How Oil Became King

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'Forest of fuel: Long Beach oil field, California, 1923

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How Oil Became King

By Richard RhodesPublished in History Today Volume 62 Issue 8 August 2012Industrial Revolution Science & Technology

The great historical shifts in energy use, from wood to coal, to oil, nuclear power and beyond,

have transformed civilisation and will do so again, as Richard Rhodes explains.

The history of energy transitions – from wood to coal and from coal to oil as well as natural gasand nuclear power – is a long one. Energy transitions take time, as Arnulf Grübler of Yale’sEnvironment School points out:

Hardly any innovation diffuses into a vacuum. Along its growth trajectory, an innovation interactswith existing techniques … and changes its technological, economic, and social characteristics … Decades are required for the diffusion of significant innovations and even longer time spans are needed to develop infrastructures.

The diffusion process is one of learning and humans learn slowly. The substitution of coal for

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wood was fundamental to the Industrial Revolution. Coal had been used for 3,000 years, but onlmarginally. Its characteristics were wrong for a society organised around burning wood,compared to which it was dirty: it required different skills and technologies to collect anddistribute and its smoke was more toxic. In Tudor England, where wood smoke was thought toharden house timbers and disinfect the air, chimneys were uncommon; the smoke from fires wassimply allowed to drift out of the windows. But 16th-century London suffered from a problemfamiliar to cities in developing countries today: as they grew, an ever greater area around thembecame deforested and, as transportation distances increased, wood became more expensive.The poor switched to coal, which the rich resisted, as the atmospheric chemist Peter

Brimblecombe points out:

Even in late Elizabethan times the nobility still objected strongly to the use of the fuel. Well-bred ladies would not even enter rooms where coal had been burnt, let alone eat meat that had been roasted over a coal fire, and the Renaissance Englishman was not keen to accept beer tainted with the odour of coal smoke.

Brewing, however, was one London industry that turned to coal as wood and charcoal becamescarce; so did dyers, lime-burners and salt- and soap-boilers. The nobility began to accept thetransition after Elizabeth I’s death in 1603, when the throne passed to James I, already James V

of Scotland. Scottish nobles faced wood shortages earlier than the English and had access toless sulphurous coal, ‘so the new king used the fuel in his household when he moved to Londonaccording to the historical demographer Tony Wrigley.

Coal thus became fashionable. By 1700 production in England and Wales had reached threemillion tons per year – half a ton per capita. By 1800 production had tripled. There were twofundamental technological challenges to increasing coal production. One was that deepeningcoal mines penetrated the water table and flooded the mines: the water needed to be pumpedaway, for which purpose steam engines were developed. ‘Three quarters of the patents issued inEngland between 1561 and 1668,’ writes Wrigley, ‘were connected with the coal industry … and… a seventh were concerned with the drainage problem.’ Since the steam engines burned coal,

the new energy source was bootstrapping itself.

The other fundamental challenge of using coal was its transportation. Wood, which grewdispersed across the landscape, could be transported efficiently in small batches in carts and onriver boats. Coal was not areal, like wood, but punctiform – that is, it came out of the ground.Efficiency required its transportation in bulk. At first it was delivered by sea from mines nearports. There were 400 smaller colliers – boats carrying coal – working between Newcastle andLondon in 1600. By 1700 that number had increased to 1,400 and the boats were larger. By 170‘about half of the total British merchant fleet by tonnage was engaged in the coal trade’. As usegrew and mines were opened inland, coal drove the development of canals.

The technologies developing to meet the challenges of coal production combined. The firstrailways, horse-drawn, had connected pitheads with coal wharves to move coal onto colliers. Thsteam engine, mounted on wheels that ran on rails, offered greater speed. ‘Railways werepeculiarly a mining development (even down to the track gauge),’ writes Wrigley:

And were created to overcome the problems posed by large-scale punctiform mineralproduction, initially as feeders to waterways, but later as an independent network.Like canals, they also proved of great benefit to other forms of production and easedthe movement of vegetable and animal raw materials. Moreover, they developed agreat passenger traffic.

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Energy transitions transform societies, yet they are complex phenomenon, as these twoopposing views of the coal transformation suggest. The first view is that of the economic historiaDavid Landes, author of The Wealth and Poverty of Nations  (1998):

The abundance and variety of [the Industrial Revolution’s] innovations almost defycompilation, but they may be subsumed under three principles: the substitution ofmachines … for human skill and effort; the substitution of inanimate for animatesources of power, in particular the introduction of engines for converting heat intowork, thereby opening to man a new and almost unlimited supply of energy; [and] the

use of new and far more abundant raw materials, in particular the substitution ofmineral for vegetable or animal substances. These improvements constitute theIndustrial Revolution. They yielded an unprecedented increase in man’s productivityand, with it, a substantial rise in income per head. Moreover, this rapid growth wasself-sustaining. Where previously, an amelioration of the conditions of existence …had always been followed by a rise in population that eventually consumed the gainsachieved, now, for the first time in history, both the economy and knowledge weregrowing fast enough to generate a continuing flow of investment and technologicalinnovation, a flow that lifted beyond visible limits the ceiling of Malthus’ positivechecks. The Industrial Revolution thereby opened a new age of promise. It alsotransformed the balance of political power, within nations, between nations, andbetween civilizations; revolutionized the social order; and as much changed man’sway of thinking as his way of doing.

The second view is that of Raphael Samuel, the radical British historian, commenting on Landes

This account has the merit of symmetry, but the notion of substitution is problematic,since in many cases there are no real equivalents to compare. The fireman raisingsteam in an engine cab, or the boilermaker flanging plates in a furnace, wereengaged in wholly new occupations which had no real analogy in previous times … Ifone looks at technology from the point of view of labour rather than that of capital, it is

a cruel caricature to represent machinery as dispensing with toil. High-pressureengines had their counterpart in high-pressure work, endless-chain mechanisms innon-stop jobs. And quite apart from the demands which machinery itself imposedthere was a huge army of labour engaged in supplying it with raw materials, from theslave labourers on the cotton plantations of the United States to the tinners andcopper miners of Cornwall. The Industrial Revolution, far from abridging humanlabour, created a whole new world of labour-intensive jobs: railway navvying is aprime example, but one could consider too the puddlers and shinglers in the rollingmills, turning pig-iron into bars, the alkali workers stirring vats of caustic soda, and awhole spectrum of occupations in what the Factory legislation of the 1890s wasbelatedly to recognize as ‘dangerous’ trades. Working pace was transformed in old

industries as well as new, with slow and cumbersome methods of production givingway, under the pressure of competition, to overwork and sweating.

The second great energy transition originated in the United States and, like the transition to coalit began with a preadaptation. Coal’s preadaptation was its substitution for domestic wood-burning, which then led to its application to steam power in mining, transportation andmanufacturing. Oil was first used as a substitute for whale oil, for illumination in the form ofkerosene, another example of substituting mineral for animal or vegetable raw materials. In 1860a year after Uncle Billy Smith struck oil at Oil Creek in Titusville, Pennsylvania, a pamphleteerwrote: ‘Rock oil emits a dainty light, the brightest and yet the cheapest in the world; a light fit for

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Old King Coal' guards his crown from the clutch of 'oil for fuel': From the US magazine Puck,1902.

kings and royalists and not unsuitable for Republicans and Democrats.’ Kerosene remained themost important oil product for decades, with smaller markets developing for naphtha; petrol,which was used as a solvent or gasified for illumination; fuel oil; lubricants; petroleum jelly; andparaffin wax.

At the beginning of the 20th century coal still accounted for more than 93 per cent of all mineralfuels consumed in the US and electric light was displacing the kerosene lantern in urban

America, with 18 million lightbulbs in use by 1902. Oil might have declined, as it was much moreexpensive per unit of energy than coal. But because it is a liquid it is also much cheaper totransport. Even as late as 1955 the cost per mile of transporting a ton of liquid fuel energy bytanker or pipeline was less than 15 per cent of the cost of transporting an equal amount of coalenergy by train. Large oil fields were discovered in Texas and California early in the century.Railroads in the American West and South-west almost immediately converted to oil becauselocal oil was cheaper than distant coal when transport was figured in. Total energy consumptionin the US more than doubled between 1900 and 1920, making room for oil to expand its marketshare without directly challenging the coal industry.

Steamships offered another major market. The US navy converted to fuel oil before the First

World War, a conversion which served as an endorsement for private shippers. As with coal, abootstrapping market was the oil industry itself, which used oil both to fuel its oil tankers and toprovide the energy needed for petroleum refining. As much as 10 per cent of all oil produced inthis period was burned in refineries.

The automobile secured oil’s market share. According to Nebojsa Nakicenovic, Professor ofEnergy Economics at the Vienna University of Technology:

Animal feed reached its highest market share in the 1880s, indicating that draftanimals provided the major form of local transportation and locomotive power in

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agriculture … Horse [-drawn] carriages and wagons were the only form of localtransportation in rural areas and basically the only freight transportation mode incities. In addition, they moved goods and people to and from railroads and harbours.

Henry Ford’s original intention was to develop a farm tractor. ‘It was not difficult for me to build asteam wagon or tractor,’ he wrote in his autobiography, first published in 1922:

In the building of it came the idea that perhaps it might be made for road use … Ifound eventually that people were more interested in something that would travel on

the road than in something that would do the work on the farms.

By manufacturing motor cars, Ford and his competitors relieved farm labour by reducing thedemand for animal feed. In Great Britain, for example, the annual feed bill for town horses in the1890s approached 100 per cent of the annual value of all crops sold by British farms. InNakicenovic’s analysis the automobile first substituted for and then displaced the horse-drawncarriage largely because it increased the radius of local transportation, allowing ‘entrepreneurs toexpand their circles of customers and [offering] a more flexible mode of leisure and businesstransport’. Only after that process was completed, in the 1920s, ‘did it emerge as an importanttransportation mode in competition with the railroad for long-distance movement of people andgoods’. Just at that time natural gas began penetrating major industrial markets, such as iron and

steel, cement, textiles, food, paper and pulp, which burned coal or had recently switched to fueloil, allowing petroleum to meet rising demand.

Preadaptations that prepared the way for the automobile included the availability of petroleum asa refinery by-product and the surfacing of roads for horse-drawn carriages. Eight per cent of allUS roads were already surfaced by 1905, when there were fewer than 80,000 automobiles in usbut more than three million non-farm horses and mules. The diesel engine was originallyconceived as a combustion engine for powdered coal, but the resulting ash ground and fouled itscylinders and pistons; diesel fuel, another refinery byproduct, made it practical. By 1950 fuelwood comprised only 3.3 per cent of aggregate US energy consumption and natural gas 17 percent, but coal and oil closely matched each other with more than 36 per cent each. Oil’s marketshare peaked in 1968 at just 43 per cent, much lower than coal’s earlier peak of 70 per cent.Natural gas had emerged to compete with oil only 20 years after the latter’s emergence.

The gap had been much wider between coal and oil: about 150 years. Today both are decliningas fractions of total world energy, although oil demand is at a maximum. ‘The oil industry still hasmost of its future in front of it,’ the physicist Cesare Marchetti predicts, with a mean loss ofproduction of only 1.6 per cent per year. But the longer future belongs to natural gas, whichMarchetti expects to reach a maximum market share of 70 per cent – the same dominance coalonce had – around the year 2040. Natural gas had time to gain a large market share because itsnext competitor, nuclear power, emerged seven decades later. Seventy per cent market share fo

gas will be a huge share of a huge market and if we ask where all the gas will come from theanswer seems to be that the search for hydrocarbons is controlled much more by geopoliticsthan by the probability of discovery.

The preadaptation that prepared the emergence of nuclear power has continued to haunt it. Inthe US, the Soviet Union, Great Britain, France and China nuclear reactors were developed firstof all to breed plutonium for nuclear weapons. Power reactors were delayed in the US in theyears immediately after the Second World War because everyone involved in the new atomicenergy enterprise believed that high-quality uranium ore was rare in the world, too rare to bediverted from weapons production. Early in the 1950s the US Atomic Energy Commission even

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considered extracting uranium from coal ash, where burning concentrates coal’s naturalcomplement of uranium ore (the Chinese are again considering the idea today). Well into the1950s almost the entire US production of uranium and plutonium was dedicated to nuclearweapons. Finally the US government offered bonuses to uranium prospectors for high-qualityfinds and the prospectors, reprising the California Gold Rush, unearthed the extensive uraniumresources of the Colorado Plateau.

Another delay arose from concerns for secrecy. In the US the Atomic Energy Act of 1946 madeatomic energy an absolute monopoly of the federal government. All discoveries were to be

considered ‘born’ secret – treated as secret until formally declassified – and the penalty fordivulging atomic secrets was life imprisonment, even death. All uranium and plutonium becamethe property of the government, just as beached whales once automatically became the propertyof kings. No one could build or operate a nuclear reactor except under government contract, norcould one be privately owned. All these restrictions and mindsets had to be revised beforeutilities could own or build nuclear power stations.

It is clear in hindsight that the careful evolutionary development of nuclear power in the UnitedStates, including the types of reactors developed and the nurturing of a solid politicalconstituency, was a casualty of the Cold War. Early in the 1950s the Soviet Union announced apower reactor programme and by then the British were developing a power reactor fueled withnatural uranium that countries without enrichment facilities might want to buy. In both casesCongress feared the US might be left behind. It amended the Atomic Energy Act in 1954 to allowprivate industry to own and operate reactors and government-subsidised construction began ona 60,000 kilowatt demonstration plant at Shippingport, the same year. The reactor design derivedfrom a Westinghouse Large Ship Reactor, a pressurised water reactor (PWR) developed foraircraft carriers. But to limit proliferation, Admiral Hyman Rickover, ‘father of the nuclear navy’,made the bold decision to switch from uranium metal fuel to uranium oxide. The PWRconfiguration met the needs of the US navy, but it was less than ideal for commercial power.Water was a less efficient but familiar coolant.

Uranium oxide, which became the standard light-water reactor fuel, is less dense than uraniummetal and conducts heat less efficiently. To make their compromised reactor designs competitivein a field dominated by relatively cheap fossil fuels, manufacturers pushed design limits,maximising temperatures, pressures and power densities. Tighter design limits led to morefrequent shutdowns and increased the risk of breakdowns, which in turn required more complexsafety systems.

More crucially, manufacturers began pursuing economies of scale by selling larger and largerreactors, without fully addressing the changing cost and safety issues such reactors raised. ‘Thelargest commercial facility operating in 1963’, two policy analysts write, ‘had a capacity of 200megawatts; only four years later, utilities were ordering reactors of 1,200 megawatts.’ But the

safety arrangements that government regulators judged sufficient at 200 megawatts were nolonger judged sufficient at 1,000 megawatts. So they began requiring further add-on safetysystems, escalating engineering and construction costs. Construction time increased from sevenyears in 1971 to 12 years in 1980, roughly doubling the cost of the plants and raising the cost ofthe resulting electricity. US Nuclear Regulatory Commissioner Peter Bradford would write laterthat ‘an entire generation of large plants was designed and built with no relevant operatingexperience, almost as if the airline industry had gone from Piper Cubs to jumbo jets in about 15years.’

Because of the increase in size and the correspondingly larger inventory of fuel, ‘engineered

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safety’ replaced ‘defence in depth’ as a design philosophy and it became impossible todemonstrate that large US power reactors were acceptably safe. Nor was a safety culturedeveloped and maintained among the operating teams at private utilities lacking experience innuclear power operations. It was these problems and not anti-nuclear activism that led to thecancellation of orders and the halt in construction that followed the Arab oil embargo, whichbegan in late 1973. Orders for some 100 nuclear power plants were cancelled, as well as thosefor 82 coal power plants – nearly 200,000 megawatts in all – because the oil embargo stimulateddramatic improvements in energy conservation in the US, as well as in Europe, that stalled alongstanding trend of increasing demand. ‘Who … would have predicted,’ physicist Al Weinberg

wrote, ‘that the total amount of energy used in 1986 would be only 74 quads, the same as in1973?’ Today, with demand once again increasing, US nuclear power is thriving: existing plantsare being relicensed to extend their operating life by another 20 years; plants left unfinished willprobably be completed and licensed; and new reactor construction utilising newer, safer andmore efficient designs is pending.

Fusion, if it can be made practical, fits in well with these historic trends in energy development.Like nuclear power it also continues another trend that Grübler and Nakicenovic have identifiedhistorically, a trend toward increasing decarbonisation, meaning a decrease in the amount ofcarbon or CO2 emitted per unit of primary energy consumed. The carbon intensity of primaryenergy use today is some 30 to 40 per cent lower than in the mid-19th century. The long-termtrend toward decarbonisation will not be sufficient by itself to limit or reverse a build up ofgreenhouse gas but at least it is moving in the right direction. Solar, wind and biomass also fitthis trend toward decarbonisation, but unlike those energy systems, fusion is punctiform ratherthan areal and the trend has been away from areal energy sources for more than 200 years.Renewables are also lower-grade energy sources than fusion, another trend in its favour.

In truth the world will need every energy source that can be found or devised. Coal as it ispresently used will no doubt continue to decline in world market share, but it may find renewal ina new form, as a liquid fuel supplementing petroleum. That would extend coal’s contribution foranother century. The fundamental human project is the alleviation of suffering through the

progressive materialisation of the world. In the longest run, into the 22nd century, nuclear, solarand fusion electricity and hydrogen fuel promise a healthier, cleaner environment, an adequatestandard of living, a life expectancy of at least 70 years and consequently a minimum of war andcivil conflict for a sustainable world population of even ten billion souls.

Richard Rhodes is an affiliate of the Center for International Security and Cooperation atStanford University and the author of The Twilight of the Bombs: Recent Challenges, New Dangers, and the Prospects for a World Without Nuclear Weapons  (Knopf, 2010).

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