Review: The Prize – Daniel Yergin

I recently read The Prize by Daniel Yergin. It is, put very shortly, a history of the development of the oil industry on our planet. Such a vast topic could never be placed into one volume, as Yergin has here. He chose to focus on one very important facet of the industry: the US experience in oil industry development. And rightly so: the story of the rise of the American Empire relies heavily upon the story of oil development, implementation, marketing, and dominance. This book is almost 2000 pages of that story (almost 1400 in narrative, and about 600 in supplemental resources).

Yergin begins by describing the development of US oil starting in the 1850s, in western Pennsylvania. He provides an interesting and well developed history of oil development in the USA, the Dutch East Indies, the Russian Empire (now, Baku, in Azerbaijan), Venezuela and the Middle East. He focuses on the influence of the British, French, and Americans, and to a lesser extent, other imperial powers of the era. He always takes time to describe the powerful, determined and disciplined men who drove development of the oil industry, and this focus on personality and relationships makes the book worthwhile.

Yergin takes us through the world wars, with heavy emphasis on oil as a primary driving factor, especially for Japan’s actions in the Pacific. After the US embargo on oil which began on 1938, Japan felt it had no choice but to establish other oil supplies by force. The attack Pearl Harbour was launched to provide breathing room so they could do so in southeast Asia.

Yergin then finishes the narrative, going through the post WWII events that impacted, and were driven, by the ever present race to secure oil supplies. This is the prize all these nations strive for: controlling their own energy supply, so they can maintain their sovereignty, and controlling other’s oil supplies, as a way to control them too. (I have often said in this blog before, if your country does not control its energy supply, someone else will, and it is they who will exercise a great deal of control in your country, not you. To fail to control or engage with your energy industry is to surrender sovereignty.) The Suez Crisis, the oil price shocks, OPEC embargoes, in particular the complex relationship between the US and the Saudis, and US intervention in the Middle East, are all documented here. Yergin stops the detailed analysis with the liberation of Kuwait in 1991. An epilogue covers the period up to 2008.

The Prize does have a few faults. Throughout, it gives the impression that Yergin is explaining all significant events as if always motivated by oil. I do not think Yergin meant to do this. He does create this impression by using a method of explaining a historical event, describing how it impacted or was impacted by the oil industry, and then moving on to the next event. Given the size of the book, there is little room for subtlety or nuance when trying to summarize such a complicated area of history.

Another concern of note is that many significant areas of the oil industry get hardly a mention. I’ll nitpick at his treatment of Canada. It maybe gets half a dozen mentions in the entire book. Canada is the third largest exporter of oil in the world, and depending on who does the math, has either the 2nd or 3rd largest reserves. Yet we get little time in The Prize. Why the short shrift?

Brace yourselves, Canuckistanis: oil supplied from Canada is largely controlled by the Americans. Most of our oil comes from Alberta and Saskatchewan, and goes through pipeline systems either in the US, or controlled by the US. Even a large part of the oil from western Canada that goes to the Empire of the St. Lawrence spends much of its transit time in pipelines and facilities in the US. Canada’s supply is largely controlled by US interests, and can therefore be considered part of US domestic supply. There are exceptions, such as the TransMountain terminal in Burnaby, B.C. But, as the Americans know, you do not need to control every single drop of oil, just a significant part of it, to make sure Canadian producers do not take actions which might impact supply or prices.

Trans Mountain Pipeline terminus map. Note the interconnect into Washington State.
No, it does not carry ‘tar sand’.

All the wrangling that has gone on with oil pipelines in Canada (including the effective killing of several oil and gas pipelines to Canada’s Pacific coast) in the name of the environment and climate change always seem to benefit American interests in the end. (Brandon’s efforts to kill Keystone expansion are a notable apparent exception, but it actually proves the rule. I speculate that his action is beneficial to the US in a way, keeping Alberta oil in the ground, which may keep prices up, and provides a nice reserve should US domestic and Middle East supplies become compromised at some time in the future.)

Back to The Prize. Canada’s treatment in the book is the fate of most countries which have provided little drama in the world oil markets: they are mentioned, and that’s about it. In a book this size, you have to make such choices, or you end up writing forever.

All told, I’d recommend The Prize for those who are interested in learning about the big scale events and ideas of the world oil industry. Also, it is for those who want to get a sense of who the major players were, and still are, to this day. It may also be a good read for those who deal with Americans and the US oil industry. US oil has deep roots, and the book helps explain their sometimes idiosyncratic behaviour. In oil, the race never stops, and the prize they are striving for is sovereignty.

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