Mineral Economies Flashcards
Thomas Jefferson
- Republican worldview - civic virtue, denial of luxuries and independent citizenship. The small, self-sufficient farmer was the paragon of virtue. Urban factories would lead to the development of a subservient working class; hence any industrial production should be situated in pastoral rural settings along streams.
Josiah White
- Josiah White - “The steam engines spread all over England are said to perform many times over the labor of the entire population of that country. The coal for those engines comes on their canals . . . Canals are the foundation of their wealth.”
Mackenzie King, 1918
- Political economist working for Rockefeller to deal with strikes.
- “What might§ not happen, in America or in England, if upon a few days’ or weeks’ notice, the coal mines were suddenly to shut down, and the railways to stop running!… Here is power which, once exercised, would paralyse the… nation more effectively than any blockade in time of war”
- Becomes PM of Canada, implements a welfare state regime.
Lewis Mumford
“The effect of introducing liquid fuel… was to emancipate a race of galley slaves, the stokers”
James Forrestal, 1948
‘Unless we had access to Middle East oil, American motorcar companies would have to design a four-cylinder motorcar sometime within the next five years’.
William D’Arcy
- 1901 - Purchased from the Shah of Persia an agreement that, so long as he proceeded with exploration, the government would allow no other company to build a pipeline to carry oil to the country’s southern shore. This blocked the construction of a Russian pipeline to the Persian Gulf.
- 1903 - outputting 25bpd. (v low, not profitable)
Winston Churchill
- Commenting on the deployment of Air Power in Iraq; claiming it would create ’an independent Native State friendly to Great Britain, favourable to her commercial interests, and costing hardly any burden upon the Exchequer’.
Henry Morganthau
The new monetary system would ’limit the control which certain private bankers have in the past exercised over international finance’ and drive ‘the usurious money lenders from the temple of international finance.’
Josef Hecker
- 1817 - encountered the issues of transport. Secured a contract from the magistrate of Prague for 3000 tonnes of oil at 340 florins per metric tonne. Transportation problems, leaky barrels and transportation costs of 2/3rds that of the price of oil forced him to breach his contract. Others in later years attempted to emulate: with 20 oil pits dug in Borystaw by 1835.
MacGarvey
- Canadian oil specialist (1860s), moved to Galicia in 1882; bringing Canadian drilling techniques by 1884. This allowed access to previously unheard-of depths and unimaginable speed. Instead of 20 centimetres, drillers could reach 24 metres in 24 hours, and reached depths of over 1,000 meters, well over the previous limit of 150m.
- Alongside drilling, MacGarvey obtained exploration rights, as well as refineries and factories to repair drills, engines etc. Also produced barrels, storage containers, setup pipelines and stored petroleum for competitors at a high cost.
President Diaz of Mexico
In a bid to encourage capitalism in Mexico, Diaz permitted the transfer of the rainforest from the natives to the oilmen through the land laws of the 19th century.
Calvin Coolidge
Developing aircraft indicate that our national defence must be supplemented, if not dominated, by aviation. It is even probable that the supremacy of nations may be determined by the possession of available petroleum and its products’ - National Security ethos.
Enrico Mattei
New contract to replace 50:50 arrangement, and would add local representation equalling number and power of Western representatives. Iran would receive 50% of gross profits via tax, then 50:50 division of company net profit -> 75% of profits to Iranians. Additionally, ENI would pay costs of exploration; only after discovery would National Iranian Oil Company pay half of costs.
In one blow, Mattei destroyed the system on which the Seven Sisters rested; and offered an organic method to dominate the M.E. 7 days after signing a contract with Iran in 1957, Mattei signed an analogous contract with Libya.
Carbon Democracy
- Democracy is conceived as having universal principles.
- Industrialisation transformed agriculture. New demands from cities and urban environments put disproportionate strain on agricultural lands.
- Coal-based mass production was dependent on the ability of colonies to provide surplus land and labour to serve the metropole.
- 19th c. Leading economies situated near high-volume coal reserves (Central and Northern England, South Wales, Ruhr, Upper Silesia, Appalachia). Resources relied on canal networks to transport.
- Channels of energy concentrated power with miners. In US, resulted in 3x more strikes than average. (Did the worker truly know the power of coal?)
- 1889 - Kaiser Wilhelm II concedes on social reform policy despite Bismarckian hardline; also called for international conference (1890) to develop international solution to governance of strikes.
- 1906 - Rosa Luxembourg - argued that workers now had the capacity to incapacitate through the means of a General Strike.
- 1920s - Triple alliance of mine workers, dockers and railwaymen - however broken by Government - GS 1926.
- Oil-related industrial action: Baku (1905); Venezuela (1922/1936); Mexico (1937); Iran (1945-6)
- 1920 - 60-80% of oil was exported. Coal -> mainly domestic -> too expensive to ship.
- Oil transport was flexible - did not necessarily have defined flows (ships would go to a waypoint to receive further instruction). This also denigrated the power of workers.
- TNCs sought new mechanisms to limit the production and distribution of energy - like quotas, price control, limitation of discovery in the ME. TN oil corporations by the 1950s had discovered tools to regulate abundance and scarcity.
- Post-WWII, techniques to transform carbon energy abundance to scarcity:‘National Security’: WWII gave US companies opportunity to wind down production in Arab countries.
- Ibn Saud demanded funds for lost revenues - US responds with lend-lease to make nation not produce oil.
- Encouragement of consumptive culture dependent on ‘extraordinary quantities of energy’.
- V6 engines were replaced with V8 engines as the dream of the middle-class family.
- At the same time, Europeans had perfected four-cylinder cars (Morris Minor, Beetle), and even two-cylinder (Citroen 2CV) and one-cylinder vehicles (Isetta 250)
- American lifestyle, and political arrangements in the ME, helped oil companies to ensure that oil companies kept supply scarce.
- New points of vulnerability: oil wells, pipelines, refineries, railways, docks and shipping lanes in the ME.
- Trans-Arabian Pipeline Company - initially supposed to terminate at Haifa, however in 1946 diverted to Sidon - passing through Southern Syria - fear of Palestine and Zionists.
- Loss of Gold Standard devastating for Europe. Power now dependent on flows of oil. America possessed 80% of world’s gold, due to European need to send gold bullion to the US for arms and oil.
- 1945 - US = 2/3 oil production.
- ERP - $432.5 million to purchase US vehicles. Encouraged building of roads.
Anglo-American Petroleum Agreement
- Established an International Petroleum Commission to allocate production quotas and manage prices, much as the International Monetary Fund, created at Bretton Woods, would allocate borrowing quotas and manage the value of currencies.
- Killed by Senate. Preferred existing arrangement: Texas Railroad Commission and local regulators in US to set production quotas and prices to international scheme.
Saudi Arabia
- US signed an agreement with King Ibn Saud which exchanged production and marketing of oil for Washington’s support in suppressing militancy. Marshall Plan funded Europe to postpone reconstruction of coalfields + purchase oil supplied from the M.E. But purchased in USD.
- 1955 - British Report - ‘the international ramifications of the oil industry (including its tanker operations) are so large and complex as almost to constitute oil as a currency itself.
- “These seigniorage privileges enabled Washington to extract a tax from every other country in the world, keeping its economy prosperous and thus its democracy popular.”
National Income / GNP
- Measure not of accumulation of wealth but of the speed and frequency with which paper money changed hands. Could growth without problem of physical or territorial limits. Oil contributed to new conception of economy:
- Oil declined continuously in price. 1970-> 1/3 of 1920 price. Although consumption increased, cost of energy did not represent limit to growth.
- Due to ease of shipping, oil could be treated as inexhaustible. Cost did not include calculation of reserve depletion. Nor did it account for damage from depletion of energy resources.
- Oil wells and pipelines of M.E. + Political arrangements made possible the idea of Keynesian democracy.
- Paradigm reorganised in 1967-74. Companies began to treat oil as finite. Precipitated by rise of Ba’th in Iraq - developed first non-west oil company.
- West decision to starve region of capital by cutting production in Iraq led to nationalisation of assets.
- Doubling/ tripling costs of oil allowed US to explore opportunity for oil in Alaska - previously too expensive.
Royal Dutch/Shell - Venezuela
1914 - General Gomez requests that the refinery is built offshore, on Curacao. Wanted money from oil but not unionisation.
US President’s Science Advisory Committee 1965
Humankind has been ‘unwittingly conducting a vast geophysical experiment’. Burning fossil fuels led to injection of CO2 - increased atmospheric CO2 by 25% by 2000.
Coal
- Britain - 1820: freed an area of woodland equiv. To surface area of country. Doubled every 20yrs.
- 1912 - Britain exported 1/3 of its coal (accounting for 2/3 of coal export globally). 90% of this went to mainland Europe. Too heavy and bulky to affordably ship; unlike oil.
- Sabotage: Emile Pouget - Le Sabotage - within a year adopted in English to refer to slowdown, work-to-rule and other means of preventing the normal functioning of a critical function.
- ‘With two pennies worth of a certain substance, used in the right way, we can make a locomotive unable to work!’ - French Railwaymen’s union, 1895. One person stopping 3mW of energy is a substantial disruption.
- Solution - industrial democracy - encourage people to join company unions - more direct access to negotiation but banned from joining nationwide unions.
- Post-WWII, national oil strike precipitated the death of company unions in the US, but saw the introduction of productivity as the new science of industrial management.