Discovering New Uses for Petroleum
By 1929, oil production in the United States had tripled from 1918
levels. It was during that year that American companies produced
one billion barrels of oil for the first time in the short history of the
petroleum industry.
By the spring of 2007, the United States was producing 5.2 million
barrels per day of crude oil—one million barrels fewer than
the decade before. Instead, we now import about 60 percent of our
crude oil.
This oil is moved through more than two hundred thousand
miles of pipelines that crisscross the continental United States, providing
America with a stable and reliable source of fuel. This massive
infrastructure, as critical to our way of life as highways, electric
power lines, and cellular telephone towers, has been built underground
not only for aesthetic considerations but also for environmental,
cost, and security reasons, according to the American
Petroleum Institute.
Another 180,000 miles of pipelines carry natural gas quietly,
reliably, and efficiently throughout North America for heating,
cooking, and other uses, according to the Interstate Natural Gas
Association of America (www.ingaa.org).
Drake and Lucas had paved the way for the wholesale extraction
of petroleum from the ground. Now inventors began to develop
products that opened up a whole new market for crude oil and its
products.
One of the first uses was in the internal combustion engine built
in 1885–1886 by Karl Benz. The concept was improved on by Gottlieb
Daimler, who developed an engine that used a lighter gasoline
vapor. By 1894 Rudolf Diesel had designed the engine that bears
his name today, an internal combustion engine ignited by the heat
of compression rather than by a spark.
However, probably the most significant invention that changed
the way Americans lived came in 1893 with the development of the
first American car by Charles and Frank Duryea in Springfield,
Massachusetts. In 1908 Henry Ford introduced his Model T. He
subsequently perfected the mass production of automobiles, and
America’s love affair with the car had begun. This meant a completely
new market for crude oil. Until the development and widespread
use of the automobile, gasoline was considered a waste
product. But as the number of automobiles grew, so did the number
of gasoline stations across the country.
API’s historical files note that the first “filling” station was
opened in Seattle in 1907 by Standard Oil of California, which is
now Chevron Company USA. The filling station included a hose
that dispensed gasoline directly into the vehicle from an elevated
tank. The first “drive-in” service station opened on December 1,
1913, in Pittsburgh, Pennsylvania.
According to the U.S. Department of Energy, there are now
about 169,000 gasoline stations in the United States. Petroleum and
its products, however, are used in many more ways. These include
heating and cooling homes and factories, manufacturing goods, and
fueling commercial and military aircraft, tractors, and railroads.
New refining processes have led to the creation of thousands of new
products, including bicycles, propane grills, crayons, plastic bottles,
and laundry detergents. One can only imagine how different our
lives would be today without these products, which have made
many things so much easier.
Seven Sisters: Now There Are Four
U.S. entrepreneurs of the twentieth century realized the importance
of petroleum and began to create companies to support this
new form of energy. A study of the petroleum industry parallels
the history and development of the United States and its emergence
as a world leader in industry and technology.
From the industry’s humble beginning grew seven oil companies
that became known as the “seven sisters.” Today, because of mergers
and acquisitions, only four of the original seven remain.
No other name is as associated with those early years as that of
John D. Rockefeller, who founded the Standard Oil Company of
Ohio in 1870. This wealthy young man turned his few years of
experience in the oil field into $1 million in cash and organized
what was to be the first major oil company in the United States.
Rockefeller quickly realized the importance of petroleum and, as
the industry spread to other oil-producing states, so did his expansion
into refineries and pipelines, as well as into overseas markets.
However, public and government outcry over his monopoly of
the petroleum industry led, in part, to the passage of the Sherman
Antitrust Act in 1890. A lawsuit was filed against the company
under the new antitrust laws, but it was not until May 1911 that
the United States Supreme Court ruled that Standard Oil must
totally divest itself of its thirty-eight subsidiaries.
The largest of the subsidiaries was Standard Oil Company of
New Jersey, which Rockefeller formed as a holding company to
escape the tentacles of the antitrust laws. It later became known as
Exxon, the largest oil company in the world. A second Rockefeller
company was the Standard Oil Company of New York, which
bought a Texas producing company called Magnolia. It merged
with another firm called Vacuum and later became Mobil Oil. In
November 1999 the two companies merged and are now known
as ExxonMobil.
Eleven years before Rockefeller was ordered to dissolve his vast
oil empire, he purchased a company and called it Standard Oil of
California, the forerunner of today’s Chevron, USA. Another member
of the early oil family was Gulf Oil Corporation, which was
incorporated in New Jersey through the acquisition of the J. M.
Guffey Petroleum Company and the Gulf Refining Company of
Texas. These two companies were instrumental in the development
of the prolific Spindletop field in Texas. Gulf Oil was acquired by
Chevron in 1984.
The Texas Company—which later became Texaco—was another
one of the sisters that had roots in the Texas oil patch but was
founded by a Pennsylvania merchant. In 2001 Chevron and Texaco
merged and became ChevronTexaco. In 2005 the name was
changed to Chevron.
The last two sisters in the family were Shell Oil and British
Petroleum, and both of these companies were founded in England.
Even today they remain significant players in the worldwide energy
business.
These seven companies, with the ability and finances to get
petroleum out of the ground and get it to market, were to dominate
the petroleum industry for decades to come. They, including
other companies like ConocoPhillips (created in 2002 with the
merger of Conoco and Phillips Petroleum Company) as well as
many other smaller independent companies, are still active in the
day-to-day search for petroleum.
By the mid-1970s, however, it was evident that the destinies of
these large oil concerns were beginning to be inevitably shaped by
a series of uncontrollable occurrences throughout the world, particularly
in Middle Eastern countries—a scenario that hasn’t
changed much even well into the first decade of the twenty-first
century.
By 1929, oil production in the United States had tripled from 1918
levels. It was during that year that American companies produced
one billion barrels of oil for the first time in the short history of the
petroleum industry.
By the spring of 2007, the United States was producing 5.2 million
barrels per day of crude oil—one million barrels fewer than
the decade before. Instead, we now import about 60 percent of our
crude oil.
This oil is moved through more than two hundred thousand
miles of pipelines that crisscross the continental United States, providing
America with a stable and reliable source of fuel. This massive
infrastructure, as critical to our way of life as highways, electric
power lines, and cellular telephone towers, has been built underground
not only for aesthetic considerations but also for environmental,
cost, and security reasons, according to the American
Petroleum Institute.
Another 180,000 miles of pipelines carry natural gas quietly,
reliably, and efficiently throughout North America for heating,
cooking, and other uses, according to the Interstate Natural Gas
Association of America (www.ingaa.org).
Drake and Lucas had paved the way for the wholesale extraction
of petroleum from the ground. Now inventors began to develop
products that opened up a whole new market for crude oil and its
products.
One of the first uses was in the internal combustion engine built
in 1885–1886 by Karl Benz. The concept was improved on by Gottlieb
Daimler, who developed an engine that used a lighter gasoline
vapor. By 1894 Rudolf Diesel had designed the engine that bears
his name today, an internal combustion engine ignited by the heat
of compression rather than by a spark.
However, probably the most significant invention that changed
the way Americans lived came in 1893 with the development of the
first American car by Charles and Frank Duryea in Springfield,
Massachusetts. In 1908 Henry Ford introduced his Model T. He
subsequently perfected the mass production of automobiles, and
America’s love affair with the car had begun. This meant a completely
new market for crude oil. Until the development and widespread
use of the automobile, gasoline was considered a waste
product. But as the number of automobiles grew, so did the number
of gasoline stations across the country.
API’s historical files note that the first “filling” station was
opened in Seattle in 1907 by Standard Oil of California, which is
now Chevron Company USA. The filling station included a hose
that dispensed gasoline directly into the vehicle from an elevated
tank. The first “drive-in” service station opened on December 1,
1913, in Pittsburgh, Pennsylvania.
According to the U.S. Department of Energy, there are now
about 169,000 gasoline stations in the United States. Petroleum and
its products, however, are used in many more ways. These include
heating and cooling homes and factories, manufacturing goods, and
fueling commercial and military aircraft, tractors, and railroads.
New refining processes have led to the creation of thousands of new
products, including bicycles, propane grills, crayons, plastic bottles,
and laundry detergents. One can only imagine how different our
lives would be today without these products, which have made
many things so much easier.
Seven Sisters: Now There Are Four
U.S. entrepreneurs of the twentieth century realized the importance
of petroleum and began to create companies to support this
new form of energy. A study of the petroleum industry parallels
the history and development of the United States and its emergence
as a world leader in industry and technology.
From the industry’s humble beginning grew seven oil companies
that became known as the “seven sisters.” Today, because of mergers
and acquisitions, only four of the original seven remain.
No other name is as associated with those early years as that of
John D. Rockefeller, who founded the Standard Oil Company of
Ohio in 1870. This wealthy young man turned his few years of
experience in the oil field into $1 million in cash and organized
what was to be the first major oil company in the United States.
Rockefeller quickly realized the importance of petroleum and, as
the industry spread to other oil-producing states, so did his expansion
into refineries and pipelines, as well as into overseas markets.
However, public and government outcry over his monopoly of
the petroleum industry led, in part, to the passage of the Sherman
Antitrust Act in 1890. A lawsuit was filed against the company
under the new antitrust laws, but it was not until May 1911 that
the United States Supreme Court ruled that Standard Oil must
totally divest itself of its thirty-eight subsidiaries.
The largest of the subsidiaries was Standard Oil Company of
New Jersey, which Rockefeller formed as a holding company to
escape the tentacles of the antitrust laws. It later became known as
Exxon, the largest oil company in the world. A second Rockefeller
company was the Standard Oil Company of New York, which
bought a Texas producing company called Magnolia. It merged
with another firm called Vacuum and later became Mobil Oil. In
November 1999 the two companies merged and are now known
as ExxonMobil.
Eleven years before Rockefeller was ordered to dissolve his vast
oil empire, he purchased a company and called it Standard Oil of
California, the forerunner of today’s Chevron, USA. Another member
of the early oil family was Gulf Oil Corporation, which was
incorporated in New Jersey through the acquisition of the J. M.
Guffey Petroleum Company and the Gulf Refining Company of
Texas. These two companies were instrumental in the development
of the prolific Spindletop field in Texas. Gulf Oil was acquired by
Chevron in 1984.
The Texas Company—which later became Texaco—was another
one of the sisters that had roots in the Texas oil patch but was
founded by a Pennsylvania merchant. In 2001 Chevron and Texaco
merged and became ChevronTexaco. In 2005 the name was
changed to Chevron.
The last two sisters in the family were Shell Oil and British
Petroleum, and both of these companies were founded in England.
Even today they remain significant players in the worldwide energy
business.
These seven companies, with the ability and finances to get
petroleum out of the ground and get it to market, were to dominate
the petroleum industry for decades to come. They, including
other companies like ConocoPhillips (created in 2002 with the
merger of Conoco and Phillips Petroleum Company) as well as
many other smaller independent companies, are still active in the
day-to-day search for petroleum.
By the mid-1970s, however, it was evident that the destinies of
these large oil concerns were beginning to be inevitably shaped by
a series of uncontrollable occurrences throughout the world, particularly
in Middle Eastern countries—a scenario that hasn’t
changed much even well into the first decade of the twenty-first
century.
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