When President George W. Bush announced last May that "we're running out of energy in America," students of history could have been forgiven for thinking ruefully of George Otis Smith. Once a formidable figure in Washington, DC, Smith led the U.S. Geological Survey from 1907 to 1930. Just after the First World War, Survey geologists assessed the state of the world's petroleum reserves-and concluded that they would be totally exhausted before 1940. Alarmed by the prospect of what he called a "gas famine," Smith charged that the position of the United States "can best be characterized as precarious."

To stave off an energy crisis, Western nations tried to secure access to the world's remaining oil, especially the then unexploited deposits in what are now Iran and Iraq. A frantic round of imperialistic dickering ensued, with the United States and France convinced that the British were stabbing them in the back. Disputes over oil spread "a film of mistrust," historian Herbert Feis lamented, over both the establishment of the League of Nations and the Allied powers' attempt to bring the fledgling Soviet Union "back into the circle of friendly nations." Only in the late 1920s did the United States, France, Britain and the Netherlands settle the issue-as far as they were concerned, anyway-by slicing up parts of the Middle East into national oil concessions, thus ensuring their supply of petroleum.