The Age of Oil As the Thirst for Oil Continues to Grow, Production Efforts Around the World Have Jumped Into Overdrive

THE AGE OF OIL AS THE THIRST FOR OIL CONTINUES TO GROW, PRODUCTION EFFORTS AROUND THE WORLD HAVE JUMPED INTO OVERDRIVE BY ROBERT RAPIER MOST PEOPLE would have a jumped into overdrive. In 2012, global had an idea that so-called rock oil difficult time imagining life without oil. oil production reached an all-time high (petroleum) that seeped naturally from Oil petroleum is used to produce of 86.2 million barrels per day, accord- the ground in many places could be the pesticides and herbicides that ing to the 2013 BP Statistical Review of produced commercially and refined farmers use to grow crops, which are World Energy. The United States posted into a fuel for oil lamps. After commis- then transported to market in vehicles the largest production increases in the sioning an analysis of a local sample of that contain numerous plastic and world, accounting for 53 percent of the petroleum that showed that the synthetic rubber parts, made from total global increase. kerosene fraction indeed made an oil. These vehicles are powered by oil, For the past 150 years, we have lived excellent fuel for oil lamps, Bissell and probably driven on roads made in the Age of Oil. We have to look back formed the Pennsylvania Rock Oil of oil-derived asphalt. Oil is also used to the 1850s to see a society that did not Company, which later became the to produce detergents, medicines, yet benefit from this slick substance. Seneca Oil Company. paints and nylon clothing. But how did we get to this point? Seneca hired Edwin Drake to Air transport is practically Humans have been using petroleum search for oil around Titusville. Drake 100 percent dependent upon oil, while as an energy source and for medicinal noticed that salt well drillers often had the entire U.S. transportation sector purposes for thousands of years. unwanted oil associated with the salt depends on oil for around 95 percent of Petroleum had long been collected in water they were attempting to extract, its energy. We grew up in an age of some locations from oil pits similar to and he decided to use the same drilling abundant petroleum, and this is the La Brea Tar Pits in California, but technique in an effort to produce oil. In reflected in the cars we drive, the layout the Chinese are reported to have drilled August 1859, he succeeded. An oil rush of our cities and our commutes to work. for oil as early as 347 AD Until the 19th began in Pennsylvania. Around the world, the thirst for century, however, oil usage around the Pennsylvania quickly became the oil continues to grow in many countries, world was minor and sporadic. most important oil-producing region in particularly those in developing That changed in the mid-19th the world. As oil production rose, one regions. Between 2011 and 2012, oil century when several commercial oil casualty was the whaling industry. Prior consumption in Africa, China, India wells were drilled in Europe and North to the commercialization of petroleum, and the former Soviet Union jumped by America. While there are competing whale oil was commonly used as fuel for some 5 percent. The Middle East claims about who drilled the world’s first oil lamps and as a lubricant for moving also saw a jump (4.5 percent), as commercial oil well, a well drilled in parts. By 1859, many whale species had did the Asia Pacific region, where Titusville, Pennsylvania, in 1859 is been driven nearly to extinction. consumption grew by just more than widely credited with kicking off the But kerosene proved to be a superior 3.7 percent—an increase of approxi- American petroleum industry. option for consumers, and demand mately 1 million barrels per day (bpd). The story starts with George Bissell, for whale oil soon plummeted. Thus the To feed this insatiable thirst, whom many consider to be the father rise of the oil industry was a major oil production around the world has of the American oil industry. Bissell factor leading to the decline of the 8 BOSS 4 s pr i ng 2014 Drilling bit and positive displacement motor in front of a drilling rig. www.dixonva lve.co m s pr i ng 2014 4 BOSS 9 This 1861 photograph shows Edwin Drake (foreground, top hat) at the original 1859 Drake oil well in Titusvile, Pennsylvania, the first commercial oil well drilled in the United States. volatile and generally undesirable by-product of kerosene distillation. But gasoline turned out to be a very good fuel for the internal combustion engine, and the rapid growth in the early 20th century of affordable automobiles created a greater demand for oil production. In the United States, demand for Henry Ford’s Model T grew rapidly, and expanding oil production provided the fuel for these cars, enabling a level of personal mobility that had never been experienced in human history. Diesel, a heavier petroleum fraction than gasoline, soon became the preferred fuel for an engine patented by Rudolf Diesel in 1892. The diesel engine would become a favored mode of transport for heavy trucking and commercial ships. And the kerosene that initially kick-started the oil industry would ultimately prove to be an ideal fuel for commercial jets. This whaling industry, and to the recovery of Standard Oil’s business practices worked out well for the oil industry many whale species. attracted a great deal of criticism, since the invention of the electric light The oil industry rapidly grew especially after a journalist named Ida greatly diminished the demand for in the Appalachian Basin, with new Tarbell published a series of critical kerosene lighting. discoveries in western New York, Ohio, articles that broadly turned public Thus, the rise of the oil industry Kentucky and West Virginia. The oil opinion against the company. The both enabled, and was enabled by, that was produced was transported to federal government investigated and the rise of the most mobile civilization refineries that distilled the kerosene, concluded that Standard Oil built its in the history of the world. while disposing of undesirable fractions dominance by engaging in unfair like gasoline—often in nearby rivers. business practices. A young man named John D. In 1909, the U.S. Department Rockefeller sensed a great opportunity, of Justice sued Standard under the and began acquiring refineries and Sherman Antitrust Act, and in 1911 the BEYOND making deals with the railroads. Supreme Court ruled that Standard Oil In 1870, Rockefeller formed the had to be split. The resulting companies Americans consume petroleum products Standard Oil Company, which quickly went on to become Exxon and Mobil at a rate of 3.5 gallons of oil per day. established itself as one of the world’s (now back together as ExxonMobil), But, as shown here, petroleum is not just first multinationals, and the first major Chevron, Marathon and Amoco (which used for fuel. Among the many uses for U.S. business trust. The company ultimately merged with BP). bought out competitors, or undercut While the initial growth spurt of refined crude oil: them and put them out of business. the oil industry was driven by kerosene By the turn of the century, Standard Oil demand, the late 19th century brought would control about 90 percent of the the invention of the automobile. Prior U.S. oil industry. to that time, gasoline was a highly 10 BOSS 4 s pr i ng 2014 Fueling Success of the Allies By 1900, U.S. production had risen From left: A 1949 photo of a Standard Oil Company station in San Francisco, from the book to 175,000 barrels per day, with produc- The Gas Station in America, from the Johns Hopkins University Press. Three Sands Oil Field, tion still centered in Pennsylvania and Tonkawa, Oklahoma, in 1921. neighboring states. Ultimately, however, oil fields—and oil-producing regions right out of the well, which then gushed and by World War II, oil had become an in general—will reach a production uncontrollably for nine days. This iconic indispensable strategic commodity for peak and then begin to decline. As image of the gusher at Spindletop both sides. Oil played a role in Japan’s Appalachian Basin oil production began would define the beginning of the oil decision to attack Pearl Harbor (an to decline, the oil industry moved first age in Texas. American oil embargo had caused a to Indiana and Illinois. But then major Spindletop was to that point crisis in Japan, which relied on the U.S. oil discoveries in Oklahoma, Texas and the largest gusher the world had ever for 80 percent of its oil), as well as California shifted the heart of the oil seen, but other large finds followed in Hitler’s decision to invade Russia. industry to the West, a situation that Texas. In 1930, the East Texas Oil Field The victory for the Allies was fueled by continues today. was discovered, and would remain the American petroleum. The most famous of the new round largest oil field in the United States The U.S. supplied 6 billion of the of oil discoveries took place in Texas until the discovery of Prudhoe Bay in 7 billion gallons of oil consumed by in 1901. Outside Beaumont, Texas, Alaska in 1968. By the mid-1930s, the Allies during World War II. This near the Gulf Coast, mining engineer Texas oil production had reached was enabled by construction of a pair of Anthony Lucas had been drilling 1 million bpd, around half of total pipelines that allowed shipment of unsuccessfully on a hill known as global oil production.

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