Edinburgh, "the bold and inventive spirit of Young America undeterred by a series of fruitless experiments, set itself to discover the first springs of the precious liquid in Pennsylvania." In 1858 Colonel Edward Drake, while boring a salt-water well near Tytusville, was nearly engulfed with his workmen in a jet of oily liquid, the spring of which was apparently inexhaustible, and continued to furnish several thousand litres a day. It was subsequently discovered that this liquid after a very simple process of purification, would burn with a brilliant light. The "oil fever" then seized all America and myriads of searchers rushed into the valleys of the Alleghanies in Pennsylvania. The oil industry was created. For a long time America was the only country producing the precious oil; forty years ago she still furnished two-thirds of the world's supplies. But although the oil-fields of the Alleghanies and of Ohio were developed rapidly, they have been far surpassed by the enormous deposits of Baku. In 1898 Russia outdistanced the United States, and kept the first place until 1902, when America recovered it after a great struggle, thanks to the new oil basins of Texas, California, and the Mid-Continent, and above all those of Kansas and Oklahoma, with its famous "Glen Pool," which in 1908 produced the fantastic figure of 50,000 barrels a day. Russia has never been able to retrieve her position. Her production, which in 1901 was 50 per cent. of that of the whole world, was not more than 20 per cent. two years before the War, and in 1918 had fallen to 7.86 per cent. The cause is chiefly the diminution of production of the "black region" of Baku, in the peninsula of Apsheron, which juts out into the Caspian Sea and is connected with the open seas by a railway and by a pipe 800 kilometres long, through which the annual flow of oil towards Europe before the great world catastrophe amounted to 400,000 tons. In five years the average yield of the wells diminished by 40 per cent., while the mean depth of the borings was increased by 25 per cent. It was necessary to dig more and more deeply to find less and less oil. The old oil-fields of Baku were nearing exhaustion. Now they alone furnished four-fifths of the production of Russia. That is why, in 1918, Russia lost the second place, which she had held so long, to her young rival Mexico. It is true that the two revolutions which she had to undergo in this quarter century helped the process considerably. The revolution of 1905 caused the bloody disturbances of the Caucasus: the finest factories were burnt and numerous wells destroyed. Great unrest continued incessantly in this region until the triumph of Lenin. But there are still in Russia oil-fields of very considerable extent, scarcely touched before 1914, which the world cannot afford to dispense with.[6] The United States, Russia, Mexico, Rumania, these were, in order of importance, the four chief oil-producing countries before the War. Rumania shares with America the distinction of being the first country in which rock-oil was extracted. The same year in which Colonel Drake made his experiments at Tytusville 250 tons were extracted from a well by hand-pumping: the oil was only just below the surface. Since then Rumanian production has continually increased. It was 500,000 tons when the region of Moreni, one of the richest in the world, was discovered. Foreign capital flowed in immediately, and Rumanian production reached its highest point in 1913 with 2 million tons. The War gave it an appreciable setback; at the present time it does not come to more than half this figure.[7] pic Pre-war production of oil in Mexico, Rumania, the Dutch Indies and Galicia. Although the production of Rumania, hampered by the lack of electricity which hinders the borings, has recovered with difficulty, that of Mexico, often a prey to civil war, has known no pause in its incredible progress. In ten years it has passed from 3 to 160 million barrels, carrying its share in world production from 1 per cent. to 23 per cent. The figures are worth quoting:—
It is Mexico which saves the world to-day, for the United States—the greatest producers in the world—do not even supply enough for their own consumption, and are obliged to call in the help of Mexico to make good their deficit. In spite of all their efforts, they have only succeeded, during the last three years, in increasing production by 24 per cent., while Mexico has augmented hers by 130 per cent. The other countries follow at a considerable distance. Here is the record of each for 1921:—
The total production was 759,000,000 barrels of 42 gallons, against 684,000,000 barrels in 1920. It exceeds 100 million tons, easily beating the records of the preceding years. If we remember that half a century ago, it was only 66,000 tons, and that between 1913 and 1920 it has almost doubled, we shall see what a tremendous stimulus the great world War has been. But fears are increasingly felt. Will it be possible to satisfy the dizzy increase in the consumption of oil? And do not certain countries already fear to see the reserves contained in their soil exhausted? |
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