The Dictionary of Human Geography

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Suggested reading

ACIA (2004); IWCO (1998); Steinberg (2001);

UNEP (2006).

oil Petroleum, it is sometimes said, is the

economic bedrock of our hydrocarbon civiliza-

tion. The fuel ofmodernity, oil is an arche-

typal global commodity, the repository of

unimaginable wealth (‘black gold’) and part

of the largest business on Earth (seecapital-

ism). More than anything else, petroleum is a

sort of lie: it reveals the profound mystifica-

tion, the paradoxes and that contradictoriness

that surroundnatural resourcesin our mod-

ern world (Coronil, 1997).

If oil is a natural resource – arguably the

most global, the most strategic and among

the most valuable – what exactly is natural

about it? It is a flammable liquid that occurs

as a product of geophysical and biological pro-

cesses of great historical depth. A by-product

of pre-human geological history, oil is depos-

ited in subterranean formations and consists

principally of a mixture of hydrocarbons with

traces of nitrogenous and sulphurous com-

pounds. In practice, of course, the compos-

ition of what passes as petroleum varies quite

considerably, as one might anticipate in view

of the heterogeneous circumstances associated

with its 600 million year history of sedimenta-

tion and organic decomposition. Oil’s natural

properties, one might say, are unstable and

variegated (seenature).

Petroleum is customarily extracted through

drilled wells, pumped along pipelines and refi-

ned into different ‘fractions’ or components.

The science and practice by which oil is exp-

lored, located, pumped and fractionated has, in

the past 150 years, deepened and proliferated to

the point at which it is now part of a massive

engineering and technicalinfrastructure.The

oil industry is now dominated by the ‘majors’, a

cluster of transnational and highly diversified

energy companies (seetransnational corpor-

ations). It is sometimes said that oil drilling was

invented by E.L. Drake, when he sunk his now

infamous 69 foot well in Pennsylvania in 1859.

But several hundred years before the birth of

Christ, the Chinese were sinking 3500 ft wells

to exploit petroleum for a multiplicity of pur-

poses. Surface oil deposits had been used as

asphalt and as a sealant by Sumerians 3,000

years before the Chinese. In other words, oil’s

natural resource use spans a vast swathe of

human history.

Currently, oil and related gas exploitation

covers two-thirds of global energy needs:

according to the International Energy Agency,

by 2030 the figure will have fallen only mar-

ginally. Industrialized countries of the OECD

account for almost two thirds of world oil

demand. Global demand for oil is about 80

million barrels per day (compared to 47 mil-

lion in 1970). The USA consumes by far and

away the largest quantities of petroleum

(roughly 25 per cent) and is extremely depen-

dent on oil imports (largely from themiddle

east, Canada and Mexico, and increasingly

africa). The geology of oil and gas has a dis-

tinctive geography: two thirds of known oil

reserves reside in the Middle East (which is

overwhelmingly Muslim, a fact that has

assumed particular significance in the context

of 9/11 and the US occupation of Iraq). Saudi

Arabia, Iraq and Kuwait alone account for

almost 500 billion barrels of reserves. Over

three-quarters of all known reserves of petrol-

eum are found in eight oil-exporting countries.

The centrality of the USA in the global oil

acquisition strategy – a fact sealed by the spe-

cial relationship between the USA and Saudi

Arabia, made in 1945 – has meant that the

geopoliticsof oil have been a central plank

in US foreign policy over the past 80 years.

The US addiction to cheap oil – which is to say

to the automobile – turned, in the postwar

period, onimperialistrelations with three

key suppliers: Saudi Arabia, Venezuela and

Iran. By 2001, this policy had proven to be a

catastrophic failure – even if the US consumer

had benefited from oil prices at the gas station

that bore no relation to actual costs of produc-

tion (which necessarily would have to include

the massive expenditures on the military and

the costs of global climate change and other

‘externalities’).

The structure of the oil industry is charac-

terized by a recent (post-1970) reorganization

(Yeoman, 2004). The global oil and gas indus-

try is dominated by five transnational oil com-

panies (ExxonMobil, Chevron, Shell, BP and

TotalElfFina) with combined revenues over

$1 trillion, and a number of massive national

oil companies (owned by oil-producing

states). The assertive petro-nationalism of

the 1970s saw national oil companies account

for an increasingly large proportion of oil re-

serves, while transnational companies increas-

ingly moved downstream to control refining

and petrochemical sectors. Many of the

world’s most important oil producers are

petro-states, marked by an extreme depend-

ence (measured as a proportion of exports or

GDP) derived from oil and gas. Rentier econ-

omies of this sort are plagued by what has

been called the ‘resource curse’ (Auty, 2001):

Gregory / The Dictionary of Human Geography 9781405132879_4_O Final Proof page 510 30.3.2009 7:51pm

OIL