January 14, 1991. As I write, more than half a million American and Allied soldiers are massed on the northeastern frontier of Saudi Arabia, arrayed against the million soldiers of Saddam Hussein. At issue is the sovereignty of Kuwait, a feudal monarchy that happens to enjoy the highest per-capita income on the planet. But, more than that, the prize is Kuwaiti oil, so pure that it needs only the slightest refinement before being pumped downstream into the motors of the First World.

In the spring of 1990, State Department analysts instructed the senior officers of the United States Central Command, the administrative head of what was to become Operation Desert Shield, that oil had lost its strategic significance. Four months later, Saddam Hussein’s forces invaded Kuwait, deposing its hereditary ruling family and claiming the nation as Iraq’s 19th province. Suddenly Persian Gulf oil reclaimed its place as the world’s most strategically significant resource.

It earned that place, writes Daniel Yergin in his remarkable new book The Prize, thanks to a gambit by Winston Churchill in the early years of the 20th century. Then vice-secretary of the Admiralty, Churchill ordered that the entire British navy be refitted to burn not Welsh coal, dirty but readily available, but Arabian oil, a distant and unreliable energy source that had only been recently discovered. Churchill’s move elevated a handful of Bedouin chieftains to the rule of nations cobbled together by the whims of European cartographers (on any map of the region the endless straight lines leap off the page), introducing a new era of colonialism that would soon involve the major powers of the world, including the oil-rich, once self-sufficient United States.

Yergin’s book is a thoroughgoing study, weighing in at some nine hundred closely set pages, of what might in the future be called the Oil Age, now scarcely a century and a half old. His story begins with an American academic and energy specialist, as Daniel Yergin himself is, named Benjamin Silliman, who in 1855 developed an economical method for extracting oil from the deep sedimentary bedrock of Pennsylvania and New York. (He charged a group of American financiers a then-shocking fee of $1,500 for the rights to his method.) A scant decade later, in Cleveland, John D. Rockefeller founded Standard Oil, which in twenty years’ time controlled 80 percent of the world market.

Standard Oil geologists warned Rockefeller that the firm’s extensive fields in the northeast would soon be depleted, and Rockefeller dispatched agents first to Texas and later throughout the western United States to buy up promising properties. They worked so efficiently that Standard soon controlled most of the nation’s oil economy from ground to gas tank, prompting antitrust regulators in Washington to agitate for its breakup. Like the hydra, Standard Oil spawned Standard Oil of New Jersey, which would become Exxon; Standard Oil of New York, now Mobil; Standard Oil of California, today’s Chevron; Standard Oil of Ohio, which became Sohio and then the American branch of British Petroleum; Standard Oil of Indiana, now Amoco; Continental Oil, or Conoco; and Atlantic Oil, now ARCO. One Rockefeller executive grumbled that the company had been chopped up into such small pieces that there were no office boys in the Cleveland headquarters. They had all been sent out to preside over the firm’s supposedly independent subsidiaries.

At the same time, the Nobel family of Switzerland—among whose controlling members was Alfred Nobel, the inventor of dynamite and later benefactor of the various prizes named after him—established operations in the newly discovered oil fields of the Caucasus, providing the wherewithal for Russia to become a world power in only a few years. Here Yergin points out the fact that the Soviet Union is today the world’s largest producer of oil, and only its refusal to join OPEC (“we are not a producer of bananas,” one Brezhnev-era official sniffed) has kept it from taking the economic lead away from such lights as King Fahd, and, yes, Saddam Hussein.

The international petroleum race was on. Sensing a technological revolution in the offing, Thomas Edison’s chief engineer quit his job and set up a machine shop in Dearborn, Michigan, to mass-produce what he called the “horseless carriage.” By 1900 Henry Ford had sold eight thousand of his contraptions; a decade later, the figure would rise to 902,000. (Today, Yergin tells us, there are 148 million gasoline-powered vehicles on the road in the energy-squandering United States, another 292 million in the rest of the world.) The oil boom went into full swing, with companies and governments traversing the globe for new holdings and atlas companies annually revising the maps of the world to reflect the new powers that oil founded: Indonesia, Libya, Iran, Kuwait.

For Yergin, the history of the 20th century can be analyzed as the history of oil exploration, extraction, and export. His long section on the Second World War is a tragedy drenched in black gold, not ideology: his Hitler longs only for the fields of southern Russia, his Tojo orders the sneak attack on Pearl Harbor only to divert American attention away from Japan’s seizure of the rich oil fields of Dutch-ruled Malaysia. Yergin’s analysis is far too simplistic, but it is nonetheless compelling in light of today’s strange events.

The closing chapters of The Prize are the most urgent, though the book never fails to hold the reader’s attention. With an economist’s statistical precision, Yergin demonstrates that postwar patterns of energy consumption are the moral equivalent of addiction to crack cocaine, constantly rising with no regard whatever for the consequences. Worldwide energy use tripled between 1949 and 1973, the year of the first OPEC embargo, but at the same time absolute demand increased 550 percent, mostly in the United States, Europe, and Japan. In the last nation oil consumption increased 137 times over, from thirty thousand to 4.4 million barrels daily. Small wonder that Japan urged military intervention in the Persian Gulf from the moment Hussein’s tanks rolled into Kuwait.

We need, Yergin argues, a comprehensive national energy policy of the sort that Jimmy Carter proposed a dozen years ago. He foresees many another Kuwait, inescapably, until the United States achieves energy independence, until the European powers and Japan reduce their consumption of foreign oil, until the world economy is founded on a more sustainable source of fuel. Yergin is right, of course. And all of us, starting with George Herbert Walker Bush, need the kind of understanding of the modern world that The Prize offers.


[The Prize, by Daniel Yergin (New York: Simon & Schuster) 877 pp., $24.95]