EGEE 120
Oil: International Evolution

The Prize Chapter 17: Germany’s Formula for War


Consider the following questions:

  • What was Germany’s solution to their oil shortage?
  • Are there present day equivalents to Germany’s method for warfare?
  • Why was speed so essential for the Germans in their war efforts?
  • What was the key to the Battle of Britain?
  • What logistical challenges did the Germans face in Russia?
  • How did military objectives conflict with economic goals?
  • What were the challenges facing Rommel and how did he surmount them?
  • What lesson did Monte teach Rommel?
  • What legal options are available to deal with the actions of IG Farben during the war?
  • Is technology a necessary or sufficient condition for success in war?
  • Was America fighting an economic war?
  • What grand prize did Jochen Peiper’s forces fail to realize at Stavelot in eastern Belgium?
  • What happened to Rommel and Hitler?

Innovations in chemistry and synthetic oil production in national strategy

In June 1932, when Hitler was leader of the National Socialist party (before he became Chancellor in 1933), I.G. Farben, the German chemical giant, met with Hitler about the continuing Nazi press attacks against the company as a tool of “international financial lords” and “money-mighty Jews” for the fact that Jews were in some senior positions. The Nazis also had been criticizing the company for its expensive project to manufacture synthetic oil from coal. At that time, Germany, and, in fact, Farben, was the world leader in chemistry, and one of its scientists, Friedrich Bergius, had, in 1913, invented the hydrogenation method to produce high-grade liquid fuel from coal which Farben patented the rights to in 1926. The hydrogenation process involved heating large amounts of hydrogen with coal at high temperatures and pressure in the presence of a catalyst. Fischer-Tropsch process which involved steam reforming of coal to produce Syn gas (mixture of hydrogen and carbon monoxide) that was subsequently converted to synthetic oil was the competing technology, but wasn’t as successful. Hydrogenation could also produce aviation fuel while the Fischer-Tropsch method could not. Hydrogenation received the highest accolade when, in 1931, Bergius (the inventor) and Bosch (the Chairman of I. G. Farben) shared the Nobel Prize in chemistry.

I.G. Farben had argued that synthetic fuels from coal could cut Germany’s dependence on foreign oil and also reduce the pressures on foreign exchange. Hitler became engrossed at the meeting with Farben in the synthetic oil discussion and endorsed the idea. When he became Chancellor of Germany in Jan 1933, his vision of the new Germany involved the autobahns, the limited-access highways without speed limits and the Volkswagen – “the people’s car” in 1934. He wished to subordinate all of Europe to the Nazi Reich and himself, and build the Nazi war machine (bombers, fighter planes, tanks, trucks) that all depended on oil. Thus, independent oil supply was vital, and the synthetic fuels from I. G. Farben would become an important strategic source.

SO of New Jersey (SONJ) , which had unsuccessfully been exploring alternatives to crude oil as early as 1921 and had acquired acres of shale oil in Colorado with the hope of extracting oil out of the shale, showed interest in the I.G. Farben technology. SONJ saw the technology as a clear threat to its business and went into an agreement with I.G. Farben. They had no need to produce synthetic fuels because of the oversupply of crude oil but wanted to ensure that each stayed out of the other’s main fields of activity. SONJ would also rather use hydrogenation to increase the gasoline yield and boost octane out of crude oil. In 1929, the two companies made an agreement whereby SONJ had patent rights outside of Germany and, in exchange, I.G. Farben would receive 2% of SONJ’s stock, or 546,000 shares valued at $35 million.

Black and white headshots of Carl Bosch and Friedrick Bergius
Pictures of 1931 Nobel Chemistry winners Carl Bosch (left) and Friedrich Bergius (right) for hydrogenation.
Credit: Wikimedia Commons

I.G. Farben had made a large commitment to synthetic fuels, but the oil surplus with the discovery of East Texas and the Great Depression made the synthetic oil production uneconomical. The cost of producing the synthetic oil was, for example, about 10 times the price per gallon of oil from the Gulf of Mexico. The only hope of saving the synthetic oil business was some sort of state support or bail out as tariff protection was not enough. The aviation fuel potential of hydrogenation won I.G Farben the support from the Air Force, the Luftwaffe. The German Army also lobbied on behalf of Farben that Germany’s oil supply would not be adequate for its warfare plans. To put things in perspective, coal supplied 90% of Germany’s energy, while oil only accounted for 5%.

Germany’s “blitzkrieg” attacks and strategy on Europe: Beginning of WWII

Two things demonstrated the danger of foreign oil dependence in the mid 1930s to Hitler: in Oct 1935, when Italy invaded Ethiopia, Mussolini almost faced an oil embargo; also, the “hated” Bolsheviks/Soviets, who owned a large chain of gasoline stations throughout Germany, in Feb 1936 abruptly stopped its deliveries of gasoline to Germany. In March 1936, Hitler re-militarized the Rhineland on the border of France in violation of international treaty agreement. When he was not challenged, he prepared for war by 1940 by inaugurating a four-year plan which aimed to reduce foreign oil dependence through new technology and chemistry. Thus, synthetic fuels industry was to become a central part of the overall war plan.

A Black and white photo of Hitler with some of his generals
Hitler (left) pictured with some of his generals, 1942.
Credit: Wikimedia Commons

By 1937-38, I. G. Farben was no longer an independent company but an arm of Nazi Germany. The company was “Nazified” and all Jewish officials and the anti-Nazi chairman, Carl Bosch, who had signed the agreement with Standard Oil, had been removed. By the time Germany started WWII in Europe with the invasion of Poland on September 1, 1939, 14 hydrogenation plants were in operation, and by 1940 synthetic oil output was 72,000 barrels per day or 46% of total oil supply. In terms of military operation, the Bergius process accounted for 95% of the total aviation gasoline. Hitler never forgot about the importance of oil in war and, in fact, his strategic approach to war, the blitzkrieg (“lightning war” -fierce but short), was based on it and was meant to lead to quick decisive victory before one runs out of petroleum. The blitzkrieg strategy worked surprisingly well not only in Poland in 1939 but also in spring 1940 when Hitler’s forces overran Norway, the Low Countries, and France with ease.

In fall of 1940, Germany waged massive aerial bombardment of the British Isles and seemed on the verge of dominance in Europe. Thinking that blitzkrieg was leading to easy victories, it turned its attention to target the Soviet Union. Among the factors for targeting the Soviets were Hitler’s deep-seated hatred of Bolshevism, Stalin, and the Slavs. He also wanted to dominate Eurasia, as he saw nothing but “living space” for his new German empire when he looked east. He even suspected the British and Soviets had a secret deal when the British refused to give in to the 1940 massive aerial bombardment. And, of course, he also sought not only his personal glory but the oil in Baku and other Caspian oilfields.

Germany attacked Russia on June 22, 1941 in Operation Barbarossa. Three million German men strong, with 600,000 motor vehicles and 625,000 horses, struck along a wide front. Stalin resolutely refused to believe the prior warnings from the British, American, and even his own spies and was caught off guard. The Germans believed it would be another blitzkrieg of less than 10 weeks, but they seriously miscalculated their supply needs, the vast size of Russia, and the Soviet manpower & tenacity (6-8 million were killed or captured in the 1st year, and still, new men joined).

Most of Hitler’s generals sought in August to make Moscow the prime target, but Hitler refused and declared his usual line, “My generals know nothing about the economic aspects of war.” Hitler made his prime target Baku. Later, when Hitler changed his mind, critical time had been lost, and the Germans were now stalemated in the mud and snow of the fast approaching winter, just 20 miles from the Kremlin. General Yuri Zhukhov, on December 5 and 6, counter-attacked successfully to prevent further advance to Moscow and tying the German Army down for the winter. The Germans were also stalemated in their advance towards the Caucasus as they had completely underestimated how far their supply lines would stretch. Thus, the war that was to take less than 10 weeks turned to months, resulting in severe shortages of oil and other supplies.

Map showing the locations of forces in Europe
Map of the World War II theatre/area in Europe.
Credit: Wikimedia Commons

The Grand Prize and Strategy

In early 1942, Berlin made plans for Operation Blau with the objective to take the oil of the Caucasus and to march onwards for the oil in Iran and Iraq and then to India. Hitler had been convinced that there was absolutely no way Germany could win the war without access to the Russian oil and was determined to have it. The grand strategy was to have one attack through southern Russia and another from the southwest via North Africa. The Germans seemed on their way to achieving that goal in July 1942, and in mid-August reached the highest point in the Caucasus and in Europe. They required large amounts of petroleum but had outrun their supply lines and lost their advantage of speed and surprise. Thus, although Operation Blau was the quest for oil, the Germans ran short of it.

Black and White photo of General Erwin Rommel
General Erwin Rommel.
Credit: Wikimedia Commons

The North Africa military struggle took place almost totally on the new “principle of complete mobility” created by General Erwin Rommel & his Afrika Korps. Mobility, however, created a dangerous vulnerability in supply lines. Rommel was an imaginative master of both tank warfare and the mobile campaign. He was also a risk taker in strategy and tactics and established a reputation on the battlefield during WWI and was committed to a war of movement and boldness. In addition to his talent for tactics, he also had talent for improvisation. One thing he could, however, not fake was the fact that mobile warfare was absolutely dependent upon ample supplies of fuel, and supplies had to be delivered along very long lines. Rommel pushed ahead, and, at first, won stunning victories in North Africa against British forces. At one point, 85% of his transport was provided by captured British and American vehicles. Towards the end of May 1942, Rommel launched a major offensive on the British that went very well, and he pushed until his advance was halted in June near El Alamein, less than 60 miles from Alexandria, with Cairo and the Suez not far beyond.

The Axis powers felt they were on the verge of victory. Rommel’s grand goal was to push through Cairo, Palestine, Iraq, and Iran, en route to Baku and its oilfields. The convergence of the German forces in the Caucasus and Rommel’s forces at Baku would have achieved the grand prize and objectives of Hitler. However, while the Soviets held on in the Caucasus, the Allies successfully fended off the German attacks in North Africa. The Allies also intercepted the German and Italian codes that further helped in attacking the Axis shipping and supply lines. General Bernard Montgomery ("Monte"), a cousin of H. St John B. Philby, of the British forces was Rommel’s adversary who capitalized on Rommel’s very long and highly vulnerable supply lines. He caused Rommel to essentially run out of gas. In the weeks following the end of the Battle of Alam Halfa near El Alamein in September 1942, Rommel begged Hitler for more oil supplies at all cost. On September 23, he went to see first Mussolini in Rome and then Hitler on the Russian front. Instead of oil, he was awarded a Field Marshall’s baton by Hitler. Montgomery mounted a counter offensive on October 23 known as the Second Battle of El Alamein, and the Royal Navy and Royal Air Force destroyed the German aircraft and ships that were to provide the Germans with new supplies.

Black and White photo of General Bernard Montegomery
General Bernard Montgomery.
Credit: Public Domain

The winter of 1942-43 also saw a titanic struggle in Stalingrad. When Field Marshall Manstein begged Hitler to send the forces in the Caucasus to help in the fight at Stalingrad, Hitler refused and indicated, “Unless we get the Baku oil, the war is lost.” At the beginning of February 1943, the encircled Germans at Stalingrad surrendered, serving as Germany's first major defeat in Europe and sending Hitler into an uncontrollable rage. To make matters worse for the retreating Rommel Afrika Korps, too, the Allies also invaded Morocco and Algeria in the path of their retreat, leading eventually to the surrender of the last German and Italian troops in North Africa in May 1943.

The grand strategy failed due to a number of reasons including, Allied attacks on German fuel supply lines, the fierce Russian resistance, and Allied code breakers. Clearly, the bitter lesson learned by Rommel is illustrated by his statement, “The bravest men can do nothing without guns, the guns nothing without plenty of ammunition, and neither guns nor ammunition are of much use in mobile warfare unless there are vehicles with sufficient petrol to haul them around.”

The fallback on synthetic oil and the human cost

With German defeat in North Africa and Russia, by mid 1943, the dream of Hitler of convergence on the Baku Oilfield was now a fantasy, and Germany faced a huge fuel crisis and turned to coal-based synthetic oil production which was based on the great technological ingenuity of Bergius. Germany was in a state of moral bankruptcy. Albert Speer was commissioned to rebuild Berlin and given sweeping powers of the German economy. After 2 ½ years, he had managed a threefold increase in aircraft, weapons, and ammunition production, and nearly had sixfold increase in tanks, even at a time when the Allied forces were successfully bombing German targets such as the aviation industry, railway depots, and ball-bearing factories. Between 1940 and 1943, synthetic fuel production almost doubled from 72,000 to 124,000 barrels per day, and in the first quarter of 1944, the synthetic fuel plants provided 57% of total supply and 92% of aviation gasoline. The table below provides figures on German oil supply (bbl/day) over the period 1939 to 1944.

German oil supply (barrels per day) from 1939-1945.
Year Synthetic Other Total Share
1939 47,574 121,973 169,547 28.1%
1940 89,007 119,621 208,621 42.7%
1943 124,299 112,865 237,164 52.4%
1944, Q1 131,666 100,782 232,448 56.6%
1944, Q2 107,120 66,862 173,982 61.6%
1944,Q3 48,473 40,245 88,718 54.6%
1944, Q4 43,240 36,455 79,695 54.3%
1945, Q1 5,437 17,726 23,163 23.5%

The Nazi war economy and synthetic fuel industry was based on slave labor (by 1944, slave labor made up 1/3 of the total work force in the German synthetic fuels industry). The synthetic fuel and rubber plants were placed adjacent to the Auschwitz concentration camp in Poland. I.G. Farben, which had become deeply involved and an enthusiastic partner in the venture with the SS at Auschwitz, built its own “branch” concentration camp, Monowitz, because too many prisoners were dying or being debilitated from the other camps. Monowitz was a death camp or factory.

The noose tightens, Nazi German runs out of oil and is defeated

Black and White photo of General Carl Spaatz
General Carl Spaatz.
Credit: Public Domain

The Allies, led by General Carl Spaatz, set a new priority target – the German synthetic fuels industry and began bombing oil factories all over Germany. The goal was to deny oil to the enemy armed forces. On May 12, 1944, 935 bombers and fighter escorts bombed many synthetic factories including the giant I.G. Farben plant at Leuna. On May 28-29, the Allied forces attacked again. On D-Day, June 6, 1944, the Allies gained a foothold on Normandy, enabling regular bombing of the synthetic fuel industry. Before the attacks in May, synthetic fuel averaged 92,000 barrels per day, and by September output was 5,000 barrels per day. The Russians also captured the Romanian oilfield, depriving Hitler of crude oil. By autumn of 1944, the Luftwaffe was operating at 10% of the minimum required gasoline, and even breweries were converted to making fuel! Without fighter planes to protect the fuel plants, the destructive impact of the Allied raids grew. By fall 1944, the D-Day invasion had widened and driven the Germans out of France, and the Soviets were also pushing the Germans from the east. On December 16, Hitler threw in everything in, launching his last counter offensive in the Battle of the Bulge. Although the Germans had the advantage of surprise, they did not have enough resources, and on Christmas Day 1944, the German offensive was finally stopped and pushed back.

Interestingly, on December 17, a German unit under Jochen Peiper was within a thousand feet or so of a grand prize, the Stavelot supply dump, when the Allies set some fuel ablaze to create a wall of fire. Because the map Peiper had was dated, it failed to show him the correct location and magnitude of the dump, and they missed the bounty when Peiper had his forces go round the thin wall of fire instead of through it. The oil at the Stavelot dump would have enabled the German forces to push through to Antwerp and to the English Channel at a time when the Allies were disorganized and confused.

Rommel, who had been reassigned, was wounded shortly after the Normandy invasion when his car was hit by an Allied bomb. A group of army officers failed to assassinate Hitler three days later, and Hitler suspected Rommel had something to do with it and plotted to kill him, but because of Rommel’s popularity he could not carry it out publicly. In October 1944, two SS officers came to Rommel's house and gave him an ultimatum to either commit suicide or subject his entire family to danger. Rommel was given a poison pill that he swallowed a few yards away from his home; his death was attributed to brain hemorrhage, and he was given a state funeral.

By February 1945, German production of aviation fuel was down to a trickle-about 0.5% of the first four months of 1944, and German Army trucks had to be pulled by oxen as they had no fuel. To the end, Hitler still hoped for some magical deliverance, and it was not until the Russians were right on top of his underground bunker that he committed suicide with instructions for those around him to pour gasoline and burn his body. For his insane, violent vision, at least 35 million died!