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Unformatted text preview: 1. Oil on the Brain The Beginning Major Themes • Idea of switch-point, transition from whale oil to petroleum • Technological innovation is key • Boom phenomenon – role of profits • Backside is a bust • Pennsylvania, 1860-1890, the dominant oil producing region in the world The Impetus: Demand for Light • Productivity gains from light • Many different fuels – Animal grease – Vegetable fat – Camphene – Town gas – Whale oil • Whale oil was the highest quality Depletion of Whales • Whale population had been exhausted in the Atlantic • Whalers had to continue to travel exceedingly far distances into the Pacific • Prices climbed to $2.50 per gallon ($25 / gallon in today’s dollars) • Entrepreneurs had an incentive to find a substitute Backstop Technology: Kerosene • Dr. Abraham Gesner – Developed a process for extracting an oil from asphalt & refining it into a high quality illuminating oil – He named this oil: Kerosene – Keros and elaion: Greek for wax and oil, then changed elaion to ene to make it sound familiar to camphene • By 1859: About 34 companies in the U.S. were producing $5 million a year worth of kerosene from coal & other sources • Eastern Europe was also beginning to produce crude, from which kerosene was obtained; during 1859 about 36,000 barrels had been produced The Rise of Kerosene • The spread of kerosene in the 1850’s faced two significant barriers: No substantial source of supply No cheap lamp well-suited to burning kerosene available • Both of these factors were overcome by: Import of the Vienna lamp by a New York salesman The visions of George Bissell George Bissell • The driving force behind the creation of the modern oil industry as we now know it. • He knew that oil was flammable and conceived that it could be used as a high quality illuminant. • Saw an advertisement for medicinal oil that showed salt drilling derricks, thought that oil could be obtained by drilling • Just need a cheap way to get raw material for kerosene Bissell and Company • Partnered with James Townsend, the banker who helped fund the idea. • Hired Professor Silliman of Yale to analyze the substance for the properties of a quality illuminant. Silliman’s Report • “Gentlemen, it appears to me that there is much ground for encouragement in the belief that your Company have in their possession a raw material from which, by simple and not expensive processes, they may manufacture very valuable products.” • Silliman’s study was the turning point in the establishment of the petroleum industry • Reported use of oil: – It could be brought to various levels of boiling and thus distilled into several factions, all composed of carbon and hydrogen – One of these fractions was a very high-quality illuminating oil “Colonel” Drake • Edwin L. Drake lived in the same hotel in New Haven as Townsend and they became quick friends • Drake, who was quite outgoing, often talked business with Townsend – he was...
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