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00:05On the 5th of December 1952, Londoners woke up to a thick toxic smog that had blanketed
00:12the city. By mid-morning, all rail, road and air links were in a state of chaos. Reports
00:26of muggings and shop looting spiked as crime took hold. By the evening, people were choking
00:38to death in the streets. London was effectively in total shutdown for four days. By the time
00:51the fog eventually cleared, over 4,000 people were dead and hundreds of thousands more had
00:58been hospitalised.
01:03The cause of the catastrophe was this, coal. In the winter of 1952, for the first time in
01:10years, we were burning astronomical amounts of the stuff. So much so that it created a
01:15choking fog that consumed the entire city. It was a tragic event repeated across the
01:23UK, from Manchester to Glasgow, and it was triggered by one simple fact. Britain had run out of oil.
01:36Our society was addicted to the stuff, but had none of its own.
01:42As a result, we were totally dependent on foreign lands to get the supplies we desperately needed.
01:50So when in 1951, a man that nobody here had ever heard of suddenly stopped that oil flowing,
01:56Britain was brought to his knees, crippled and held to ransom by foreign oil.
02:03It was our first energy crisis. And the beginning of the most dangerous chapter in the story of
02:11planet oil. An era that would see the rise of a new superpower. That would come to control almost
02:20all of the world's oil. A time when those with it ruled supreme.
02:26The era of a very cheap source of energy is gone. And this is a new era.
02:33Whilst those without, realised just what they would have to do to get it.
02:40It's a how-to guide to overthrowing a government.
02:48It was the time when oil transformed from the most sought-after commodity on the planet,
02:53to a dirty political weapon. Geology was about to get dangerous.
03:12This is the United Arab Emirates in the Middle East.
03:19It's one of the driest, most barren regions in the world.
03:26A land scorched by 40 degree temperatures, where even survival is a challenge.
03:36Yet dotted around this region, there are signs of life. Towering monuments that
03:41have emerged from the desert in the last 75 years or so. As a result of a natural resource that's
03:47that's more abundant here than anywhere else in the world. Oil.
03:57Sprawling cities like Abu Dhabi, Riyadh or here in Dubai have literally grown out of this entire
04:04region's incredible oil wealth. Collectively, the Middle East nations are the biggest producers
04:14of crude on the planet. Pumping out around 65% of global supplies.
04:24It's incredible to think that 75 years or so ago, this region was desert.
04:30Cities like this certainly just didn't exist. It's an astounding transformation. But what drove it?
04:42The answer to that question is found in the meteoric rise of the Middle East's
04:46most powerful oil nation. A place that has become the undisputed king of crude, Saudi Arabia.
04:59And that story begins back in the 1930s with the exploits of a rather eccentric Brit.
05:13This might look like an Arabian prince, but in fact he's a very English gentleman.
05:22His name was Jack Philby and he'd been a key diplomatic figure in Britain's pursuit
05:28of oil in the Middle East throughout the early 20th century.
05:37But in 1925, he abruptly resigned after accusations of sexual misconduct and espionage.
05:50Instead of returning to Britain, he settled in Saudi Arabia, where, as a man well-rehearsed in
05:56Arabic custom and tradition, he had made many powerful and influential friends.
06:05And one stood out above them all.
06:09King Ibn Saud, the nation's ruling monarch.
06:15It was a relationship that was about to change planet oil forever.
06:24In 1931, during an automobile trip into the desert in search of water reserves,
06:31King Ibn Saud confided in Philby about the the perilous economic state of his country.
06:39Bitter tribal struggles had left the nation divided and bankrupt.
06:44So poor, in fact, that the king carried his entire treasury around in a saddlebag.
06:53Have you ever thought I'd get into oil production? Philby inquired.
06:57Oh, Philby, Saud replied, if someone was to give me one million dollars,
07:01I would give them all the concessions in the world.
07:05That casual exchange gave Philby the germ of an idea.
07:09An idea that would mark the beginning of Saudi's age of oil.
07:18Philby knew that the British government were desperate to exploit any part of the Middle East they could.
07:26And that gifting them another new territory at a knock-down price
07:29could prove the biggest prize in history.
07:35But he also knew that there were others just as interested in Saudi's oil potential.
07:44There's lots of speculation as to why Philby did what he did.
07:48Some say that he bore a grudge against all the charges of espionage and sexual misconduct that were leveled against
07:54him.
07:55But others say that, you know, he just wanted the best deal for the Saudi king in his country.
08:00But whatever the reason, one thing's for certain,
08:03Britain's man in Saudi was about to stitch his old country up.
08:12Philby deliberately led the British to the negotiation table,
08:16whilst all the while also holding secret talks with another party,
08:20American oil giant Standard.
08:24It would turn out to be a fateful double cross.
08:35In April 1933, the Saudi finance minister, Abdullah al-Suleman,
08:41sat down with a Standard Oil exec and signed away the rights to explore the country's oil potential.
08:53And all for a payment of just $275,000.
09:04Standard ultimately agreed to change their name to the Arabian American Oil Company, or Aramco.
09:12And for the next five years, they drilled the barren deserts of the Saudi kingdom in search of the black
09:18stuff.
09:23But what made them think they would ever find anything?
09:27At first glance, this doesn't seem a very sensible place to look for fossil fuels.
09:33After all, oil is cooked up from marine plankton and oceanic sediment.
09:37And, well, there's not a whole lot of that in this desert expanse.
09:42But, of course, this is the Middle East of today.
09:46Go back 100 million years or so and you find a very different environment.
09:55To find out more about how this now barren landscape was once a very different place,
10:01I'm heading into the desert with paleontologist Stephen Ehrenberg.
10:09We're hoping to uncover evidence not of desert, but rather a massive oceanic oil factory.
10:19And the clues that reveal that?
10:24Seashells.
10:26So, as you look around, you see fragments all over the place, really,
10:31of different types of shells.
10:35Wow.
10:36Some of them are quite big.
10:38Here's an example.
10:39You can see a little better if I dump the water on it.
10:42Oh, it really brings it out, doesn't it?
10:43So, that's quite a big one, yeah.
10:45So, this might be an extinct type of oyster.
10:47Yeah.
10:47It got very big in the Cretaceous time, 70 million years ago, when this was deposited.
10:52See, I think a lot of people find that surprising.
10:54Here we are in the Middle East desert.
10:56And we're finding seashells, marine organisms living here.
11:00Well, this entire area, actually most of Arabia, was covered by shallow ocean water,
11:10part of the Tethys ocean.
11:13This Tethys seaway was very important for the eventual formation of the oil deposits in the Middle East.
11:23There were periods when lots of marine organisms accumulated in the deeper parts of these shallow
11:31basins and formed organic rich rocks that could later be buried to expel their organic content as oil.
11:42So, it might look mundane to the passerby, but this is actually one of the most economically
11:46valuable rocks in the Middle East.
11:48Oh yeah, they're essential.
11:53Shells and more shells.
11:56These conditions found in the Tethys ocean created the perfect storm in geological terms.
12:02One that produced huge reservoirs of crude oil, more than anywhere else on the planet.
12:13And millions of years later, when that sea had become Saudi Arabian desert,
12:18American oilmen drilled holes across it, hoping to tap that massive potential.
12:24And they did.
12:31Aramco struck oil at a site called Damam No. 7 in eastern Saudi on March 4th, 1938.
12:41But whilst most oil wells usually leveled out after just a few days, this one just got bigger.
12:50Saudi Arabia had entered the oil age with a bang.
12:56And Damam turned out to be just the tip of the iceberg.
13:01More wells were tapped throughout the 30s and 40s.
13:05And by the end of the Second World War, it was clear that the reserves here were unlike anything else
13:10found before.
13:14Saudi Arabia was sitting on an ocean of crude.
13:19And with oil having become the most sought-after commodity in the post-war world,
13:23it wasn't long before this new bonanza attracted the attention of Planet Oil's biggest users.
13:34Both President Roosevelt and Winston Churchill emerged victorious from World War II,
13:39with their sights firmly set on the Middle East.
13:46They knew just how crucial oil was becoming in the modern world.
13:52And with Saudi Arabia now the biggest prize of them all,
13:55they both wanted it for themselves.
14:03In a shamelessly transparent act, both Roosevelt and Churchill wooed King Ibn Saud,
14:10making personal visits and showering him with gifts.
14:16Churchill's approach was uncharacteristically crass for an English gentleman.
14:21After the cultural faux pas of offering a teetotal Muslim ruler cigars and alcohol,
14:26he arranged to ship to the Saudi king a one-off, gold-plated Rolls Royce.
14:32A regal gift for a regal cause.
14:39Roosevelt, on the other hand, tugged at the heart, not the wallet.
14:46He'd done his homework, studying both the man and his culture.
14:51He travelled great distances to see the king, despite his deteriorating health.
14:56And showered him not with expensive gifts, but poignant ones.
15:02Such as the donation of his own wheelchair, from one polio sufferer to another.
15:10Roosevelt knew just how important Saudi Arabia was going to be, not just in terms of oil wealth,
15:15but in terms of America's entire future.
15:19This wasn't a type of extravagant gifts or gestures.
15:22This was about winning hearts and minds.
15:25Roosevelt called it right.
15:31The US would win big.
15:34Cementing a political alliance that guaranteed all Saudi oil would now be produced by American companies.
15:43Britain had just been shut out of the biggest oil deal of the century.
15:48Whilst the US government had secured its energy future with an endless flow of crude.
15:56And boy, did the oil keep flowing.
16:02By the 1940s, billion-dollar oil pipeline projects were pumping millions of barrels of crude,
16:10across continents, to Western consumers, who were using it for everything,
16:15from cars, to the latest wonder product.
16:20Plastic.
16:22Animal, vegetable, mineral.
16:25Maybe this little film will belong to a kingdom all of its own.
16:29The kingdom of plastics.
16:32Geology had never been more valuable.
16:35And with US politicians and private oil companies controlling it all,
16:40they had made sure that they would all be in the black for generations.
16:44You're crazy.
16:48But as the West revelled in its new oil nirvana, the political tide in the Middle East was changing.
17:01The oil free-for-all might have given Britain and the US energy security.
17:06But the boom had not gone unnoticed by their hosts.
17:12One morning in 1950, the Saudi Arabian finance minister sat down to read the paper.
17:23He came upon an article celebrating Aramco's triumphant oil finds in his country.
17:28A success he knew all too well, since this was Abdullah Suleiman,
17:33the very man who had signed Saudi's original oil deal with the US 20 years earlier.
17:44But it wasn't celebration that was in Suleiman's thoughts that day,
17:48but rather some jaw-dropping facts that the article revealed.
17:54Suleiman noted that the profits received by the Saudi government had gone up from 5 million in 1932
17:59to over 50 million by 1950.
18:03Good news.
18:04Not as far as he was concerned.
18:07If that was the increase in his nation's slice of the profits, how much was the company making?
18:15Suleiman decided to dig a little deeper, and what he discovered shocked him.
18:22In the years between 1944 and 49, profits had increased 40-fold.
18:30But the Saudis were guaranteed only a tiny percentage of that wealth.
18:36All very well when there was no oil.
18:38But now it was flowing so freely, Suleiman wasn't quite so happy.
18:45In fact, Aramco were paying more in taxes to the US Treasury than they were in profits to the Saudi
18:52government.
18:59Suleiman's country was being ripped off.
19:06That realisation would spark a seismic shift in the ownership of the Middle East's oil wealth.
19:14And Saudi Arabia's energy minister was the first to make his move.
19:23Suleiman first asked for, then demanded, a change to the concession that he'd signed in 1932.
19:29Saudi Arabia wanted a new trade deal, an equal 50% share in their own oil profits.
19:38Aramco didn't like the idea at all.
19:41But the execs knew that if they wanted to keep the oil flowing, they'd have to accept it.
19:47This was a new future.
19:54In December 1950, a new 50-50 agreement was reached between Aramco and the Saudi government.
20:04The age of private companies ruling over the world's crude was coming to an end.
20:11Now the nations that held the oil demanded greater ownership of their own resource.
20:19And anyone who wanted it had no choice but to bow to the new terms of trade.
20:25You know, it's hard to overstate just what a seismic shift in global oil relations this was.
20:31Suddenly 50-50 deals was the buzzword that reverberated around boardrooms throughout the Arab world.
20:38Middle Eastern countries were on the rise.
20:40All right, it was rooted in those perfect geological conditions that just happened to lie underneath them.
20:49With countries throughout the region quickly following in Suleiman's footsteps,
20:54it wasn't long before attention turned to Iran and Britain's oil interests.
21:04Anglo-Persian oil, or BP as it's better known today, had controlled the Iranian oil field since
21:10the early 20th century. But unlike others, they were no ordinary oil company.
21:22Thanks to Winston Churchill, they'd been majority owned by the British government since 1914.
21:29And as far as they were concerned, the idea of handing 50% of their oil profits back to the
21:35Iranian government was not even an option.
21:41But that blind obstinance was about to haunt them.
21:49In March 1951, the Iranian Prime Minister, Haj Ali Razmara, was assassinated amidst an air of
21:56increasing civil unrest in the country.
22:01Razmara had been supportive of Britain's colonial control of Iranian oil reserves.
22:07And as revolution brewed, he paid the ultimate price for it.
22:15In his place, the ruling Shah of Iran appointed Mohammed Mossadegh, a very different kind of leader.
22:26It had been just months since Saudi Arabia's new 50-50 oil deal had been agreed.
22:32And Mossadegh had watched it all unfold with interest.
22:38Now he was ready to make his move.
22:44I'm meeting Mossadegh biographer, Roxanne Farman-Farmian, to find out more about how this man was about to transform Britain's
22:52oil future.
22:59What was the relationship at that time like with the Iranian oil company and with the British?
23:04It was very contentious. There was a clear sense that the value of the oil was being lost to the
23:14British.
23:14There was very little that was actually being sent back to Iran.
23:18And that was the beginning, if you will, of this whole nationalization project that Mossadegh began.
23:26Because he simply felt that Iran deserved the right to its own resources.
23:31So how did the change happen where Mossadegh comes in and transforms that whole landscape?
23:40It was building up. There was a real break in the ability of British negotiators to see that the Iranian
23:49situation was beginning to reach a crisis point.
23:53It was not clear, perhaps, to those in Whitehall that this was truly something they were going to lose.
24:01There still was the sense that this contract could be negotiated. After all, there was still a lot of opportunity.
24:08It was just that the Iranians were being very pig-headed.
24:11Almost immediately at the outset, we were asked to accept the personal law as it stands.
24:18I replied that we could not do that.
24:21Mossadegh finally determines that there isn't going to be a deal.
24:25The government is an extremist government and it did not admit anything but a full surrender of all our rights.
24:32So the whole mantra started being nationalization, nationalization.
24:42Britain's refusal to share Iran's oil equally with the country's new political leader was a disastrous misjudgment.
24:52In the spring of 1951, Mossadegh seized control of all his country's oil fields and sent the British workers packing.
25:03The UK was completely frozen out of her only oil supply.
25:10Ever since the birth of the oil age, Britain's been worried about its energy security.
25:16All that political pondering, though, can be traced back to the day that Mossadegh took away Britain's oil.
25:23Nobody had ever done that before and it made us realize just how exposed we were.
25:27But in 1951, without oil, Britain was in serious trouble, an energy orphan for the first time in its history.
25:40The country quickly ground to a halt. Economic output was crippled and unemployment spiked.
25:52Even grand events like the festival of Britain was tried to lift spirits by showcasing a modern UK, served only
25:59to highlight the problem further.
26:03For the very things it promised, like new central heating in every home or a gadget-filled future, were all
26:11made from oil.
26:14Britain simply had to get its Iranian oil flowing again.
26:19But nobody was in the mood for another war, and a bankrupt UK government certainly couldn't afford one.
26:27The only way back was through diplomacy.
26:30And the newly formed United Nations was the place to do it.
26:40For the British, it was an open and shut case.
26:44They had invested millions in establishing the oil fields of Iran.
26:48And nobody had the right to illegally take them away.
26:53Unfortunately for the Brits, the UN didn't quite see it that way.
26:57The US sat on the fence, anxious not to jeopardize their interests in Saudi Arabia.
27:02Meanwhile, Mohamed Mossadeh rolled into town and denounced the British as a gang of thieves, draining his country of its
27:09mineral wealth.
27:11To be honest, many of the delegates studied a point.
27:14The political tide amongst the oil-rich nations of the Middle East was on the tongue.
27:21Britain's diplomatic offensive was doomed from the start.
27:27Mossadeh was going to keep his oil.
27:32And that deadlock simply meant continued fuel poverty for the UK.
27:37And a disastrous attempt to keep the country moving at any cost.
27:43The fateful return to coal and the terrible smog that resulted was the final straw.
27:52Oil had been used as a political weapon for the first time.
27:56But a modern society without oil was simply not an option.
28:07The only way Britain was going to get it back was to fight for it.
28:13And for that, they needed help.
28:21I'm in Washington to find out about Britain's next move.
28:28An event that was to become a landmark moment in the Planet Oil story.
28:35It's called Operation Ajax.
28:37And the plan was simple.
28:38It was to overthrow the Iranian Prime Minister.
28:41They put in his place a new man.
28:43One hand-picked by the US and the UK.
28:46A man who'd be sympathetic to Britain's predicament.
28:50Basically, someone who would give them their oil back.
28:52And this was the guy.
28:54A military general called Faziola Zahidi.
28:58This was going to be the world's first coup d'etat in the name of oil.
29:08I've been invited to take a rare look at some top-secret documents.
29:13Declassified just last year.
29:14I've been invited to take a look at some of these documents that provide a fascinating insight into how this
29:17coup would be played out.
29:25So what are these documents?
29:26Because it's got clandestine service history.
29:30It's got clandestine service history.
29:31Overthrow of Premier Mossadegh of Iran.
29:34It's just a fascinating account.
29:36It's a how-to guide to overthrowing a government.
29:43So who was pushing it and who was the main architect?
29:46Well, it occurred on different levels.
29:50They have right here.
29:51Director of CIA approves the operational plan on 11th of July, 53.
29:55So is that the foreign secretary?
29:56Is that the UK foreign secretary?
29:57That's the UK.
29:58Yeah, the director of SIS, which was MI6.
30:00British Prime Minister Churchill on the 1st of July and President Eisenhower on the 11th of July.
30:07So no ducking responsibility there.
30:09That's extraordinary.
30:10So that seems to be a really big deal.
30:14The leaders of two Western countries sign in this decree that would essentially overthrow another one.
30:20I wasn't quite sure what the Americans are getting out of this.
30:22I mean, they're putting all this investment in.
30:24What was on it for them?
30:25They had a very deep concern about the way events were working in the world.
30:33The Cold War was happening and they wanted, above all, to prevent the communists led by the Soviets
30:40from gaining inroads anywhere in the Middle East, anywhere where there were strategic resources.
30:45And, of course, oil was the big issue in Iran.
30:50Operation Ajax was a new approach to energy security,
30:54one in which political treachery was an acceptable tactic in pursuit of oil.
31:00With or without a royal decree, Zahidi will take over the government,
31:03will execute the various requirements of coup d'et.
31:06And as these documents show, there was no limit to the dirty tricks Britain and America were willing to pull.
31:13I noticed a million dollars.
31:16Yeah.
31:17The director, which is the Director of Central Intelligence, on April 4th, 1953, approved a budget of a million dollars,
31:23which could be used by the Tehran station, the CIA station, in any way that would bring about the fall
31:28of Mossadegh.
31:29And it's just nasty stuff.
31:32It's what they call black propaganda.
31:33It's to make Mossadegh look bad in any way possible, including, you know, calling him a homosexual,
31:40calling him a Jew, calling him a, you know, a pro-communist, calling him anti-religious, you name it.
31:46It's extraordinary to see it all just laid out in black and white.
31:49It is incredible.
31:53The hope with Operation Ajax was that by orchestrating political dissent like this,
31:59they would spark a revolution from within.
32:03Iran's own people would do Britain and America's dirty work for them and get rid of Mossadegh.
32:13But as this secret plot played out, things didn't quite go to plan.
32:28With the anti-Mossadeh propaganda seeded and civil unrest well established, Iran's leader began to smell a rat.
32:40Realising the deception, Mossadegh quickly gathered his prime ministerial guard around him.
32:49Meanwhile, the Royal Shah, who'd been persuaded by the British to go along with their secret plot, panicked and fled
32:56the country.
32:59Operation Ajax was in danger of falling apart, but for the CIA and an oil-desperate Britain, there was no
33:06turning back now.
33:12They intensified the campaign of civil unrest, only now encouraging it to become more violent.
33:26And with black propaganda also claiming their Shah had in fact been ousted from his country by their tyrannical prime
33:33minister, Mossadegh was doomed.
33:38By August 1953, he was arrested. The West's new hand-picked leader was in place, and the Shah returned.
33:59Mossadegh was quickly tried and would spend the rest of his life behind bars.
34:03Whereas Planet Oil's first coup d'etat was declared a triumphant success.
34:19But Operation Ajax would turn out to be something of a double-edged sword.
34:25Of course, Britain did get her oil back, but it won't cost.
34:28In the end, Britain had to settle for that 50-50 deal that it had so furiously fought to avoid
34:34in the first place.
34:35The war was for nothing.
34:39What this incident had really shown was that Planet Oil had entered a new phase.
34:45Where once powerful Western nations were now energy orphans,
34:48who would stop at nothing to ensure they got the supplies they so desperately needed.
34:59And for addicts like Britain, the victory of Ajax would soon feel like a miserable defeat.
35:08Far from putting the Middle East in its place,
35:10the Iranian crisis simply lit the touch paper of oil nationalisation.
35:18Mohamed Mossadegh became a poster boy to a generation of leaders in the region,
35:23all of whom wanted more control of their own oil.
35:27And that just meant more trouble for the UK.
35:35When, in 1956, Egypt's president, Gamal Nasser,
35:39became the latest Mossadegh follower to flex his muscles,
35:43Britain was about to feel the pinch yet again.
35:48Egypt didn't have any oil of its own,
35:50but it did have the Suez Canal running through it.
35:53A waterway that was essential for the transportation of Britain's crude
35:57from the Middle East into Europe.
35:59And Egypt's leader knew just how important that was.
36:10Nasser demanded control of the canal
36:13and the lucrative toll charges at set oil tankers.
36:21When the Anglo-French partnership that owned it refused,
36:24Nasser blockaded it with scuttled ships to show he meant business.
36:33Britain's oil transportation route from the Middle East into Europe was instantly shut down
36:37and the country was once again in serious trouble.
36:43For Britain it all had a very familiar ring to it.
36:47Yet again, another Middle Eastern country was holding them and their oil to ransom.
36:53And just in the case of the Mossadegh crisis in Iran, the outcome was going to be messy.
37:02The Suez crisis, as it became known, triggered yet more fuel shortages, driving restrictions and another economic slump in November
37:101956.
37:16Ironically, it even led to the creation of one of Britain's most famous cars.
37:23By the winter of 1956, Britain was literally running dry.
37:27The only cars that people could really drive were these tiny German bubble cars that ran on a smidgen of
37:33fuel.
37:33That was until Morris Motors designer, Alec Isagonis, came up with this little beauty.
37:39A new car for a new era.
37:42One in which only the smallest vehicles with the smallest fuel tanks could afford to run.
37:53Oil poverty might have given birth to a British icon, but what cars like the Mini really represented
38:01was humiliation and a terrible reversal of fortunes for a once great nation.
38:15The colonies they once ran were now in total control of the world's oil.
38:22And amongst these new Middle East giants, the black stuff flowed like never before.
38:33The term Elephant Field was coined, a name given to an oil reserve that produced more than 100 million barrels
38:41of crude.
38:45These kind of discoveries became ubiquitous across the region.
38:50By 1960, seven out of every ten barrels of oil being produced in the world came out of the Middle
38:56East.
38:59This place wasn't just the biggest player in planet oil, it effectively was planet oil.
39:09But being this plentiful also made it cheap.
39:15With so much oil on the market, its value plummeted to an all-time low.
39:22It soon became apparent that the Middle East's glut could in fact be its undoing.
39:32If profits were going to be restored, the industry needed a radical solution.
39:40And a radical geologist was about to step up and provide one.
39:46A man responsible for the creation of the world's most powerful oil club.
39:54But it's one that most people haven't even heard of.
40:00Excuse me, I've done a little survey. Do you know who these guys are?
40:04OPEC. OPEC.
40:06OPEC.
40:07OPEC.
40:08No?
40:09Do you know who these guys are?
40:11OPEC.
40:12OPEC.
40:13OPEC.
40:13Mean anything to you?
40:14Have you heard of these guys?
40:16No.
40:17No?
40:19OPEC.
40:20OPEC.
40:33OPEC.
40:33And I just wondered if you knew what OPEC stood for us.
40:36It's the first time I saw, I saw, I saw.
40:38It's the first time?
40:38Yeah.
40:39OK.
40:42No, it seems they've heard of OPEC.
40:45OPEC?
40:49We might not have a clue what it is, but the decisions that this organisation makes
40:54dictates how much our hydrocarbon lives cost each year.
40:58And that's precisely the reason it was created in the first place.
41:06In 1960, the world was producing too much oil.
41:09And this man wanted to do something about it.
41:16Juan Pablo Alfonso, the Venezuelan energy minister.
41:20And a key figure in South America's oil boom.
41:24Juan Pablo Alfonso watched the Middle East's meteoric rise throughout the 40s and 50s
41:29as oil nationalisation took hold.
41:31But with that rise, he also witnessed the decline in the value of oil.
41:39The new worldwide glut had made this once precious resource cheap.
41:45And Alfonso had a plan to make it valuable again.
41:49His idea was to bring together the world's top oil producing countries into a kind of
41:54private members club.
41:56But this was no idle gentleman's dining society.
41:59This was a group focused entirely on controlling production levels
42:03and setting a single unified price for their oil.
42:07It was a master stroke.
42:12In September 1960, Alfonso met with the Saudi Arabian energy minister and revealed his plan.
42:21The Organisation of Petroleum Exporting Countries, or OPEC, was born.
42:26And from that moment, the status of oil as a commodity would change forever.
42:34Never again would it flow freely throughout the world.
42:38Instead, it would be drip-fed by the nations who had it to those who could afford it.
42:46The world's addiction to oil would be controlled by a new all-powerful cartel of countries,
42:52who would fix their own prices and their own output.
42:55It was a win-win situation for the new Arab superpowers.
42:59But it was bad news for nations like Britain who didn't have their own oil.
43:06OPEC would grow rapidly as all the world's major oil producers joined the club.
43:10And by the early 1970s, its rise was complete.
43:18Western oil execs were replaced by slick Arab politicians, like the Saudi Petroleum Minister, Sheikh Zaki Yamani.
43:30They were now the new masters of crude.
43:36Doesn't this new massive increase in the price of oil mean a change in the world balance of power
43:40between the developing nations like you, the producers, and us, the developed industrialised nations?
43:47Yes, it will.
43:56If countries like Britain wanted their oil, they'd have to pay men like Imani the OPEC club price, or go
44:03without.
44:05But whilst the UK knew all too well just what it was like to be starved of the most precious
44:11natural resource in the world, for other Western users, going without had never been a problem.
44:21By the early 1970s, the US was getting the majority of its oil from Saudi Arabia.
44:27It had become the very lifeblood of American society.
44:32Nowhere on the planet was the age of hydrocarbon man more evident than in this country.
44:43Oil had made a generation of Americans more mobile than ever before.
44:53It had fed them.
44:58Clothed them.
45:05And built the very fabric of their lives.
45:14But with relations strong between US politicians and Saudi oil shakes,
45:19America's oil future was guaranteed.
45:23Wasn't it?
45:29I'm back in Washington to learn about a crucial turning point in America's oil story.
45:36I remember it quite well.
45:38People were becoming extremely agitated.
45:40They were getting in fights.
45:43There were even things where people were pulling out their guns.
45:47Really?
45:49It probably was one of the first major battles about guns in the United States and people just carrying their
45:58guns openly.
46:03The event that Washington cab driver Nathan Price is describing was a truly seismic one in America's history.
46:12A moment when its people were faced with a frightening question.
46:17What would you do without oil?
46:23And it was all down to that powerful new oil club, OPEC.
46:32It was October 1973.
46:35Egypt and Syria were at war with Israel over the occupation of Israeli-held territories in the West Bank and
46:42the Sinai Peninsula.
46:49The US was sympathetic to the Israeli cause and chose to resupply them with arms.
46:58It was a decision they would pay dearly for.
47:03To appreciate the scale of the disaster in the making, you have to understand that in this country,
47:07oil consumption had been rising at 5% a year from the previous decade.
47:11It was almost like every year Americans were finding new uses for the stuff.
47:16The US simply couldn't function without oil.
47:20And yet it was about to be forced to.
47:24OPEC, angered by US military support of Israel, responded in the only way they knew.
47:31By shutting off America's oil supply.
47:37In an instant, the US ran dry.
47:42Within a month, the nation was grinding to a halt.
47:48The cost of gasoline quadruple.
47:52And by November 1973, the US President, Richard Nixon, was forced to address the nation with a grave warning.
48:01This is a special report from CBS News in Washington.
48:05Good evening.
48:07The sudden cutoff of oil from the Middle East has turned the serious energy shortages we expected this winter
48:14into a major energy crisis.
48:21In 73, and I believe maybe it was even in 74, Richard Nixon did not have the national Christmas tree
48:29wasn't lit.
48:29It's quite symbolic, isn't it?
48:31It's very symbolic.
48:35What about other things?
48:36I mean, did you see kind of knock-on effects in the shops, prices going up?
48:40Oh, well, the biggest other thing that really got to people was the price of food.
48:46Everything that was produced that maybe needed transportation and oil.
48:50Yeah.
48:51It was like a trickle-down effect, and pretty soon, the consumer's pocketbook began to get hit.
48:59Was there a sense of panic at all?
49:00Oh.
49:01As people would walk around with a tube in the back of their car, so they could siphon gas off
49:09somebody's car.
49:09And people were pretty much staying on guard on their car and putting signs in the window.
49:17If you steal my gas, I will shoot you.
49:21This was completely new territory for America and its people.
49:25It was one thing for Britain to be starved of crude.
49:28But when the most powerful nation on earth had an oil drought, that was a step too far.
49:34Have you had trouble getting gasoline?
49:35I have.
49:36Tell me about it.
49:37Well, instead of getting a full tank, I get four or five gallons of liver full tank.
49:45But America's first oil shock also highlighted that this was only going to get worse.
49:53A solution simply had to be found.
49:59But where to find oil outside of the Middle East?
50:04The US had plundered its own reserves in less than 100 years, and Britain never had any of its own
50:10in the first place.
50:14The only place oilmen hadn't really looked for the black stuff was in what had been considered the last great
50:20frontier.
50:27It was a place the industry had always tried to avoid, simply because of the massive technological challenges of tackling
50:35it.
50:37But the world's big oil users were now desperate, and Britain more so than most.
50:45The UK economy had been crushed by oil droughts throughout the 50s and 60s.
50:55And the sea that surrounded her was the last hope of finding it.
51:04The North Sea's fossil fuel potential had first been identified in the early 1960s when a huge gas field was
51:11unearthed off the coast of Holland.
51:16Geologists who discovered the find also realised that the very same rocks that produced fossil fuels here ran all the
51:23way to the British coast.
51:26It was a tantalising clue that they too might contain oil.
51:33Those hot spots were all the incentive that an oil-desperate government needed.
51:38In 1964 they quickly introduced the UK Continental Shelf Act that divided the North Sea into something like 960 blocks
51:47or oil sectors.
51:49The race for Britain's oil was on, and everyone was invited to the party.
51:58But thinking there might be oil was one thing.
52:01Actually finding it was something else.
52:07I'm heading out into the North Sea to experience for myself just what a brutal baptism of fire that search
52:14was going to be.
52:22Britain's North Sea pioneers faced an almost unimaginable odyssey 100 miles into one of the most hostile seas in the
52:29world.
52:33And if that wasn't hard enough, they then had to drill down through hundreds of feet of solid bedrock
52:39to find oil reserves that they weren't sure even existed.
52:50Even with the invention of the oil rig, which allowed them to do that, this was a very risky business.
53:04In December 1965, just a few months after Britain's North Sea quest began,
53:10a small drilling rig called Sea Gem, located off the coast of East Anglia,
53:15made history by becoming the first to find fossil fuels in the North Sea.
53:23It wasn't oil they found, but gas.
53:26But as far as Britain's North Sea pioneers were concerned, where gas lay, crude would surely follow.
53:36It was a moment of hope that Britain might at last be about to find some energy of her own.
53:45But the elation was short-lived.
53:49It was just a few days after the discovery, Boxing Day 1965 in fact.
53:55The crew, 32 of them were inside, having a festive lunch when disaster struck.
54:06Heavy seas caused the legs of the rig to buckle and the whole structure just toppled into the North Sea.
54:1313 men died in those freezing waters.
54:16It was a tragic reminder of the cost of success.
54:22And the fact that today hardly anyone remembers the tale is probably because
54:26back then it was considered a price worth paying.
54:34Britain had tasted success and nothing was going to stop her now, not even human tragedy.
54:43And as the 60s gave way to the 70s, that potential tap by the Sea Gem turned out to be
54:49spot on,
54:50as the big oil fields everyone had hoped for began to materialise.
54:58BP's fabled 40s field was the first to be tapped in 1970.
55:04Quickly followed in 1971 by the discovery of Shell's North Sea giant, Brent.
55:09An oil field that produced as much crude as some of the Middle East's biggest reserves.
55:21It was clear that this was going to be huge business.
55:24And that made competition fierce amongst the big companies.
55:32The stakes were so high that secrecy was the order of the day.
55:36Shell used these Enigma codebreakers to relay the latest messages about oil fines.
55:41But as BP would send their messages in Farsi, Persian,
55:46even the British government had this coded alphabet to get the latest news about the North Sea.
55:50It was like something of a John le Carré spy novel.
56:00But that paranoia was justified.
56:03The Brent and Fortis fields alone promised around one million barrels of oil every day.
56:11And when the discovery of yet more oil fields across the North Sea followed,
56:15it was clear just how transformative this was going to be.
56:23Whenever a big oil field was discovered, it was tradition to hand out cigars to the rig workers.
56:28You know, celebrate the success.
56:30Well, in the 1970s, cigars were being handed over in box loads right across the North Sea.
56:36It was becoming clear that Britain was going to be filthy rich.
56:41And when the Queen formally opened the commercial taps of the North Sea oil fields in 1975,
56:46the entire world would wake up to just how much.
56:56If we use it right, this flood of energy can, without doubt, much improve our economic well-being.
57:07Government profits from oil production immediately added around 100 million pounds to treasury corpals.
57:15And by the late 1970s, the UK had become an oil exporter for the first time in our history.
57:23We had finally unshackled ourselves from our 20th century energy nightmare.
57:31This was going to be an age of plenty, and a boom the likes of which nobody had seen before.
57:39What could possibly go wrong?
57:45As oil giants and politicians together celebrated this new age of oil wealth,
57:50a dark speck hovered on the horizon that was about to threaten not just the North Sea,
57:55but the whole industry's very existence.
58:01Global warming.
58:04We were all about to be reminded of just how dangerous our addiction to fossil fuels had become.
58:15Could Planet Oil afford to keep using the black stuff?
58:19Or where are we going to have to go cold turkey and give up this precious resource forever?
58:37Coming up here on BBC4 tonight, the ultimate survival solution.
58:40We go into the heart of the swarm with George McGavin next.
59:00We'll see you next time on BBC4 tonight, and we'll see you next time on BBC4 tonight.
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