In September 2014 the $860-million Rockefeller Foundation made an historic announcement. Timed to coincide with massive marches for climate action all over the world, the fund revealed it was going to divest from fossil fuels. Following in the footsteps of the World Council of Churches, the British Medical Association and Stanford University, the latest major institution to make such an announcement is also the most symbolic. Because the Rockefeller fortune owes its very existence to oil.

The Rockefeller story is also the story of the rise and fall of the first ‘oil major’. Standard Oil, founded by John D Rockefeller in 1870, soon came to control the burgeoning US oil industry, from extraction to refining to transportation to retail.

It built an unprecedented monopoly that became so publicly despised that the US government broke it up – birthing Exxon, Mobil and Chevron, among others.

The forced break-up created the Rockefeller millions. A century later, those millions are being used to make a dramatic point: we are witnessing the beginning of the end of the oil age.The age of oil has been one of staggering inequality. The discovery of hydrocarbons has brought fortune to the few and misery to the masses. Many oil-rich countries suffer distorted economic development, financial instability, repressive authoritarian rule, stifled human rights, soaring poverty and pervasive corruption.

In the oil-addicted West, its toxic political influence echoes through domestic and foreign policy. Today’s oil majors deploy their power deftly, and devastatingly, their probing tentacles lubricated by de facto impunity and state collusion. The CEO of Exxon clicks his fingers: national armies are mobilized. Shell’s chair has a quiet word: democratically agreed policies are shelved.

Collision course

Yet change is coming. The dominance of the oil majors is being assailed from all sides. Oil’s future is looking increasingly – exhilaratingly – shaky.

Oil companies’ current extraction plans for the next two decades set us on course for a six-degree global temperature rise and an unliveable planet. To have a chance of keeping the rise to a disruptive but not catastrophic two degrees, we need to leave 80 per cent of known fossil-fuel reserves in the ground.[1]

Furthermore, financial markets and economies have got used to treating oil as infinite. But all the easy-to-extract crude has already been found, and largely consumed.

Now, most available oil is either in politically dysfunctional regions such as the Middle East and Nigeria, or in locations and forms that are much more expensive and risky to extract – tar sands, oil shale, ultra-deepwater, the Arctic.

The oil majors are pinning their future drilling hopes on these ‘unconventional’ or ‘marginal’ sources of oil. But the technical risks of new oil projects have risen ‘to never before seen levels’, investors are warned by financial overlords Goldman Sachs.[2] So capital expenditure – the amount companies have to invest to get new sources of oil flowing – has gone through the roof, while their all-important ‘Reserve-Replacement Ratio’ (by which markets judge their value) has plateaued. In a nutshell, oil is becoming less profitable.

The strain is starting to show. Companies are shelving major tar sands projects, denting their portfolios considerably. This year has seen Statoil’s multi-billion dollar ‘Corner’ development put on ice, Total and Suncor’s $11-billion Joslyn project suspended, and Shell’s massive Pierre River mine plans mothballed.[3]