THE PETROLEUM CULTURE
143
used with great effect. Consumers in the United States were finally
confronted with the real nature of their energy dependence, which
bolstered the emerging environmental movement. And, finally, the
oil-producing countries had tasted power and were ready to consolidate their position. The impact on the United States was that
inflation became embedded in the economy, based in large measure
by the increasing price of crude oil.
The oil-producing countries strengthened their position but had,
at this time, not achieved full cartel status. In fact, soon after this, all
of the oil-producing countries were at maximum capacity, with the
exception of Saudi Arabia.
Furthermore, in 1974, the Saudi Arabia took 60% of Aramco
(Exxon, Mobil, Texaco, and Chevron), and finally, in 1976, Aramco
was disbanded and the Saudi government (i.e. the Saud family)
took control of the estimated 149 billion barrels of reserves. The
new arrangement allowed the companies to have access to 80% of
production while being compensated 21 cents a barrel for operating
the production services.
The post-embargo period was represented best by the scramble
for oil everywhere by everyone at any price. While that was happening, exploration and development was targeted at western
countries where nationalization was not a concern.
In 1969, Phillips Petroleum struck oil in the North Sea with British
Petroleum (now BP) also striking oil in 1970; Shell and Exxon discovered the Brent field joined them in 1971. By 1975, oil flowed
from offshore pipelines to British refineries. However, the British
government considered nationalizing their portion of the field and
formed the British National Oil Corporation (BNOC), which held
title to the government's concession and the right to buy 51% of
North Sea production.
By the 1980s oil was considered to be a commodity and became
a tangible asset that was traded like any other commodity, such as
gold and money. As domestic production increased in the United
States, Exxon terminated the Colony Oil Shale project and also cut
back on oil exploration in 1982. In addition, shipping became more
efficient and the Alaska pipeline boosted output that contributed to
an excess of oil due to the increased supply from non-OPEC countries, which even surpassed oil production from the OPEC members.
By this time, the OPEC member countries had changed the way
that oil was handled on the market and had finally become a cartel
insofar as they price and production. In short, the market economy
143
used with great effect. Consumers in the United States were finally
confronted with the real nature of their energy dependence, which
bolstered the emerging environmental movement. And, finally, the
oil-producing countries had tasted power and were ready to consolidate their position. The impact on the United States was that
inflation became embedded in the economy, based in large measure
by the increasing price of crude oil.
The oil-producing countries strengthened their position but had,
at this time, not achieved full cartel status. In fact, soon after this, all
of the oil-producing countries were at maximum capacity, with the
exception of Saudi Arabia.
Furthermore, in 1974, the Saudi Arabia took 60% of Aramco
(Exxon, Mobil, Texaco, and Chevron), and finally, in 1976, Aramco
was disbanded and the Saudi government (i.e. the Saud family)
took control of the estimated 149 billion barrels of reserves. The
new arrangement allowed the companies to have access to 80% of
production while being compensated 21 cents a barrel for operating
the production services.
The post-embargo period was represented best by the scramble
for oil everywhere by everyone at any price. While that was happening, exploration and development was targeted at western
countries where nationalization was not a concern.
In 1969, Phillips Petroleum struck oil in the North Sea with British
Petroleum (now BP) also striking oil in 1970; Shell and Exxon discovered the Brent field joined them in 1971. By 1975, oil flowed
from offshore pipelines to British refineries. However, the British
government considered nationalizing their portion of the field and
formed the British National Oil Corporation (BNOC), which held
title to the government's concession and the right to buy 51% of
North Sea production.
By the 1980s oil was considered to be a commodity and became
a tangible asset that was traded like any other commodity, such as
gold and money. As domestic production increased in the United
States, Exxon terminated the Colony Oil Shale project and also cut
back on oil exploration in 1982. In addition, shipping became more
efficient and the Alaska pipeline boosted output that contributed to
an excess of oil due to the increased supply from non-OPEC countries, which even surpassed oil production from the OPEC members.
By this time, the OPEC member countries had changed the way
that oil was handled on the market and had finally become a cartel
insofar as they price and production. In short, the market economy