THE PRIZE. By Daniel Yergin. Simon & Schuster. 781 pages. $24.95.
AMERICANS who question why our government has gone to war over oil should read Daniel Yergin's fascinating history of the slippery substance. What he terms simply the "lifeblood of civilization" is responsible for the making and breaking of nations, the rise and fall of national economies, the winning and losing of wars -- to touch on just a few hydrocarbon highlights.
Saddam Hussein's bold gambit to control one-quarter of the world's oil reserves shattered more than just the post-Cold War euphoria. Demolished as well was the oil detente of the last half of the 1980s. For almost five halcyon years, the price of the world's most important commodity was just about right: not too high, as in much of the 1970s, nor too low as it was during the 1985-1986 glut. The difficulties of either extreme are myriad. Low prices sent America's domestic petroleum industry into a depression, made the nation ever more dependent on Mideast supplies and threatened the international financial order as overextended oil exporters like Mexico teetered on the brink of ruin.
When Iraqi troops invaded Kuwait last August, it was clear that the United States had to react quickly or risk forfeiting its role as both a leading economic and political power. Yergin points out that a triumphant Saddam would be able to intimidate his oil-producing neighbors and bankroll an aggressive political agenda -- perhaps even the renewal of war with Iran. As with Kuwait, Iran's oil reserves and infrastructure are temptingly close to the Iraqi border.
The history of the viscous substance that sustains our civilization cannot easily be separated from history itself. Black crude had been oozing out of the good earth for millennia prior to 1859, when Edwin L. Drake inaugurated the Hydrocarbon Era by attaching a common hand pump to his 69-foot-deep oil well in Pennsylvania. In ancient Mesopotamia, which included what is now Baghdad, bitumen was used as mortar, caulk and even medicine almost 5,000 years ago. The handy substance bound the walls of Jericho. In Homer's "Iliad," the Trojans employed it to burn Greek ships.
But in 1859 humans learned how to coax the wondrous black genie out of the ground. At first it gave us light and heat and later propelled our cars, factories and engines of mass destruction. Oil gave birth to the first multinational corporation, John D. Rockefeller's domineering Standard Oil. It also launched America as a world power. By 1940 this country was producing 63 percent of the world's supply, and our surplus was crucial to England's survival against Germany in 1940-1941 as well as the eventual triumph of the Allied forces in World War II.
But Americans were not only producing the most oil; they were using the most, too. From 1945 to 1950 the nation went on an oil-fueled bender. We haven't stopped yet. By 1948 the United States was importing more oil then it exported, and the center of the hydrocarbon universe would soon be the volatile Middle East. The prize, as Yergin so aptly terms oil, was slipping from our control, as the next four decades of geopolitical wrangling would make increasingly clear.
Yergin's thorough research and eminently readable prose makes plain that what we have experienced in our lifetime is nothing new. In 1905 an unsuccessful rebellion in Russia was the first time that politics interrupted the international oil trade. Joseph Stalin, a budding Bolshevik, helped shut down the Baku oil fields during that dress rehearsal for the 1917 Russian Revolution. (Saddam Hussein, interestingly enough, has cited Stalin as one of his role models.) Between 1918 and 1920, the price of oil jumped 50 percent and was far more costly to consumers than it was in 1986. In the 1940s (among other times) there was widespread fear that the world would soon run out of crude.
Yergin does not indicate directly what the United States and its allies should do about Saddam. He simply outlines the unpleasant potential of having the world's most precious resource being brought under the control of a ruthless, unpredictable, anti-Western megalomaniac.
George Bush, a former oil man, certainly has demonstrated since last Wednesday that he won't let Iraq keep the prize. Other Americans insist we should not have sent young people to their graves over oil. Some Arabs believe that Bush actually set Hussein up for this showdown, that with Iran and the Soviet Union in a weakened state, only Iraq was powerful enough to thwart our interests in the Middle East.
Who gets to keep the brass ring will be determined soon. Both sides want and need it badly. Each has put itself in a position where losing the prize may be perceived as more terrible than the death of thousands upon thousands of its people. Will the 1990s mean a return to the uncertainty and high prices of the 1970s, when oil was used as a political weapon? Or will the new decade imitate the late 1980s?
Yergin ends his book on a note which transcends the present crisis: The miraculous substance that has built our civilization may ultimately be hazardous to our life-support systems. The next century may see warning labels on gasoline pumps: Gas May End Life As We Know It On This Planet.
David Holahan writes from East Haddam, Conn.