When OPEC took over the international oil market in 1973, the possibility remained of discussing Western oil companies in the terminology that had been used for half a century. There were the "majors," the Seven Sisters, and then there were the "independents," that is, the comparatively small producers that included enterprises from family operations like Krumme Oil in Oklahoma to large, multinational oil companies like Getty Oil and Atlantic Richfield Company (ARCO). During the high-price energy era of the 1970's and early years of the following decade, all these companies reaped large profits, and the majors and many of the larger independents reinvested those profits in the pursuit of alternative energy schemes (Exxon, for example, invested five billion dollars in its oil-from-shale project in Colony, Colorado) and the acquisition of holdings in such other energy sectors as coal and uranium. These companies would do much the same vis-a-vis biofuels in the high-cost petroleum era that followed the U.S. invasion of Iraq in 2003.

The downturn in the price of oil in the 1980's caused the majors to shut down most of their alternative energy projects and to seek means for surviving in the lean years of the global recession. As these companies would do in even more publicized ventures during the 1990's, when the price of oil remained in the twenty-five-dollar-per-barrel range, many turned to mergers in order to economize, beginning with the 1984 merger between SoCal and Gulf Oil that enabled Gulf to sell off many of its subsidiaries and service stations and led SoCal to change its name to Chevron. A decade later, what had been exceptional in 1984 became, momentarily, almost commonplace. The process began in December, 1998, when British Petroleum (BP) acquired Amoca (formerly the American Oil Company or Standard Oil of Indiana) for more than fifty billion dollars. The following year the combined corporation purchased ARCO (one of the major players in the discovery of Alaskan oil). Combined with its subsequent acquisition of Burmah Castrol, a lubricant manufacturing company, BP was able to pare approximately twenty thousand jobs worldwide and become temporarily the world's largest oil company.

BP held that distinction for only a few months until Exxon and Mobil merged in November, 1999, into the largest corporation in the world. The transaction enabled the combined corporation to sell off more than seventeen hundred service stations (to Tosco) and trim its payroll by nearly ten thousand employees. The merger mania did not end there, or on the U.S. side of the Atlantic Ocean. In 1999, two giant European petroleum firms, France's Total and Belgium's Petrofina, merged into Total- Fina and then acquired France's other major petroleum company, Elf, to make TotalFina the fourth largest petroleum company in the world. Then, in 2001, another Sister-Sister marriage occurred, this time involving Chevron and Texaco (Falola, 2005).

In short, by the time oil prices began to rise appreciably shortly after the terrorist attacks on New York and Washington, D.C., on September 11, 2001, and especially following the U.S. invasion of Iraq in 2003, a new set of six "supermajors" had emerged in the world of private oil companies: Exxon-Mobil, BP-Amoco, Chevron-Texaco, TotalFina, Royal Dutch Shell, and Conoco-Phillips (whose two units completed their merger in August, 2002). All are vertically integrated and, compared to the "independents," have a commanding share of the market.

Unlike that of the Seven Sisters, though, their power is rooted in sales, not in the production of oil: They accounted for only about 10 percent of the oil produced in the early years of the twenty-first century and their combined ownership of oil and gas accounts for less than 5 percent of the world's know oil and gas reserves.

Comparatively speaking, the real "supermajors" are not these private oil companies but the seven largest state-owned petroleum companies in the contemporary world, led by those of Saudi Arabia, Iran, Russia, and Venezuela, but also including the state-owned companies of China, Brazil, and Malaysia.

Collectively, these seven account for nearly one third of the world's gas and oil production and the majority of its know oil reserves. More important, when combined with the production capacity and reserve holdings of other state-owned oil companies, these actors account for the overwhelming majority of the world's oil and gas production and reserves. In that sense they are more analogous to the Seven Sisters than today's "supermajor" private oil corporations. However, unlike the Seven Sisters, they do not collaborate with one another. Quite to the contrary, they sometimes compete with one another for influence inside OPEC (where only Saudi Arabia, Iran, and Venezuela are represented) and for profits in the world's petroleum marketplace.

Because petroleum is a nonrenewable natural resource, the industry will someday face the inevitable depletion of the world's oil supply. In 2007, the BP Statistical Review of World Energy predicted that the reserves in the Middle East would last 79.5 more years; those in Latin America, 41.2 years; and those in North America, 12 years. At 2008 production levels, the world's oil reserves would be depleted in 40.5 years (Heinberg, 2003).

A theory developed by geologists Marion King Hubbert in the 1940's, known as the Hubbert's peak theory (also known as "peak oil") or the "Hubbert curve," identified patterns of resource use that let Hubbert to predict that U.S. oil production would peak in the early 1970's. The extension of this analysis to world energy production to the prediction that a worldwide energy crisis would occur after production of oil and gas peaked. Research conducted by IBISWorld suggested that biofuels such as ethanol and biodiesel would continue to supplement petroleum but that, because output levels were low, these fuels would not replace local oil production and would play only a minor role in reducing dependence on imported crude oil.

Perhaps the most damaging effect of petrochemicals is global warming. The use of fossil fuels releases carbon dioxide (CO2) and methane, two greenhouse gases (GHGs) that trap the Earth's heat within the atmosphere and lead to warmer oceans, warmer climates, unstable weather, rising sea levels, and concomitant phenomena such as floods, drought, shifts in water flow, forest fires, famines, and extinctions. Such changes have already been noted but do not take place simultaneously or immediately; still they can occur over as short a time as decades, and their ecological and climate impacts are extremely complex and difficult to predict.

There is some consensus, however, that such changes, and their climate impacts, will increase in occurrence and severity, requiring ongoing mitigation and response (Deffeyes, 2003). The projected effects of climate change are sufficient reason by themselves to seek to reduce fossil fuel dependency and replace energy needs with more sustainable resources. Peak oil will challenge humankind's ability to deal with and adapt to global warming: a decline in global oil supply, paired with an increase in the cost of goods and services, reduces the ability to make the investments in infrastructure that are required in order to respond to global warming in a proactive and coordinated fashion. Therefore, it is imperative that policy makers consider proposed responses to peak oil and global warming in tandem.

References

1. Deffeyes, Kenneth S. Hubbert's Peak: The Impending World Oil Shortage. Rev. ed. Princeton, N.J.: Princeton University Press, 2003.

2. Falola, Toyin, and Ann Genova. The Politics of the Global Oil Industry: An Introduction. Westport, Conn.: Praeger, 2005.

3. Heinberg, Richard. The Party's Over: Oil, War, and the Fate of Industrial Societies. 2d ed. Gabriola Island, B.C.: New Society, 2003.

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