1933 - Energy

Energy

Saudi Arabia's Abdul-Aziz ibn-Saud gives Standard Oil of California a 60-year exclusive concession to explore for oil on a 320,000-square-mile tract of desert (see 1932). English Arabist-adventurer H. St. John Philby has reminded the king of a phrase in the Koran: "God changeth not what is within people unless they change what is in themselves." Ibn-Saud replies, "Philby! If anyone would give me a million pounds I would give him all the concessions he wants." He receives a loan of $170,327 from SoCal, which has recently begun pumping oil on the Persian Gulf island of Bahrain and will find in 1938 that its concession overlies the world's richest petroleum reserve. To help exploit the Saudi Arabian reserve, SoCal makes a 50-50 arrangement with the Texas Co., forming Arabian American Oil Co. (Aramco) to produce the petroleum and CalTex to market it through Texaco outlets in Europe, Africa, and Asia (Aramco pays Philby $1,000 per month and will later take in other partners, including the Saudi Arabian government [see 1950], which will acquire full ownership in 1976) (see 1938).

Gasoline sells for 18ยข per gallon in America.

The Tennessee Valley Authority Act passed by Congress May 18 creates the TVA with a mandate to maintain and operate the power plant at Muscle Shoals, Ala. (see Wilson Dam, 1927) and to develop the economy of the 41,000-square-mile region that includes parts of Tennessee, Kentucky, Virginia, North Carolina, Georgia, Alabama, and Mississippi. Sen. George W. Norris (R. Neb.) sponsored bills beginning a decade ago that would have created such an independent government corporate agency, former presidents Calvin Coolidge and Herbert Hoover vetoed the legislation in 1928 and 1931, respectively, but President Roosevelt has redrafted it and signs it enthusiastically, launching the federal government on a program that goes well beyond earlier proposals. The authority's mandate is to build 11 dams at strategic points on the Tennessee River and its tributaries for generation of power that will supply electricity to residents of the valley, only 3 percent of whose farmers have ever had it, and to control the rivers and improve "the economic and social well-being of the people living in said river basin," one of the nation's poorest regions (see Supreme Court decision, 1936).

Commonwealth & Southern Co. lawyer Wendell L. Willkie succeeds founder Bernard C. Cobb as president of the giant utilities holding company, which has had a monopoly on power in the Tennessee Valley but done little to help farmers (see 1929). Now 44, Willkie begins attacking the TVA and other New Deal policies on grounds that they represent unwarranted federal intrusion into private enterprise. Within 2 years he will be the utility industry's leading critic of the TVA, and he will guide the company effectively through the Depression.

Pennsylvania-born Secretary of the Interior Harold L. (LeClair) Ickes, 59, becomes administrator of the petroleum industry under the new National Industry Recovery Administration. Nominally a Republican, he has broken with his party and renames Hoover Dam, calling it Boulder Dam (see 1932). Six Companies president Warren A. Bechtel dies of an accidental prescription-drug overdose at Moscow's National Hotel August 29 at age 61. He is succeeded as head of Bechtel Co. by his son Stephen (Davison) Bechtel, 32, who served with the Army Corps of Engineers in France during the Great War and 4 years ago persuaded his father to go into the pipeline business. The younger Bechtel becomes chief engineer for the entire project, whose construction proceeds apace as 4,000 workers labor under the direction of Frank Crowe, who devises an ingenious aerial tramway to deliver men and wet cement wherever they are needed (see 1935).

Survey work begins September 3 on the Grand Coulee Dam, to be built in eastern Washington State for hydroelectric power, to control the rampaging Columbia River, and to provide irrigation. Private power companies have opposed the project, as did the Hoover administration, but President Roosevelt has favored it, and the Bureau of Reclamation has produced films designed to win public approval. Ten communities are evacuated, the remains of 700 Native Americans are relocated, and the river is diverted to expose bedrock, which is relatively close to the surface in the arid region (see 1941).

The Dnieper River Dam is completed in the Soviet Ukraine. Minnesota-born engineer Hugh Lincoln Cooper, now 68, built the Muscle Shoals Dam in Alabama and has directed construction of the 810,000-horsepower hydroelectric installation, which will save 3 million tons of coal per year.