A Brief History of the End of Time
— 5. The Early Days of the Oil Industry —
From the well to the world
Oil industry as we know it swept out of Titusville, Pennsylvania like a new Big Bang and solidified through a series of rapid reformations directing the influx of investors' money radially outward from the well to the world.
Initially the focus lay on the production of the oil. People bought rigs by the bushel, or switched from salt mining to petroleum mining. Produce was poured into any kind of container or barrel that folks could get their hands on. Soon the shortage of proper storage facilities led to the booming of barrel making and standardizing of the oil-barrel as unit of volume.
The next step came with the problem of transportation. Because oil wells were often located at considerable distance from civilization, the barrels of oil needed to be hauled to the cities and ports by either wagon, train or flat bottom boat if there happened to be a river nearby. Two forces grabbed the neck of the virgin industry. Because of the relative simplicity of getting oil out of the ground and the readiness of the region to get going, the oil-rush caused an almost lethal inflation of the selling prices. In the year of Drake one barrel of oil was sold for twenty dollars. Just two years later in 1861 people were selling for fifty-two cents the barrel. Companies crashed, entrepreneurs were ruined, production ceased, demand increased, prices rose and in 1863 oil was back to eight-fifteen the barrel. The stormy nature of the exploding market and the vicious fluctuations in supply and commensuration made it near impossible to plan sound strategies, inducing sudden bankruptcies of previously sound production companies, rig and barrel manufacturers and the new awoken field of oil tools.
Over the barrel
The other force that was making things difficult was a much more mundane one. The teamsters that transported the barrels from the wells to trains or rivers comprised a vital link in the chain, and they knew it and offered to haul the oil for prices that bordered larcenous extortion. There were times that a ten-cent barrel was transported over ten miles for no less than four dollars and while everybody went poor, the teamsters feasted. This went on until party-pooper extraordinaire Van Syckel built the world's first pipeline and the teamsters became obsolete and vanished after some shouting and rallies of prepuberal vandalism and assault.
With the invention of the pipeline things began to pick up at a feverish pace. The production companies had learned their lesson from the teamster's tyranny and began to build entire infrastructures around their wells. In 1863 slavery was abolished and in 1865 the civil war ended and thousands of men were roaming the land in search for work. And they found it in Pennsylvania. They and thousands of newly arriving immigrants.
When production, transportation and personnel were secured the oil business started to focus on her next state of fair: distillation. The distillation of crude oil into valuable products is, as Bissell's Yale professor said, not much of a deal. In fact anybody who can make moonshine from potato peels can make kerosene out of petroleum. The challenge that needed to be negotiated was in the field of applications. Scientists were hired whose sole mission was to figure out what petroleum could be made into, and what could be done with the product. And with the advent of an iridescent pallet of products that nobody had ever heard of, came marketing and worldwide promotion. But the world was more receptive than anybody had hoped for. In the late 1860's and early 70's the Titusville Bang expanded to cover the entire world and much to the dismay of the Pennsylvanians, other states and countries began to drill for oil themselves and within a few years Pennsylvania's head-start had vanished.
What to do with it?
Initially kerosene was the prime treasure to be distracted from crude oil, but that changed when in 1876 Herr Otto invented the gasoline engine, in 1897 Herr Diesel invented the diesel engine, in 1903 sirs Orville and Wilbur Wright built and flew the first motor plane, and in that same year mister Henry Ford revolutionized the infant automobile industry. When a decade later the First World War broke out, myriads of airplanes where up and running and played a crucial role in the outcome of the conflict. Warships that had previously been powered by coal-fired steam propulsion were equipped with diesel installations. Coal and steam gave the ships a smoke tail that was visible when the ships themselves where still below the horizon. Diesel installation could be tuned so precisely that the output of attention drawing smoke was brought to a minimum. The nations of the world embraced petroleum for warfare, and the black gold attracted fierce political interest.
During the fifty-five years before the First World War mankind had undergone a change that was no less vehement than the change mankind is presently marveling at. In fact, we may detect a single line of rapid progression that commenced at Titusville, was suspended somewhat while covering World War One and the global recession, found additional nutrition in the tributary of the quantum mechanical revolution, squeezed out another World War, and then proceeded to spawn the computer age.
Within a century and a half, mankind had approached a gravimetric center of interest. While still fighting for a spot nearest the glow, humanity sat down arm in arm around the campfire of oil, and later that of computers and later still that of the Web. And like every large empire in history could commence after some genius united the tribes, so earth had her guide. When the oil revolution was in its upswing the economy consisted of a mist of entrepreneurs and small companies. Wells, transport facilities, barrel and tank production and refineries where owned and operated by independent contractors with independent methods, itineraries and standards. But in the 1890's more than seventy-five percent of America's heavy industry was in the hands of one man who had understood the philosophies of Karl Marx in a rather unexpected way and became the arch-father of the multinational business-structures that remains to characterize contemporary capitalism.
John Davison Rockefeller →