Fears of war caused Winston Churchill to make a huge decision.

When Winston Churchill went to Whitehall in 1911, coal was still the primary source of power for naval vessels. The Royal Navy had adopted oil for submarines and destroyers, and in most ships it was sprayed on coal to increase its combustion. But coal remained the principal fuel, especially for larger vessels like battleships. It was widely available, especially in Britain, where Cardiff coal mined in Wales was preferred by navies worldwide. Coal was accepted by marine engineers, and Britain had a global network of coaling stations. In addition, coal was inert and thus supplemented armor by reducing damage from shells exploding in coal storage bins.
But coal also had disadvantages. Moving it from shore to ship, and aboard ship, was dirty and strenuous work that required extensive manpower. As Churchill noted, "The ordeal of coaling ship exhausted the whole ship's company. In wartime it robbed them of their brief period of rest; it subjected everyone to extreme discomfort." It was virtually impossible to refuel at sea, meaning that a quarter of the fleet might be forced to put into harbor coaling at any one time. Providing the fleet with coal was the greatest logistical headache of the age.
Oil offered many benefits. It had double the thermal content of coal so that boilers could be smaller and ships could travel twice as far. Greater speed was possible, and oil burned with less smoke so the fleet would not reveal its presence as quickly. Oil could be stored in tanks anywhere, allowing more efficient design of ships, and it could be transferred through pipes without reliance on stokers, reducing manning. Refueling at sea was feasible, which provided greater flexibility.
Finding and securing sources of oil threatened to be the most difficult part of the venture, he continued. "The oil supplies of the world were in the hands of vast oil trusts under foreign control. To commit the navy irrevocably to oil was indeed to take arms against a sea of troubles. If we overcame the difficulties and surmounted the risks, we should be able to raise the whole power and efficiency of the navy to a definitely higher level; better ships, better crews, higher economies, more intense forms of war power - in a word, mastery itself was the prize of the venture."
Opposing the transition was the weight of naval tradition, magnified by loss of the strategic advantage of large coal supplies in Britain. This position was voiced in 1904 by Lord Selborne, the First Lord of the Admiralty, "The substitution of oil for coal is impossible because oil does not exist in this world in sufficient quantities. It must be reckoned only as a most valuable adjunct."
Supporting change was Admiral John Fisher, the First Sea Lord from 1904 to 1910 and friend and advisor to Churchill during his tenure as First Lord of the Admiralty. Fisher, who dominated the Royal Navy in his day, was renowned for many innovations in administration and engineering, including Dreadnought class battleships.
Fisher described such advantages as the ability to replenish at sea and the smaller amount needed to produce the same amount of energy as coal. He reported that a new Russian battleship burned oil alone and that "at one stroke, oil fuel settles half our manning difficulties! We should require 50% less stokers." Personnel savings were also critical to the Royal Navy, which regarded the shortage of trained sailors as its worst long-term problem.
Although Fisher was unable to push the senior service over the precipice during his tenure as First Sea Lord, he found Churchill an important ally since their first meeting in 1907. One requirement, Fisher told Churchill, was that the Queen Elizabeth-class battleships be built as a fast division, able to outmaneuver and cross the T of the German fleet. In 1912, Fisher wrote to Churchill, "What you do want is the superswift - all oil - and don't fiddle about armour; it really is so very silly! There is only one defence and that is speed!"
The war college was asked how much speed a fast division would need to outmaneuver the German fleet. The answer was 25 knots, or at least 4 knots faster than possible at the time. Churchill concluded, "We could not get the power required to drive these ships at 25 knots except by the use of oil fuel." This was enough for him.

Finding the source
Queen Elizabeth-class battleships were built to burn oil only. Once this decision was made, Churchill wrote, it followed that the rest of the Royal Navy would turn to oil.
But building oil-fired ships was only part of the exercise; it was also necessary to secure a supply and solve storage and transport problems. To meet these challenges Churchill established a royal commission. With Fisher as chairman, the commission eventually published three classified reports confirming the benefits of oil. It judged that ample supplies of oil existed but urged that a storage capacity be built in peacetime to ensure sufficiency in time of war.
The final step was finding a source, and toward that end a delegation went to the Persian Gulf to examine oil fields. Two companies were the likely choice of supply: the powerful Royal Dutch Shell Group and smaller Anglo-Persian Oil Company. After considerable maneuvering, and largely through Churchill's encouragement, the government decided to maintain competition in the oil industry and ensure supplies by investing directly in Anglo-Persian. The government acquired 51% of company stock, placed two directors on its board and negotiated a secret contract to provide the Admiralty with a 20-year supply of oil under attractive terms.

Race to the future
Beyond the efforts of the main actors and pressures of industry and commerce, it appears that several broader historical factors in the years leading up to World War I made the time right for Britain to adopt oil. One factor was the growing Anglo-German naval race. But just as critically, by this time several decades of widespread experimentation and development of fuel oil had shown that the technology was feasible. It appeared Britain ran the risk of being left behind.
The Italian navy led the way in experimenting with oil starting in 1890, and by 1900 most of its torpedo boats were oil-burning. The mixed-firing method of spraying oil on coal was routine by the early 1900s, and a liquid fuel board in the United States recommended using oil as a standalone fuel in 1904. The first oil-burning American destroyer, USS Paulding, was commissioned in 1910, and by 1911 the USS Nevada-class battleship was planned for solely oil as fuel.
By 1912 oil technology was relatively well understood. But there was no particular race to develop oil-fueled warships, and in 1914, despite the advantage of oil, only America joined Britain in moving far in that direction. The United States had ample supplies. But Fisher received regular reports that the Germans were developing oil.
This turned out not to be true - Germany did not use all-oil firing for surface vessels until after the war. Still, it was a combination of the general level of oil development and the threat of German advances that pushed Britain to change despite the loss of the coal advantage. The transition itself quickly became recognized as the right decision, and the new fuel became universally used in naval design in a few years.

Fortunes of conflict
The switch to oil neither sparked a naval revolution nor delayed Britain's naval decline. In part its historical significance may have been overshadowed by development of the dreadnought. It may also be that World War I gave little opportunity for innovation, and by World War II every navy had adopted oil, neutralizing gains.
The transition from coal to oil was symptomatic of the broader limitations of leadership of the navy by Fisher and Churchill: it was a significant innovation but not a strategy. It improved the warfighting capability of the Royal Navy but didn't change the way wars were fought.

Editor's note: This is an excerpt of a longer article that originally appeared in the Winter 2000-2001 issue of JFQ, the Joint Forces Quarterly. It has been reprinted with permission.