The Prize: the Epic Quest for Oil, Money and Power by Daniel Yergin

Written 12 December

I heard about this book rather in passing while listening to an an episode of Demitry Kafinas’s Hidden Forces podcast.

It is a big read and took some time to get through. It covers the history of the oil industry from the second half of the nineteenth century. What a story it is, huge in scale, immense in its impact on humanity and central to any serious reading of economics and politics. Of course everyone professes to know how important oil is, but this book really does convey that its importance is far more foundational than we really like to believe. 

Obviously it’s a huge subject and in some senses 700 plus pages really only sketches the outlines, but Yergin has done a brilliant job of breaking the subject down into digestible chunks that come together to form a compelling and comprehensive narrative. Given the scope of the subject that is no mean feat.

Through all the trials and tribulations of the history of our relationship with oil we have never been able simply to ditch it. As one of the chapter headings has it, we are Hydrocarbon Man and have been for a long time.

The characters who appear are like a who’s who of geopolitics and business: Rockefeller, Getty, Middle Eastern Royals and Presidents, Latin American, Iranian, Arab, British, French, Italian and American Nationalists as well as the usual crowd of Lloyd George, de Gaulle, Churchill, Hitler, Stalin. There is a strong supporting cast of amazing colourful characters: St John Philby (Kim’s Dad and close confidante of the Saud family), Henri Deterding (Shell’s Head Man), Enrico Mattel and dozens of others.

It’s an incredible book, as I say it’s a long read but it never gets dull: not only is the underlying story being told so interesting, it’s also very well written with coherent themes running through and revisited time and time again. It must have been a huge job to edit it and whoever did it has done a great job. Not for nothing is it a Pullitzer Prize winner.

Reading it now, it does show a little age. The original book ended after Saddam Hussein was kicked out of Kuwait. There is an epilogue covering the second Gulf War, but only perhaps half a dozen paragraphs on the issue of Climate Change which in 2021 is a pretty glaring omission.

There are three themes that really stick with me, all leading to see saws in balances of power and enduring lessons for our own age. The first is the battle against monopolisation: Rockefeller’s Standard Oil obtaining a complete stranglehold on the US industry and more broadly over other important parts of the US economy, especially transportation. I think this reads across to today’s technology giants. There is simply no way within the market as it has now developed for competitors to Facebook or others to emerge: they are too big, and they buy up competitors. US politics eventually realised this with Standard Oil, I think politicians need to do the same with the technology giants.

The second is the struggle between oil companies and exporting nations to own the profits from the oil lying under them, the struggle of how to share economic rents. Here the tale is a long one of control passing slowly from the companies to the exporters. This is a long and winding road against a background of growing economic power in the developing world, economic justice, opportunism, bluff and bluster and big, big politics as the US and Europe cede control and the exporters win it (and often realise that while oil is a blessing but also brings numerous problems of its own).

The third is where we are going to be in fifty years given the current push towards net zero. The scale of the work required, the resources expended and the capital invested over the last 150 years to make the human race into the Hydrocarbon species is simply staggering. And the things we now take for granted as a result of this transition essentially constitute what we describe as progress: light, warmth, freedom from hunger and economic advance, all contributing to better health and longer lives of better quality. Once the magnitude of this is appreciated, the likelihood of reversing it all while maintaining living standards seems low. That it can be done while also meeting the aspirations to advanced lifestyles of the projected 1.7 billion Indians and 2.5 billion Africans by 2050 puts the enterprise into even sharper perspective.

All the above are huge subjects on which others will continue to write knowledgably over the coming years; for myself I suspect we’ve got a long way to go before we leave Hydrocarbon man behind. Anyway, I really can’t recommend this book strongly enough: there may not be another single topic through which to address politics, economics and business over the period from the first strikes in Pennsylvania, but that Yergin has managed to do so and with such incredible style makes it a truly memorable book.

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