Historians mark the end of the Three Stone Ages with the advent of metal working. When modern people began tapping the earth for an unfathomable volume of petroleum, or "rock oil," to be used in nearly every aspect of life - from lighting to heating to transportation to manufacturing to warfare - it became reasonably arguable to say that we entered a "Fourth Stone Age."
Compared to other historical eras, the Age of Petroleum is bound to be brief: either by exhausting the supply; by the toxicity of its waste stream, air pollution and devastating spills; or by innovation and enlightened rationale.
OIL BOOMS AND GOES TO WAR
Of all the extractive industires (logging, mining, drilling, dredging, qaurrying), drilling for oil has historically returned maximum profits for the least amount of labor. Thus a man like George Getty could rush to Oklamhoma to extract oil discovered on Indian territory and amass a huge fortune in just two years.
Long before the first commercial oil well -- "Drake's Folly" in Titusville, Pennsylvania -- would change the course of fate for every culture on the planet, petroleum oil, asphalt and pitch were gathered from naturally occurring "oil seeps" and "tar pits" by people around the world. Natural products from the seeps were used for road surfaces and building mortar, medicine, waterproofing roofs and ships, and in warfare: Asphalt roads existed as early as 625 BC in Babylon; Persian and Greek warriors used oil from the seeps to make flaming arrows and Greek fire; the Chinese drilled wells as deep as 800 feet using bamboo polls; Marco Polo marveled at seeps in Georgia near the Caspian Sea, so large "that a hundred ships may load there at once"; and Native Americans in Pennsylvania taught Washington's troops how to use oil for treating frostbite.
The Seneca tribe, part of the Iroquois Nation, gathered oil and pitch from the seeps of Western Pennsylvania for a variety of medicinal uses and probably for waterproofing vessels, thatch, and containers. In the 1840s, Pennsylvania businessman
Samuel Kier began distilling crude oil, bottling it, and selling it as a patented medicine. Kier's family owned a number of salt wells in the Saltsburg area of Indiana County, not far from Pittsburgh, and Kier also ran a canal operation shipping coal from Pittsburgh to Philadelphia. The salt wells would become fouled with petroleum that leaked in from the seeps, so Kier simply dumped the crude oil into the nearby Main Line Canal. The canal eventually caught fire, which motivated Kier to find some other means of disposal. His "Seneca Oil" sold for $.050 a bottle and was promoted to cure burns, ulcers, cholera, asthma, indigestion, rheumatism, and blindness. Some historians believe this is the origin of the term "snake-oil salesman," via mispronunciation of
Sen-A-ca oil. The medicinal value of petroleum is not addressed here, though the World Health Organization has declared it
carcinogenic.
Be that as it may, the oil seeps of Western Pennsylvania were well known to Native Americans and local farmers and townsfolk. It would take the discovery of a process to distill petroleum oil into kerosene in the mid-19th century to begin "the Pennsylvania Oil Rush." That discovery was made in Europe in 1853. Kier learned the process, built the first American petroleum oil refinery in Pittsburgh, and began producing kerosene for use as lamp oil. He is therefore referred to as "the grandfather of the American petroleum industry," in addition to being America's first oil industry polluter and snake-oil salesman.
Oil goes boom! below the fold...
Although we Americans love to take credit for innovations, especially for "firsts," it was Polish pharmacist
Jan Józef Ignacy Lukasiewicz, "the grandfather of the petroleum industry," who first discovered how to distill kerosene from petroleum seep oil, in 1853. There is some argument as to whether Canadian physician and geologist
Abraham Pineo Gesner, who invented a process to distill kerosene from coal dust, was the first to distill petroleum and deserves the "grandfather" title. But it was Ignacy Lukasiewicz who developed a new kerosene lamp and kerosene streetlamp in the same year of his distillation experiments, 1853, without which the use of kerosene - and the rush to find oil - would not have increased so rapidly.
Ignacy Lukasiewicz also constructed the world's first oil refinery in 1856, triggering a massive conversion of lighting fuel from whale oil to kerosene in cities across Europe and around the world. Some credit Ignacy Lukasiewicz's inventions with "saving the whales," which may well be true -- though the toll on marine life from oil spills, petrochemicals, plastics, and from the world's petroleum-powered mechanized wars is of an unknown, though surely great magnitude. Ignacy Lukasiewicz also constructed the world's first functioning oil well in 1853 (historically contested by wildcat oil prospectors in Pennsylvania and Texas). He did not strike oil, however, before "Drake's Folly" started the world's first "oil boom" in the woods of Pennsylvania.
From the beginning, the burgeoning petroleum industry would attract a consortium of land speculators, wealthy industrialists, get-rich-quick prospectors and "wildcat" bankers. Although the term "wildcat" was used in America for decades before that first oil boom to refer to any risky or impetuous business deal, it quickly came to popularly describe oil prospectors and oil investors. Oil seeps are relatively common in many parts of the world; a spot in which to place a well that yields a commercially significant quantity is not as easy to find. But news of Kier's kerosene refinery near the seeps of Western Pennsylvania would attract the interest of wildcat bankers and would-be tycoons, igniting the world's first oil boom.
Although "Colonel" Edwin Drake is remembered as the man who first struck oil, the Pennsylvania Oil Rush was started by wealthy lawyers, businessmen, and wildcat bankers from New York and Connecticut. After Kier began refining kerosene in Pittsburgh, samples from the Pennsylvania oil seeps began making their way to would-be investors. Based on lab tests of the raw material, lawyers George Bissell and Jonathan Eveleth founded the
Pennsylvania Rock Oil Company, and began to seek backers. No one had ever struck oil before, and many believed it was an impossibility -- hence Drake's project to drill an oil well was dubbed
"Drake's Folly."
Drake himself was not a wealthy man but rather, someone who would bend his back and get his hands dirty for the lawyers and bankers. He wasn't even a real Colonel; one of the investors, bank president James Townsend, thought that the title might lend him prestige to lure more investors into backing the venture. Yes, the world's very first industrial extraction of crude oil began with a banker's lie. Using his life savings of $200, Colonel Drake bought stock in Pennsylvania Rock Oil and the company was reformed as "Seneca Oil" with the Colonel as chief stockholder and president. His backers trickled money his way to cover his supplies and salary, watching his progress from afar and ready to pounce like wildcats. In 1858, Drake moved from New York to Titusville, Pennsylvania, and began scouting for land and seeking an expert driller to assist him: something which didn't exist in the region. Most of the locals considered the notion of drilling for oil to be crazy.
Finally, in May, 1859, blacksmith "Uncle Billy" Smith agreed to work for Senaca Oil for $2.50 a day, making his own tools and convincing Drake to sink iron piping into the well. Drakes derrick was placed near Oil Creek below the level of the creek bed, and the well kept filling with water. The iron piping solved the problem of flooding, but slow progress in drilling at about 3 feet per day convinced Townsend to cut the Colonel off from any further trickle-down investment. With no more out-of-state money coming in, Drake scraped together enough cash from local investors to keep drilling down to 69 feet, where he finally struck oil in August, 1859.
For the Colonel, success was brief. He and Uncle Billy had failed to patent their ground-breaking drilling method. After only two months in operation, Drake's original derrick and well house burned to the ground, along with all oil in storage, when Uncle Billy went to inspect the oil vats with an open-flame lamp in hand. The Colonel rebuilt, but he had not purchased much land in the area, and as oil wells sprang up around him, his well (which happened to be placed in the only spot in the area where a shallow well would strike oil at all) produced only modest amounts. Drake was eventually fired from Seneca Oil, lost all his savings on Wall Street, and lived the rest of his life in poor health and near poverty. George Bissell, on the other hand, one of the New York lawyers who had started Pennsylvania Rock Oil, quickly rushed to Titusville soon after Drake struck oil and bought up or leased as much land as he could near Drake's original well, along Oil Creek and up the Allegheny River near Oil City.
The oil rush brought rapid growth and industrialization to Western Pennsylvania. In 1860, wells in the region produced several hundred thousand barrels but by 1862, production reached around three million barrels. In Titusville alone, the population jumped from 250 to over 10,000 by 1866, with eight oil refineries built there between 1862 and 1868. Pithole, Pennsylvania grew from four farms to a town with 50 hotels over the course of just five months in 1865. Those hotels (along with a thriving red-light district "the likes of Dodge City") were primarily to accommodate thousands of teamsters who flooded the area to load and transport oil barrels. These were not organized laborers, as the "Teamsters Union" would not be founded until 1901. The oil rush and the end of the Civil War would bring hords of men looking for work and a chance to cash in on the oil craze.
Equipment had to be moved in by teamsters, and oil had to be moved out from the fields by wagon on rugged unpaved roads or via canal, creek and river, until the
Oil Creek Railroad Company was established in 1862. The transport of crude oil is a dirty business. Oil from the region was initially floated out on skiffs, with loss of about one-third that spilled while loading and another one-third lost to leakage into Oil Creek and the Allegheny River or into the Main Line Canal. Even with access to the railroad,
teamsters still loaded oil from the field and hauled it by wagon to the rail station or all the way to the refinery, charging sometimes extortionist prices for loading and transport services and famously overworking horses that were constantly drenched in oil, lost all their hair, and often lasted on the job only a few months before dropping dead.
Attempts to pump the oil out through pipes were more often than not busted apart by teamsters unwilling to relinguish their lucrative position in the oil boom. Oil buyer Samuel Van Syckel completed the first successful oil pipeline, a two-inch diameter, six-mile-long line that pumped 80 barrels of oil per hour from Pithole to the Oil Creek Rail in 1865. (A spate of fires the following year would burn whole city blocks and at least 27 oil wells in Pithole, which would become a ghost town little more than a decade later.) 300 to 400 teamsters would leave the region with completion of each new pipeline. But before the end of the Civil War, employment for teamsters boomed as oil prices dipped and soared, swinging as low as ten cents a barrel during cycles of overproduction and glutted supply, yet sustained by the domestic kerosene market and Europe's thirst for cheap American oil.
The Civil War was a double-edged sword for American industry, shutting down trade and production in some areas (like the New England whale oil industry, or the search for crude oil in Texas), while militarizing other booming industries such as railroading, steel, lumber, mining, and banking. The war would bring a boom of employment to the Pinkerton National Detective Agency, a private security firm hired to provide bodyguards for President Abraham Lincoln (pictured here with General John A. McClernand and a Napolean-like and steely-eyed Allan Pinkerton).
"Pinkerton's Men" or "Pinks" protected numerous private business enterprises using heavily-armed paramilitary units which by the early 1890s, had more agents than the US Army had standing members. Congress would attempt to curb the organization's power with the
Anti-Pinkerton Act of 1893, which forbids the federal government and the DC municipal government from hiring anyone "employed by the Pinkerton Detective Agency, or similar organization." But a war that pit North against South and brother against brother established a precedent for Americans to arm themselves against other Americans, enabling the robber barons of the Gilded Age to muster forces that would guard private resources and infrastructure, put down labor strikes, play hardball over land acquisitions and rights-of-way, and generally "impose order" on wildcat industries like that of the burgeoning oil rush.
In 1870, John D. Rockefeller, eldest son of con-man and snake-oil salesman William A. Rockefeller, co-founded Standard Oil Company and proceeded to "impose order" on the oil boom in Pennsylvania. In her 1904 History of The Standard Oil Company, muckraking journalist Ida Tarbell writes, "almost constantly since its organisation in 1870, the Standard Oil Company has been under investigation by the Congress of the United States and by the Legislatures of various states in which it has operated, on the suspicion that it was receiving rebates from the railroads and was practising methods in restraint of free trade." Standard Oil's methods included buying up competitors and equipment supply companies and manufacturers, sweetheart deals with the railroads, undercutting prices, and sending in thugs to break up operations that could not otherwise be controlled. The founding of the Standard Oil Trust by Rockefeller in 1882 effectively created a monopoly over oil in Pennsylvania, Ohio, Texas and elsewhere, while planting the seeds of modern-day Big Oil companies like ExxonMobil and Texaco/Chevron.
At the peak of the
Pennsylvania Oil Boom in 1891, at 31 million barrels, Pennsylvania was producing 1/3 of the world's oil. (Oil from the Caspian Sea, which lies above the world's largest group of oil and gas fields, controlled by the Rothchild financial family of France at that time, supplied about half the world's oil.) Ohio would surpass Pennsylvania's production the following year. Although Pennsylvania's Oil Rush was a first, it was soon followed by expansion into neighboring Allegheny Basin states like Ohio and West Virginia and by oil booms in Texas (Sour Lake, East Texas pictured here), Oklahoma, California, Wyoming, and beyond (See the timeline in
Oil Takes Over the World Part Two: Inventing the Need for an Unlimited Oil Supply for more on these oil rushes and booms). Thomas Edison's patent for the light bulb in 1880 would initiate a rapid decline in the kerosene market, though continued industrial expansion in Europe and the development of gas-powered engines and automobiles would boost the industry and support its rushes and booms. The Pennsylvania oil boom would officially end in 1901 with development of the newly-tapped oil fields in Eastern Texas, though Pennsylvania still produces some oil to this day along with natural gas à la the recent "fracking boom."
By the end of the Gay '90s, Rockefeller's Standard Oil Trust had wrested control over nearly 90% of American oil production, refining, transport, and distribution. The stranglehold Standard Oil held over American oil and its exports would encourage conglomeration and heavy-handed power grabs by competing oil companies here and abroad. It would also serve as a business model for other "captains of industry" during the Gilded Age, its methods applied in all manner of trade from sugar and meatpacking to mining, steel, and railroading. As Congress struggled to rein in monopolies and unfair (often brutal and murderous) business practices, passing the Interstate Commerce Act in 1887 and the Sherman Antitrust Act in 1890, the Fuller Supreme Court would approach the bench with consistently pro-big business, anti-labor stands, as well as general disregard for Native American autonomy and the rights of freed slaves.
The Fuller Court decided cases such as Minneapolis & St. Louis Railroad Co. v Beckwith (1889), granting corporations the rights of persons; Pollack v Farmers’ Loan and Trust Co. (1895), invalidating a 2% income tax imposed on the richest <2%; Plessy v Ferguson (1896), allowing "separate but equal" racial segregation; Lone Wolf v Hitchcock (1903) declaring the United States free to abrogate its treaty obligations; and Lochner v New York (1905), overturning a state's right to limit work day hours. In what became known as the Lochner Era", from 1889 through 1937, the Fuller Court and those of White, Taft, and Hughes used a broad interpretation of due process "to strike down economic regulations adopted by a State based on the Court’s own notions of the most appropriate means for the State to implement its considered policies." In other worlds, laissez faire "economic liberty" and rights of private contract would reign Supreme until the worst economic crash in history brought the Great Depression and a New Deal forced the Court's hand to enable economic recovery.
This is the zeitgeist in which the courts would decide Standard Oil Co. of New Jersey v United States. Politicians like Republican
President Theodore Roosevelt spoke of "an urgent necessity for the sternest war" and "relentless exposure and attack upon every evil man whether politician or business man, every evil practice, whether in politics, in business, or in social life." As always, a good deal of politicians could be bought and sold. But a popular sentiment of distain to the point of contempt for "robber barons" and their rollercoaster, wildcat financial booms and busts would see its day in court when Standard Oil Trust went before the bench. Rockefeller, the
wealthiest man in American history, had already retired from Standard Oil, and Chief Justice Fuller retired the year Standard Oil v United States went to federal court, in 1909. The
White Court found against Standard Oil "on the ground that it is a combination in unreasonable restraint of inter-State commerce," and required that the trust be broken apart into 34 separate and competing business entities. But the Court's insertion of the word "unreasonable" into its interpretation of the law implied that at some future time, other corporate conglomerates' actions to manipulate the free market in their favor and/or crush labor and competition could be deemed
"reasonable." Early petroleum conglomerates simply transformed over time into
"Big Oil" and are still among the largest corporations in the world.
Meanwhile, Europe, especially the Dutch and the expansive British Empire, was keen to develop its own sources of oil. British-Canadian oil men had begun developing tar sands in the mid-1800s and would even lay claim to the first oil well, a year before Drake, in 1858. "Hard Oilers" from Petrolia, Ontario travelled the world seeking to discover and develop oil fields in China, Iran, the Arctic, Australia, Russia and elsewhere. In 1880, Ontario oil refineries would merge to form the Imperial Oil Company, which would later be acquired by Rockefeller's Standard Oil in 1898. Royal Dutch Petroleum, founded in 1890 to develop oil extraction in Sumatra in the Dutch East Indies, would form a single-unit partnership in 1907 with one of its competitors, Shell Transport and Trading Company of Great Britain (originally called "The Tank Syndicate" when it sent its first oil tanker through the Suez Canal, laden with oil from the Rothchild's interests in Azerbaijan). The two companies would form Royal Dutch Shell Group, in a move to better compete with Standard Oil. [Photo below ~ Barrels of oil at the Dutch East Indies port of Tarakan in Dutch Borneo, 1905]
In the same year of the Standard Oil v United States decision, in 1911, Great Britain saw a window of opportunity to develop oil supplies without the threat of a Standard Oil take-over. As transportation and warfare became increasingly mechanized and as part of the
naval arms race between Great Britain and Germany, Winston Churchill, First Lord of the Admiralty, called for conversion of the British Navy from coal to oil, arguing the point before Parliament. The conversion would require securing extensive "dedicated sources" of oil for a fleet charged to patrol and defend an immense British Empire. As part of this conversion, the British Government would become the major stockholder of the Anglo-Persian Oil Company, predecessor to
British Petroleum (BP) which, in describing its own history on its
website, notes that
"war without oil would be unimaginable."
Although the
Battle of Jutland would be the only major Naval battle of WWI, German policy of “unrestricted submarine warfare” throughout the war -- including the sinking of a Cunard cruise ship the
Lusitania, killing 1,198 civilians, turning much of the world against Germany and contributing to a neutral America eventually joining the fray -- would drive the ongoing naval arms race. This map shows the expanse of the post-war British Empire in 1921.
Under the terms of the concluding Treaty of Versailles signed in 1919, Britain gained control of Palestine, Transjordan, Iraq, parts of Cameroon and Togo, and Tanganyika. By 1922 the
British Empire covered more than 13 million square miles, almost a quarter of the Earth's total land area, and ruled over about 458 million people, or one-fifth of the world's population at the time.
Among other concessions, the Treaty of Versailles also stipulated that Germany was forbidden to have tanks, airplanes, submarines, large warships, long-range cannons, or poison gas. These concessions would not be long honored by Germany, which would continue its military-industrial development in as much secrecy as possible and two decades later, would invade Poland to plunge all of Europe into a second World War. War would be unimaginable without Big Oil and its allied industries (steel, rubber, railroads, shipping, and finance) - or, is it the other way around?
[Photos ~ above - No Man's Land at Flanders Field, France, 1919; below - A Texas oil field, 1919]
"...war without oil would be unimaginable." ~ BP company website
When I set out to write about oil, I started with a single question: How did we get here? What motivated me to ask this question is my own opposition to the Keystone Pipeline and to oil development in general. In spite of what has been one environmental catastrophe after another in transporting oil -- via pipeline, truck, train, or oil tanker; in spite of a great deal of popular, public opposition to more pipelines and to the use of oil in general; in spite of the fact many viable, renewable energy alternatives exist; as 2015 begins and progresses, a movement to force the Keystone Pipeline into existence keeps plodding on. It seems driven by a single-minded purpose to remain on a course of "perpetual growth" in the oil industry, keeping us mired in the "Fourth Stone Age."
I'm learning a great deal in the process of research and writing. That is my hope for the reader as well.
See
Oil Takes Over the World - Part Two: Inventing the Need for an Unlimited Oil Supply