To claim The Prize to be a book on the history of oil already by such definition limits the impact this commodity has had on the development of society over the last 150 years. What it really is is an analysis of global economic and military history over this time period framed within the context of oil.
The book begins by concentrating on the historic period before World War I when Winston Churchill, as civilian head of the Royal Navy, began to see the importance of replacing the coal fired fleets of the British navy with those using oil in order to gain in speed and agility. Yergin chooses this as his starting point, even though he then moves back 60 years to the true founding, because this was an important turning point in how oil was used. It was at this time when oil became a "disruptive technology" as it moved from an energy source mainly used for providing light to one that would become the standard form of fuel for all transportation.
After this introduction, The Prize returns to its chronological unfolding using as the starting point a key series of scientific discoveries regarding oil's potential uses and then later to the first wave of major U.S. discoveries. Though oil's history can be dated back long before this, the foundation of oil as an industry and major fuel source has an American heritage. .
In 1859 the Drake Well in central Pennsylvania was hit thus sparking the first wave of oil mania. This mania brought all types of people from expert scientists and geologists to green thumb enthusiasts with nothing to lose. The creation of boom towns in desolate parts of the U.S. became common. These towns would quickly be erected often to satisfy the needs of the fortune seekers (booze and prostitution). Means for distributing the oil would be hastily devised with a very short term approach to get the black liquid to far off markets. Once the source showed signs of reduced volumes or a bigger source was discovered elsewhere, the towns would quickly find their streets and brothels empty. The comparisons between the boom towns and the massive cookie cutter neighborhoods erected in the last five years in the States during our latest housing boom are strikingly similar.
The next part of the book explores how the fragmented industry, from finding the oil to distributing it, paved the way for on opportunity of massive levels of consolidation and vertical integration. It was seized and later exploited mainly by one man - John Rockefeller of Standard Oil. Rockefeller bought other oil companies both large and small, keeping the efficient ones and merely closing down the others to limit any potential threat of competition. Standard Oil was the first true monopoly in the U.S., controlling 90% of the oil derivative, kerosene. Its dominance led way to growing discontent of the American public who lacked alternatives to Standard Oil products and became more aware of the incredible fortune being amassed by Rockefeller as a result. In 1911 the Supreme Court ruled that Standard Oil be split into 32 different regional companies who would then compete with each other for customers and markets.
World War I was a very labor intensive struggle fought and won in the trenches with limited reliance on machinery. World War II, as painted by Yergin, was a war in which oil played a decisive role in the outcome. Both Japan and Germany lacked domestic sources of oil and were therefore dependent on other countries, namely Romania and Indonesia, to provide the oil needed to power their ships, planes and tanks. The lack of this crucial resource and the failure in certain cases to effectively distribute it to the divisions in need led to losses at key junctures in World War II events . An interesting example is how German troops, led by the brilliant Rommel, were unable to seize control North Africa to the extent desired because at key battles they were without fuel needed to power their panzer tanks.
The U.S. and Russia were instead at a particular advantage because they could rely on domestic fuel sources. An agreement between the U.S. and the U.K. also meant Britain, whose North Sea source would not be found until decades later, was also able to receive its needed share of American oil. However, having access domestically is only one part needed for success. How you manage your operations is another. Yergin's description of a floating fuel station comprised of numerous ships and tankers that were able to provide fuel to other ship fleets in the South Pacific was fascinating. Though the author dedicated several chapters explaining why Japan and Germany were greatly hindered by their lack of oil, I found the book thin on other examples of Allied success.
The post-World War II era led to the rise of what Yergin defines as the "the Hydrocarbon man", i.e. the individual consumer who developed an ever growing thirst for oil. It also was the period of the oil producing dominance of the Middle East region. The book is probably at its strongest here. It brilliantly explains how the major oil companies established themselves with marketing (downstream) channels in the consuming countries and favorable partnerships with Middle Eastern countries. By providing technical expertise in this region they were given a disproportionately large share of the revenue generated from each new barrel. Later Yergin clearly explains how OPEC was born and the economic significance it played in the market - essentially by controlling two levers - setting supply levels as well as prices per barrel.
The 800-page book is referred to as "the Bible" of oil history. The magnitude of this industry in terms of global scale and historical importance over the last 150 years means that in order to effectively write one, all-encompassing volume a certain high level approach and style is necessary. Yergin succeeds in incorporating the macro level history and economic connections oil has played over this time period. However, by taking such an approach it is inevitable that some other aspects regarding such an important subject will be less adequately addressed.
I respect the focus Yergin took in writing the book and his unrelenting ability not to defer from it. However, there were two main faults I found in doing so. The impression he gave when discussing the "hydrocarbon man" and his insatiable thirst for oil was that the oil companies were passively responding to the demand for their product that was being begged for by consumers. However it was never discussed how this demand was stimulated to such excessive levels. What was lacking in the text was an adequate explanation as to why consumption levels grew at such astounding rates over these years. What were the relationships like between the auto manufactures and the oil companies? Certainly these industries were strongly connected to the centers of power in Washington D.C. yet was never mentioned.
Hydrocarbon man became dependent on the automobile due to lack of alternatives. The classic example of the removal of all tram lines in Los Angeles certainly encouraged such behavior yet it, nor any other relevant example was even eluded to. And why were such large vehicles in such demand? Yergin refers to the adaption of the first fuel economy standards in 1975 of 27.5 mile per gallon within 10 years as revolutionary step which led to a drastic reduction in oil consumption. Though the book was published in 1990, a few years prior to the SUV boom, it is hard for his praise of such regulation not to ring hollow considering the impressive gas mileage of the Ford Expeditions and other "light trucks" exempt from these standards. Such SUVs went on to make up 50% of all vehicle sales in the U.S. The automakers gained on the higher profit margins of these vehicles as well as special deprecation status they were granted for business purposes. Oil companies also make more money the more often consumers need to fill up their cars. Such a thrust by automakers towards these types of vehicles certainly pushed hydrocarbon man's demand for oil. These type of factors were absent in his book.
The focus of The Prize as a work of economic history also meant that the small time victims of such a massive industry were ignored. As someone who is far from an expert on the industry, I am still aware of tragic stories such as the one of Ken Saro-Wiwa's, who fought against Shell and the Nigerian government because of the environmental damage the oil drilling was causing in the Niger delta. A reference, at least collectively, to the victims of the oil industry as well as the environmental impact it has made was something due in the book yet was nowhere to be found.
Regardless, The Prize is required reading for those on all sides of the debate as it provides the foundation to what has become the lubricant of our daily lives.
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After three rather arduous non-fiction reads, I was more than eager for a quick injection of crime mystery, one of my favorite fictional genres. Hammett, most famous for The Maltese Falcon, is certainly one of the most well-regarded American mystery writers. And it was a late night viewing of The Maltese Falcon with its solid performance from Bogart and a quirky and devilish Peter Lorre as Joel Cairo that prompted me to dive further into the works of Hammett. 
