Iron, carbon, gold, silver, uranium, titanium, silicon
deuterium (a heavy form of hydrogen)
oil is composed of hydrogen and carbon
Human progress can be measured by our ability to harness greater amounts of energy and so transform the world. it gave us the ability to expand our productivity
Carbon’s most powerful a liance is with iron. We need only to look around, at the railways, the factories and the skyscrapers
In the most specialist applications, for which iron is too weak or heavy, futuristic titanium metal has been used to accomplish triumphs of air and sea exploration. But far more pervasive than titanium’s use as a metal in supersonic aircraft and deep-diving submarines is its use as bright white titanium dioxide. In that form, titanium is everywhere around us, feeding our obsession with purity, cleanliness and façade. Milk is no purer and shirts are no cleaner as a result of the titanium dioxide that whitens them. It is their whiteness that satisfies some urge within us.
oil barons in Russia, merchants in Venice, tribesmen in Colombia and computer wizards in Silicon Valey
The cast-iron artilery cannons of the Prussian army had twice the range and were far more accurate and more numerous than the French bronze pieces.
When filing up a car at a petrol station, or flicking the switch on a wal socket, most people rarely see how dependent our energy infrastructure is on steel. Al the steps in the energy chain, from exploration to production to refining and generating electricity, rely on technology built with iron.
Pure iron is soft, but adding carbon breaks up the lattice of iron atoms so that the atoms can no longer easily slide past each other, thus producing hard steel. Add too much carbon, however, and the iron, caled cast iron, becomes brittle and shatters when it is struck.
in 1856 the chance discovery of Henry Bessemer, an English inventor, led to a process which carefuly controls the balance of carbon and iron on an industrial scale. This invention, which is stil used today, has had the single greatest impact on the development of the modern steel industry. the Bessemer process. In 1854 Bessemer met with Napoleon III, who wanted a superior quality metal so as to improve his artilery pieces.
Bessemer was not an ironmaster, but an inventor, engineer and businessman in a very broad sense. He believed that his discovery resulted from the fact that he was not steeped in the traditional practices of making iron.
Bessemer’s success in the iron industry led him to become a founding member and subsequent President of the Iron and Steel Institute, predecessor to the Institute of Materials, Minerals and Mining in London.
Despite being one of the world’s greatest inventors and engineers, Bessemer is not thought of alongside Thomas Edison, James Watt or the Wright brothers. Perhaps it is because he is the inventor of a process, rather than a product. Carnegie who, using the Bessemer process, became the richest man in the world. Carnegie was not an engineer; his skil was in putting proven inventions to their best use. Carnegie became Bessemer’s salesman.
When demand slowed, Carnegie would increase, rather than reduce, the output of his steel mils. He would take a contract whatever the profit margin, beating the competition down using his economies of scale. His steel mils were always the biggest, the most automated and hence the lowest cost. He would immediately reinvest profits to expand and modernise his steel empire. He also integrated his business horizonta ly and vertica ly, buying up rival plants and bringing coke works and iron ore mines under the umbrela of his steel company.
The railroads were the greatest consumers of iron and steel as more goods and more people began moving from the east to the west of the US.
Carnegie, the child of a poor handloom linen weaver from Dunfermline, Scotland, arrived in the US in 1848 practicaly penniless. By 1863, at the start of his entrepreneurial career, Carnegie’s income was around US $50,000 (almost US $1 milion today). In 1901, Carnegie sold his steel empire for US $480 milion (US $13 bilion today) to J. P. Morgan in what was the largest commercial transaction of its day to consolidate into US Steel. Carnegie became the richest man in the world.
Standard Oil Company of Ohio, where I was the Chief Financial Officer.
Rockefeler became the world’s first nominal bilionaire in 1916
The duty of the man of wealth, Carnegie claimed, was to set an example by living a modest and unostentatious life. The wealth of the individual had been created by the wider community, and so it should be returned to them.
his philanthropy was designed for people’s self-improvement rather than subsidising them day to day. As a result, he invested heavily in education, building libraries and providing free tuition for Scottish university students.
His work had a great impact on Rockefeler
The house of Tata
believed that four ingredients were necessary for industry to flourish in India. First, technical education and research were needed to reduce India’s reliance on foreign technology. Second, he saw that hydroelectricity would utilise India’s huge supply of water to generate cheap electricity. Third, he made plans to build a grand hotel, to attract the wealthy international elite to India. Fina ly, and most crucia ly, Jamsetji wanted to produce steel, ‘the mother of heavy industry’, for the building of railways and cities.
Unlike Carnegie, the Tatas did not pursue profits at a l other costs; they believed that a business that supports the development of a nation must also support the health and welbeing of its people.
Dorabji’s decision to build ‘a city’, rather than ‘a row of workmen’s huts’, would run contrary to the fundamental business principle of maximising shareholder value. Dorabji’s shareholders were the people of India, whereas today shareholders are largely private individuals.
Carbon is the fuel supply in gunpowder. In ancient China, where the first fireworks were invented, honey was the source of carbon; the drier the honey, the greater the carbon content.
when they are mixed with oxygen from the air and a spark is added, heat is released. Releases carbon dioxide and water vapour.
Today, by far the largest consumer of coal in the world is China. By the time of the Han Dynasty, beginning around 200 BC, coal was being used on a large scale for both domestic and industrial purposes. It is not surprising that humanity’s first use of coal was in China.
China became the centre of innovation for the world. It invented gunpowder, the compass, paper and the printing press, the soca led Four Great Inventions. These took many centuries to reach the West.
Escaping the ‘Malthusian Trap’
Writing in 1798, Thomas Malthus observed how, throughout history and across different cultures, living standards had not grown.15 Humanity existed perpetua ly on the threshold of basic subsistence. Agrarian societies did develop new technologies to increase food production, but this only led to an increase in the population and reversion to a level of basic subsistence. Economic resources could never outpace population growth; humanity was stuck in a ‘Malthusian Trap’.
Between 1750 and 1850, Great Britain’s industrial output grew seven times, while the population grew less than threefold. Steam engines replaced manual labour because coal in an amount equal to the weight of a man can produce the equivalent energy of the same man working for one hundred days.
China’s use of coal has fueled unparaleled growth and reductions in poverty over the last three decades. By 2035, China is projected to consume almost as much energy as Europe and the US combined.
Herein lies China’s dilemma: how can it continue its rapid economic growth and reductions in poverty, but do so sustainably? The scale of the cha lenge is unprecedented: China is home to one-fifth of the world’s population
From an early age, Henry Ford understood the power of carbon fuels. As a young boy, he built a steam turbine next to the fence of his school. It exploded, setting the fence on fire and slicing open the boy’s lip. ‘A piece hit Robert Blake in the stomach,’ he wrote in his notebook, ‘and put him out.’
The realisation of just how that might be done came when he was twelve years old, while trave ling by horse and cart to Detroit with his father. Ahead of them Ford saw a cart drawn very slowly by a steam engine fueled by coal. That scene made a lasting impression on him
Randomly driling wels to find oil would achieve little. It would be like trying to find needles in a haystack. There are always clues that guide explorers to the areas more likely to be winners. An oilfield has certain essential characteristics. First, there needs to be a source for the oil. This source is the remains of plants and animals laid down milions of years ago, which have been subjected to the right pressure and temperature to form oil. Flying over the forests in the centre of Trinidad, I saw lakes of inky black oil which had bubbled up from just this sort of source. The La Brea tar pits in California were formed in a similar way. Both were clues to the presence of other oilfields. Second, the oil needs to get from the source into an overlying structure which can trap it. This often has a domelike shape (an ‘anticline’) that sometimes expresses itself on the surface. Anticlines can be seen from the air in the Zagros foothils of Iran, my childhood home. These are the site of some of the greatest oilfields in the world. Third, the trap needs to be sealed by an impermeable rock. If the seal is breached the oil escapes. One of the most famous and most expensive wels, caled Mukluk, that turned out be unsuccessful (a ‘dry hole’), was driled in Alaska. For years, BP’s explorers were convinced that it was going to be a guaranteed success. It failed because the seal had been breached and the oil had seeped away. Finaly, the structure needs to be filed with a sedimentary rock that can contain the oil in its pores (the so-ca led porosity) and let it flow. The ease with which the rock a lows the oil to flow is caled the permeability. If a l these things come together then there is an oil reservoir.
Today, typically 60 per cent or more of the oil is left behind after an oilfield stops producing. The reason for that lies in the economics; extracting more oil becomes increasingly costly and therefore unprofitable.
Henry Darcy, a nineteenth-century French engineer working in Dijon, was a careful observer. He watched water go through the different types of rock at the bottom of public fountains and wondered what controled its speed. Soon he came up with an equation that described the rate of flow of a fluid through permeable rocks. It is caled Darcy’s law and the measure of permeability is caled the ‘darcy’ in his honour. The law gives us a way of explaining four different ways in which the flow of oil out of a reservoir can be improved, known colectively as enhanced oil recovery (EOR). First, if the natural pressure of the reservoir is too low to get the oil to the surface, you can increase it by injecting other fluids, such as water, natural gas, nitrogen or carbon dioxide. This is often the first and simplest method of improving the recovery of oil. Second, you can expose more of the reservoir to the wel bore by, for example, driling horizontaly along the rock strata. Third, you can make the oil less viscous or prone to staying in the spaces between rocks (the oil is held there by a force caled surface tension). One way to do this is to pump in fluids, particularly liquefied carbon dioxide, so that it mixes with the oil. Another way is to heat the oil. This is necessary for so-ca led heavy oil found in Canadian and Venezuelan tar sands.
In recent years, however, as the price of oil has risen, the potential for EOR has grown rapidly: in the five years up to 2009 the market for EOR was estimated to have increased by twenty times.
Organisation of Petroleum Exporting Countries (OPEC), a cartel which controls around 40 per cent of global oil production
As Sheikh Yamani, Saudi’s former oil minister said in the 1970s: ‘The Stone Age didn’t end because we ran out of stones.’
The financial and technological effort needed to deliver a barrel of oil is extraordinary. To make the oil into petrol takes even more work. It needs to be refined into just those types of hydrocarbons that an engine needs. Even at $4 a galon, gasoline seems cheap after a l this work. It is, after a l, cheaper than most bottled mineral water served in chic restaurants in New York City
Rockefeler’s behaviour is, in some ways, reminiscent of today’s Russian oligarchs. They have accumulated wealth on a similar scale, many having started from poor backgrounds just like Rockefeler. They have also made their money by, at times, foul and unfair means. And like Rockefeler, some of the oligarchs have now matured to a point where they want to give some, or al, of what they have earned back to society.
John D. Rockefeler always thought that ‘oil is almost like money.’78 Such easy wealth can breed complacency and, with little to strive for
Diamonds can be used to hide vast wealth in a minute volume and, by avoiding paperwork, traded without trace. De Beers, who contro led around 80 per cent of the world’s diamond trade.8