The Prize: The Epic Quest for Oil, Money, and Power

by Daniel Yergin

At the end of December, Richard Nixon wrote a very strong private letter to the Shah. Outlining “the destabilizing impact” of the price increase and the “catastrophic problems” it could create for the world economy, he asked that it be reconsidered and withdrawn. “This drastic price increase is particularly unreasonable coming as it does when oil supplies are artificially restrained,” said the President. The Shah’s reply was brief and totally ungiving. “We are conscious of the importance of this source of Energy to the prosperity and stability of the international economy,” he said, “but we also know that for us this source of wealth might be finished in thirty years.” The Shah had found a new role; he was now to be the moralist for world oil. “Really oil is almost a noble product,” he declared. “We were almost careless to use oil for heating houses or even generating electricity, when this could so easily be done by coal. Why finish this noble product in, say, 30 years’ time when thousands of billions of tons of coals remain in the ground.” It was also the Shah’s inclination to become the moralist for world civilization. He had words of advice for the industrial nations. “They will have to realize that the era of their terrific progress and even more terrific income and wealth based on cheap oil is finished. They will have to find new sources of energy. Eventually they will have to tighten their belts; eventually all those children of well-to-do families who have plenty t...