Lesson 8 Introduction

Concepts to Consider for the Lesson

Lesson 8 pulls together many interesting aspects of the immediate post-war era and the entry into the turbulent 1960s. As we move through history, and we get into more contemporary times, we are starting to see the birth of oil industry aspects we are used to in the present day. This Lesson also introduces us to many cautionary tales which may have fallen on deaf ears, and not learning from them has destined us to be reliving the same issues in today’s world.

For example, in this lesson, we see how unrest and volatility in oil-producing countries can wreak havoc on those countries that depend on those exports. We also once again see the impacts of wild fluctuations in production, causing cycling between shortages and surpluses. These countries are household names now when it comes to global oil markets, but they were only coming into their own in the time period of lesson 8. These countries include Russia, the Middle East, and Africa. Profoundly oil-rich, but politically unstable, places.

OPEC comes into being in this Lesson, a formidable power in the 70s and beyond, but a bit unsure of itself and ineffective in it early days during the 1950s and 60s. OPEC introduced the idea that oil exporting countries had something to gain by working in collaboration, the same lesson the oil companies had learned so many years before, that they could have significant control over the market if they worked together. But the same Catch-22 that plagued the oil companies now faced the exporting countrie; they were producing more oil but getting less for it.

But what is probably the most interesting chapter of this lesson, and probable one of the most telling stories of the entire textbook, is Chapter 27, “Hydrocarbon Man”. After one reads how oil underpinned so many societal changes, it is easier to see why turning away from oil will not occur as easily, or as fast, as is being suggested by the renewable energy and climate change positions.

The reading from The Quest start to introduce us to changes to come, such as the entry of the North Sea oil region and how that impacts the global market. But even before then, Europe and the US domination in the Middle East starts to diminish, and the market is settling into a new profile with shifting influence and new players.

Learning Objectives

By the end of this lesson, you should be able to:

• Recall course concepts relating to the Post-war Petroleum Order and Crises
• Demonstrate an understanding of the role of oil in relation to pivotal events in history
• Discuss the role of oil in business applications, global markets, conflicts, energy security, and various unconventional applications

What is due for Lesson 8?

This lesson will take us one week to complete. Please refer to the Course Syllabus for specific time frames and due dates. Specific directions for the assignment below can be found within this lesson.

Questions?

Each week an announcement is sent out in which you will have the opportunity to contribute questions about the topics you are learning about in this course. You are encouraged to engage in these discussions. The more we talk about these ideas and share our thoughts, the more we can learn from each other.