Oil Research Paper

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Oil, or black gold, is one of the most contentious commodities in recent history. As the most important source of energy in the twentieth century, oil has been a key ingredient in transforming agriculture and transport, and with them, social and economic life. But oil has also been a source of domestic and international conflict, and is closely implicated in environmental degradation.

No commodity or industry had a greater impact on world history in the twentieth century than petroleum, or oil, a complex mixture of hydrocarbons that had their ultimate origin in plants and animals that lived and died hundreds of millions of years ago. Oil production and use has transformed social and economic life and has had a deep and lasting impact on the environment. Control of oil has helped determine the outcome of major wars and has been a central element in U.S. global power.

History of Oil Use

Oil from natural seepages was used as early as 3000 BCE in Mesopotamia and China for heating, lighting, medicine, ship caulking, and road building. Later, oil was a key ingredient in Greek fire, a flammable mixture of petroleum and lime used in warfare. Widespread oil use did not occur until the mid-nineteenth century, however, when the development of techniques for refining crude petroleum created new uses for oil. The development of hard-rock drilling for oil also greatly expanded oil production. Kerosene refined from crude petroleum quickly became a major source of illumination, and petroleum-based lubricants replaced vegetable oils, whale oil, and animal tallow.

Used mainly for illumination in the nineteenth century, oil became an integral part of modern life in the twentieth century. Just as electricity began to overtake kerosene as the main source of illumination, at least in urban areas, the development of the oil-powered internal combustion engine in the late nineteenth century and its almost universal adoption in the transportation sector over the course of the twentieth century created vast new markets for oil. Aided by improvements in refining techniques, oil became the fuel of choice for the automobiles, trucks, ships, and airplanes that revolutionized transportation and transformed the physical, economic, and social landscapes of societies all over the world. Oil-powered machinery and petrochemical-based pesticides, herbicides, and fertilizers also sparked unprecedented increases in agricultural production. In particular, the development in 1909 of a method to synthesize ammonia, first from coal and later from natural gas, allowed massive expansion in the use of inorganic fertilizers resulting in dramatic increases in food production, and with it, water pollution. By the end of the twentieth century, oil accounted for around forty percent of global energy consumption (including over ninety percent of transportation energy use) and was the most important commodity in international trade both in terms of mass and value.

Environmental Impact of Oil Use

Drilling for oil, transporting and refining oil, and burning oil has had a significant impact on the environment. Fossil fuel combustion, of which oil is a major component, puts far more carbon dioxide into the atmosphere than the world’s oceans, soils, and biomass can absorb, and probably has affected the Earth’s climate. In December 1997, the developed countries agreed, in the Kyoto Accords on Climate Control, to reduce their emissions of global warming gases. (Despite the aims of the Kyoto Protocol, which expires in 2012, global emissions of greenhouse gases have continued to increase. In December 2009, participants at the United Nations Climate Change Conference in Copenhagen, Denmark, failed to reach a binding agreement about replacing the Kyoto Protocol, but as of April negotiators were seeking to extend and complement the existing treaty at the 2010 conference in Cancun.) Oil production and oil-derived products (including products of the petrochemical industry) have also contributed significantly to air, water, and soil pollution, both directly and indirectly. Oil-powered technologies have allowed vast increases in mining and logging activities, for example, with major environmental consequences.

Oil and Military Power

Oil became essential to military power in the early twentieth century, when the navies of the great powers, led by Great Britain and the United States, began to switch from coal to oil as fuel. Although the navies of the great powers played a relatively minor role in World War I, oil and the internal combustion engine heralded a revolution in mobility on the land, the sea, and in the air.

Oil was crucial to the origins and outcome of World War II. Hitler’s desire to gain control of oil for his heavily mechanized war machine was an important factor behind his decision to invade the Soviet Union. Japan was dependent on the United States for around 80 percent of its oil needs, and the U.S. decision in the summer of 1941 to cut off oil exports to Japan presented Japanese leaders with the option of going to war to seize oil supplies in the Netherlands East Indies or bowing to U.S. pressure. All the main weapons systems of World War II were oil-powered—surface warships (including aircraft carriers), submarines, airplanes (including long-range bombers), tanks, and a large portion of sea and land transport. Oil was also used in the manufacture of munitions and synthetic rubber. Access to ample supplies of oil was a significant source of allied strength, while German and Japanese failure to gain access to oil was an important factor in their defeat.

Although the development of nuclear weapons and later ballistic missiles fundamentally altered the nature of warfare, oil-powered forces, and hence oil, remained central to military power. Despite the development of nuclear-powered warships (mainly aircraft carriers and submarines), most of the world’s warships still rely on oil, as do aircraft, armor, and transport. In addition, each new generation of weapons has required more oil than its predecessors.

Oil and World Power

While the demand for oil has been worldwide, the greatest sources of supply have been few and far between, and often in developing or underdeveloped countries. Disputes over ownership, access, and price have made oil a source of international conflict, particularly in the Middle East, which contains around two-thirds of known world oil reserves. Created in 1960, the Organization of the Petroleum Exporting Countries (OPEC) is a cartel of oil producing nations that has considerable influence in determining the rate of oil production and with it the price of oil. OPEC countries account for around two-thirds of the world’s known oil reserves and around one-third of world oil production.

In the first half of the twentieth century, the United States, blessed with a thriving domestic oil industry and firmly entrenched in the oil-rich region of the Gulf of Mexico and the Caribbean, controlled more than enough oil to meet its own needs and to fuel the allied war effort in both world wars. Following World War II, the United States made maintaining Western access to the oil riches of the Middle East a key element in its foreign policy. Control of oil, in turn, helped the United States fuel economic recovery in Western Europe and Japan and sustain the cohesion of the Western alliance.

The Soviet Union, in contrast, was unable to convert its control of extensive domestic oil supplies into political influence outside of Eastern Europe. In addition, despite geographical proximity, extensive efforts, and widespread anti-Western sentiment in Iran and the Arab world, the Soviets were unable to dislodge the United States from the Middle East. The Soviets benefited briefly from higher oil prices in the 1970s, but the collapse of world oil prices in the mid-1980s undermined efforts by Soviet reformers to use the earnings from oil exports to ease the transition from a command economy to a market economy while maintaining social welfare programs. In the post–Cold War twenty-first century, oil has allowed Russia to finance military modernization programs and reclaim some of its lost prestige as a world power. Similarly, oil reserves partially explain Venezuela’s sometimes bold stance in trans-American political affairs.

Peak Oil

Peak oil refers to the point in time when we reach the maximum rate of world oil extraction. Following the plateau, the rate of oil production begins to tail off into terminal decline. Optimistic forecasts predict that oil will peak in production sometime around 2020. Pessimists claim that peak oil occurred sometime in the first decade of the twenty-first century. In all likelihood we will only become aware of the timing of peak oil after the fact. Precisely what effect peak oil will have on prices, consumption, and world affairs more generally is difficult to determine. It depends in part on the viability of alternative energies.

The central role of oil in transportation and agriculture, and the absence of alternative energy sources that possess oil’s versatility, high energy density, and easy transportability, mean that oil prices and competition for access to oil will continue to be important issues in world affairs. Whether or not social, economic, and political patterns based on high levels of oil use are sustainable on the basis of world oil reserves, environmental scientists warn that they are not sustainable ecologically—that continuation of high levels of oil consumption will have severe and possibly irreversible impacts on the earth’s environment.


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