Oil

Its Influence on Politics

Francis Delaisi

• Publisher: Taylor & Francis
• Year: 2018
• eBook ISBN: 9780429852404
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

First published in English in 1922, Delaisi (translated in to English this version by Leese ) Timelines details the relationship and the delicate line, oil had for international relations, politics and industry on a global scale during the early twentieth century.

Oil

Chapter I
The Revolution in Fuel and the British Empire

IN June, 1920, patrons of the parliamentary game witnessed a singular spectacle in France: the Briand team and the Tardieu-Loucheur team, having determined, according to well-informed people, to wrest from the Millerand team the “cup” of power, launched a furious attack, strongly supported by flame projectors burning Mosul oil. It was the first occasion upon which this weapon was used in political battles. Thus the great public learnt of the arrival of mazut upon the field of international conflicts.

The peoples to-day contend for iron mines and oil fields just as their princes of old quarrelled over provinces. The coal of the Ruhr or of Teschen, the iron deposits of Lorraine, or the oil of Mesopotamia, are the stakes in the great games played round the tables of San Remo and Spa. The victors in the Great War, exhausted by their effort, renounce the glorious dream of liberating oppressed peoples, and are reduced to disputing among themselves for the fuel necessary for their homes and industries.

In truth, however, the facts of the case, passing through the parliamentary prism, reach the public a little distorted. It might have been thought that Britain and France were quarrelling about the oil of Mosul. In reality, this field—and those of all French colonies—had already been promised to an Anglo-Dutch trust. The question which remains to be decided is whether America will be excluded from the division of the spoil, and whether France will indolently abandon her natural resources to foreign exploitation or whether our business men will wish to make something for themselves out of this dearly-bought wealth.

The subject brings us face to face with the problem of our alliances and the problem of our business methods. That is the reason why the main features of the contest are here recounted and discussed.

I. —A PEACEFUL INDUSTRY

For more than half a century, and until recent years, the exploitation of petroleum was pre-eminently an American industry. It was in the United States that oil was first discovered and worked. “Wild cat” hunting (the Americans call a boring a “wild cat”) is a singularly hazardous occupation. Mr. O’Donnell, President of the American Institute of Petroleum, asserts that, out of every hundred borings, ninety-eight are unprofitable. But for fifty years the 2 per cent, which succeeded sufficed for the consumption of the world. The prospector who chanced to strike a “gusher” made a fortune. Consequently, the quest for oil reproduced the frenzy of the rush for gold. Innumerable “wild catters” ransacked the wildest mountains of Pennsylvania, California and Oklahoma; huge quantities of capital were invested in these undertakings. To-day there are more than 16,000 companies engaged in the search, and there must be very few Americans who have in their safes no share certificates bearing the word “oil.” It is a kind of popular lottery!

The main difficulty is not to produce oil, but to transport it. Since it is found very frequently in desert regions, it used to be a big task to deliver it at the centres of consumption. Then Rockefeller had a daring idea: he thought of laying pipe lines—aqueducts as it were—through which the oil would flow like a river into immense reservoirs within reach of the refineries, whence tank wagons and tank steamers would carry it all over the world for domestic use. The genius of Rockefeller created all this equipment of pipes and pumps, wagons and tankers, and raised the huge capital required for the purpose. Thenceforward, since the oil was transported almost automatically, its price fell considerably. All the producers became tributaries of the pipe lines, and the Standard Oil Company obtained practically complete control of the market. But it remained essentially a transport and refinery undertaking, and even to-day it does not contribute 18 per cent, of the American production. It has allowed all the small producing companies which are compulsorily its clients to continue to exist; only, as controller of the market, it fixes prices. By means of its powerful organisation, it has succeeded in making petroleum a remarkably cheap commodity, worldwide in its distribution; and the octogenarian Rockefeller has amassed one of the most colossal fortunes in history.¹

Naturally, the grand old man has had imitators. The Rothschilds have exploited the oil of Baku in a similar way. The Dutch, controlling the rich fields of Sumatra, Java, and Borneo, have made the Royal Dutch (Koninklijke Nederlandsche Maatschappij) a powerful enterprise, though inferior to the American trust. Then British, French, German, and Austrian companies began to work the fields of Rumania and Galicia. The human race, eager for light and heat, absorbed as much as it was offered; and all these undertakings prospered.

In the meantime, France, Britain, and Germany, which produced nothing and consumed much, remained passive spectators. They saw these companies contend for their orders, and, by playing upon this competition, they sometimes obtained oil at a lower price than the producing countries; in addition, these companies provided profitable investments for their capital. Hence, their Governments did not intervene to quarrel about so valuable a product. If the political world occasionally troubled itself about oil, it was merely to fight the tendency towards trusts, a domestic question pure and simple. Oil had not yet entered the danger zone of diplomatic conflicts. For fifty years it was the most peaceful of industries; no one could have imagined that one day it would trouble the peace of the world.

II. —THE REVOLUTION IN FUEL.

As nearly always happens, a technical invention was fated to alter the relations between nations and to threaten the stability of empires.

For half a century, oil was simply a means of lighting; its use was confined to the lamp, and occasionally the domestic stove. Moreover, in this modest sphere, it had to meet the competition of gas and electricity; and at one time there was some thought of restricting its production. Between 1900 and 1910, the perfecting of the internal combustion engine and the enormous development of motoring gave it a new lease of life; prospectors spread over the fields of Mexico, Central America, and Burma, and production increased still more quickly than the demand.

Now, all these new engines consumed petrol alone. Under pressure of the demand, it became customary to raise and refine poorer and poorer oils, giving from 60 to 75 per cent, of wastage; only a part of this residue was used in the form of lubricating oils. There remained the mazut or fuel oil, which, it is true, could be burned, but had a high flash-point and deposited carbon too quickly for use in the delicate engines of motor-cars, lorries, and aeroplanes.

Such was the situation when a German named Diesel constructed the first internal combustion engine for heavy oil. The mazut, subjected to great pressure in the cylinder, produced an explosive mixture, which, without sparking-plug or magneto, drove the pistons in the manner of the petrol engine. The starting of the Diesel engine required a powerful machine to obtain the necessary pressure, which rendered it unsuitable for vehicular transport, but it could be used wherever a sufficiently heavy installation was permissible; and burning as it did an almost worthless by-product, the net cost of running it was low. Finally, since with this machine there is no longer any need for boilers, and also mazut, compared with coal, gives the same number of calories in a smaller volume, a Diesel engine takes up much less room than a steam engine of the same power.

A revolution followed. Wherever no great or rapid variations in power were required, Diesel engines began to be employed. Shipping especially made use of them; applied originally to fishing-boats and coasting vessels, they gradually increased in use for long voyages. A vessel fitted with a Diesel engine can sail for fifty-seven days without rebunkering, while with a steam engine it could not sail for more than a fortnight. Oil, confined at first to industries on land, began to conquer the seas.

Nevertheless, in spite of numerous improvements, the internal combustion engine enjoyed so far only a comparatively modest success, and the great liners seemed beyond its range. Then came the idea of introducing the mazut directly into the furnaces of great ships. Since it requires great quantities of oxygen in burning, powerful injectors were contrived for fitting to the furnaces in order to convert it into spray, mingle it with air, and so facilitate combustion. By means of these supplementary inexpensive installations and small alterations in detail, ships of any size can now be converted to burn oil in a short time and at small cost.

The advantages of such conversion are enormous. For the same weight fuel oil gives 70 per cent, more heat than coal. It is less bulky; it is not dearer; it is easily manipulated, for it flows by itself into the machine; it economises labour considerably; it permits of more rapid variations in speed. Giving out more heat for a smaller volume, it increases the radius of action about 50 per cent, with the expenditure of the same power, and also allows of a saving of 30 per cent, in bunker space. This last-mentioned fact is specially important for armoured vessels, which can in consequence be armed with more powerful guns. Hence the British super-dreadnoughts, like the Queen Elizabeth, burn only oil, as do also the great American battleships Nevada and Oklahoma. The naval authorities of the United States have completely given up the use of coal in the new capital ships under construction. The great shipping companies have likewise fitted their recent liners to burn liquid fuel. In naval and in merchant shipping, mazut is on the way to dethrone coal.

III. —THE BRITISH EMPIRE IN DANGER.

This simple fact was pregnant with consequences for world politics and the relations between States. From the start, high British circles had followed with anxious attention the advance of mazut as a fuel for big ships. Everybody knows that British naval supremacy is the essential condition of the existence of the British Empire. Now, she owes this not only to the number and tonnage of her ships, but still more to her control of fuel. Thanks to the innumerable coaling stations which she has established and which she supplies upon all the world’s trade routes, neither warship nor merchantman can cross the ocean without her permission. Furthermore, coal assures to all her ships, great and small, an outward freight certain of sale in any country. Thus they always set sail fully laden, which enables them to give lower homeward freights than any other nation. As a result, all merchandise consigned to Britain costs less for transport than if consigned to any other country; and British industries enjoy the equivalent of a rebate upon all raw materials bought abroad. This is a weighty advantage over all competitors in the struggle for international markets. It might be said that the whole commercial and industrial prosperity of Britain has rested for a century upon this mastery of coal.

But from the moment when it became possible to use oil fuel for ships, everything was changed. Britain does not produce oil. The United States provide about 80 per cent, of the world’s consumption. Were they, then, going to take upon themselves the part of compulsory purveyor to all the fleets of the world?

By a slice of luck, they had no merchant marine. Incapable of utilising their precious fuel oil upon the sea, they could only supply British liners. The big British companies—the Cunard, the White Star, and so on—made great haste to convert the boilers of their huge mail steamers to the new fuel.

Then came the War. In the face of the formidable rise in freights, the enormous demand for maritime transport, and the fearful losses caused by German submarines, American engineers set up immense shipbuilding yards on the two oceans, and, with the energetic encouragement of their Government, in three years built a merchant fleet whose tonnage almost equals, and next year will surpass, that of the British. Then, in possession of the ships and in control of the fuel, may not America be tempted to wrest from Great Britain the world’s carrying trade which she has monopolised so long? If only she bethought herself of establishing oil depots in the principal ports—and the Standard Oil Company has already announced its plans for this—all the world’s shipping, and the proud British steamers themselves, at whatever point they touched land, would be obliged to beg the permission of American oil merchants to continue their voyage.

The military power of the great Empire is thus compromised. The American Congress has recently voted a formidable shipbuilding program. All its super-dreadnoughts of the Nevada and Oklahoma type are oil-burning. And already it is stated that, thanks to the saving in weight and tonnage due to oil fuel, the power of their guns and the extent of their radius of action enable them to shell and pursue the most terrible mastodons of the British fleet without risk of attack upon themselves. The military security and the commercial supremacy of the United Kingdom are threatened at one and the same time.

Strange indeed are the irony of fate and the frailty of empires! For six years Britain waged an exhausting war, with the main object of ruining German shipping for ever. At the cost of enormous sacrifices, which will weigh upon her for half a century, she gained her end. The Kaiser’s magnificent battleships now lie at the bottom of Scapa Flow, and the fine steamers of the Hamburg-America Line and the North German Lloyd have been shared as booty among the victors. The only maritime rival she had to fear is humbled to the dust. Yet now, from the very war which destroyed that competitor, a new one has arisen, twice as formidable as the old, for, in addition to a superiority in tonnage, it enjoys the practical monopoly of a fuel of which Britain has none. The burning of American oil in the boiler-rooms of the great liners may be the downfall of the British Empire!

Note

¹ Recently the powerful Standard Oil Company has had to split up into a score of companies in conformity with the anti-trust laws, but this is a mere sop to American democratic sentiment.

Chapter II
The British Attack

I. —THE GROWTH OF THE SHELL TRANSPORT.

FROM what follows one may judge the remarkable foresight and skill of the small group of business men and statesmen who govern and maintain the gigantic edifice of an Empire which Rome alone has equalled. Even before the War, at a time when no one was yet thinking of it, they had a clear vision of the serious consequences which the coming of oil fuel would entail upon the balance of power and the destinies of their country. All were aware, by a long-standing tradition, that the British Empire is founded upon its deposits of coal. From the moment when another fuel threatened to oust coal, it became necessary to gain possession of the substitute, to obtain over oil the same supremacy they already had over coal.

Acco...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Original Title
• Original Copyright
• CONTENTS
• Foreword
• Chapter I.—The Revolution in Fuel and the British Empire
• Chapter II.—The British Attack
• Chapter III.—The American Retort
• Chapter IV.—France in the Conflict
• Chapter V.—The San Remo Agreement
• Conclusion
• Appendix