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The First Drop

Let's go back to the very beginning.

Petroleum is not a modern discovery. In ancient times, people gathered oil that seeped naturally from the ground. According to Herodotus, asphalt was used more than 4,000 years ago in the construction of the walls and towers of Babylon. And depending on who's reading the clay tablets, the upper strata of ancient Persia employed oil in medicine and for lighting.

The Chinese have been drilling for oil and gas, which they found occurring with brine (their primary target), for centuries. The date of their first use of petroleum is unknown, but there was drilling in Szechuan as early as 400 BC. Bamboo pipelines were built to carry the accompanying gas over short distances. By the first century BC, Chinese engineers were drilling to depths beyond 800 feet.

By the late sixteenth century, wells over a hundred feet deep were being hand dug near Baku, in what is now Azerbaijan.

Today's petroleum era began in 1846 at Baku, then a lonely spot in the Russian Empire. Baku lies on the windy Absheron Peninsula, at the foot of the Caucasus Mountains, on the western edge of the Caspian Sea. It was there that the first modern oil well was drilled—modern in the sense that the shovel and hand drill were discarded in favor of percussive hammers and other mechanized equipment.

What had begun in Russia arrived in America 13 years later, in Titusville, Pennsylvania, where Edwin Drake completed the first commercially successful U.S. well that had been drilled solely for oil. It reached a depth of 70 feet and produced 25 barrels per day.

Drake's well ran dry just two years later, but its discovery set off a fervid search for petroleum, one that quickly expanded beyond Pennsylvania and eventually stretched to the four corners of the earth.

At the time, petroleum was used as a lubricant or to produce kerosene, which was easy to handle and could be used for heat and light. Kerosene's primary by-product, gasoline, was far more volatile and was rightly seen as dangerous to handle. Demand was limited to users who were willing to deal with the risk of explosion. Attempts to use it in lamps often ended in fiery disaster.

The invention of the four-stroke internal combustion engine in 1876 changed everything for gasoline and hence for oil. Gasoline went from unloved to most popular and became the dominant term in the profit equation for petroleum refining. Soon, the fuel was on its way to the status of military necessity. An army that ran out of gasoline would be an army that had run out of chances.

Russia recognized oil's importance earlier than most. In the latter part of the nineteenth century, Baku was the most productive oil region in the world. After hundreds and possibly thousands of years of bucket gathering, mechanized techniques brought a 200-fold increase in production between 1875 and 1895.

Russia's czarist government welcomed foreign investment, and Baku's population grew faster than that of London, Paris, or even New York. Auctions of petroleum-rich land to investors, primarily European, began in 1872. From there, it was off to the races. By the turn of the twentieth century, Baku was producing nearly half the world's oil. Capitalists making fortunes in Baku included the Rothschild family and

Ludvig and Robert Nobel, who entered with financial backing from their brother Alfred, the inventor of dynamite.

At the same time, other Russian oil deposits were being tapped directly across the Caspian Sea, on the Cheleken Peninsula in what is now Turkmenistan, to the northwest on the Black Sea, in the Arctic, and on Sakhalin Island in Russia's Far East.

Though America's production overtook Russia's in the early years of the twentieth century, the Baku region remained prolific. At the end of World War I, it was producing 15 percent of the world's oil. For Hitler, a generation later, it was still a prize worth fighting for. He was sure that if the German Wehrmacht captured Russia's two black golds—oil from the Caucasus and the rich soil of Ukraine—the Third Reich would be self-sufficient and unstoppable. He gambled to make it happen.

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