Fifty Things You Need to Know About World History. Hugh Williams

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       CHAPTER 7

       The Foundation of Oil City, Pennsylvania 1859

      In 1859 the world’s first commercially successful oil well was drilled in Titusville, Pennsylvania. The world discovered a commodity that would become one of the most valuable it had ever known.

      In the late 1850s a former railway conductor called Edwin Drake turned up in the small community of Titusville, Pennsylvania in the United States. He had been sent there by a speculator who wanted him to see if oil could be extracted from the rocks in the area. Local farmers had complained for years that oil seepage polluted their wells. If its source could be located and extracted it could turn out to be a lucrative business opportunity. The speculator, James Townsend, had seen a report from a Yale University chemistry professor which said that oil, once refined, could be used for lighting, lubrication and other purposes. Townsend seems to have liked running his investments on a shoestring. The story goes that he only hired Drake because as a former employee he had a free pass on the railway.

       Drake used his steam engine to drill for six days a week.

      For the best part of a year Drake experimented with ways of trying to get to the oil, including using the money from his backer and his associates to buy a steam engine to bore down into the rock. They decided against giving him any more advances once he had spent the equivalent of $2,000 without any results – so Drake pressed on with funding the exploration from his own savings. Throughout the summer of 1859 he used his steam engine to drill for six days a week. When water flooded his borehole he drove down an iron pipe to protect his drill. On 27th August, at a depth of nearly seventy feet, he found what he had been looking for. Oil bubbled up to meet him: the world had discovered a new supply of fuel.

       Oil bubbled up to meet him [Drake]: the world had discovered a new supply of fuel.

      The Pennsylvania oil well was the first successful commercial enterprise, but drilling for oil had already begun on the other side of the world. Russian engineers had started sinking wells ten years earlier on the Aspheron Peninsula near Baku in Azerbaijan. In 1846 they reported to the Tsar that they had been successful, but development thereafter was rather slow. Imperial permission for drilling more wells was not given until more than twenty years later when Azerbaijan began to grow into a huge oil-producing area. By the end of the nineteenth century, Russia was competing with the United States as the world’s biggest producer of oil: in 1900 it was producing 11.5 million tons a year compared to America’s 9.1 million, but after the Bolshevik Revolution, oil production was diverted to domestic needs. The market, and the money that went with it, was left to America.

      As is often the way with these things, no money found its way into Edwin Drake’s pocket. He eventually retired with a pension of $1,500 a year. Others, however, became fabulously wealthy as they learned how to own and distribute the vast reserves of oil that lay beneath the American continent. In the same year that Drake found oil in Pennsylvania, two young ambitious businessmen, John D. Rockefeller and an Englishman called Maurice Clark, opened a wholesale trading business a hundred miles away from Titusville in Cleveland, Ohio. Four years later, with the American Civil War still in full force, oil had turned the region into a fuming and disreputable place, thick with oil leaks, bars and brothels, known locally as ‘Sodden Gomorrah’. Rockefeller, a stern Baptist and anti-slavery campaigner, stayed out of the war for fear of losing his business. ‘Those vast stores of oil were the gifts of the great Creator,’ he said later, without adding that he was determined to turn the Lord’s benevolence to his own advantage. He set up an oil-refining business with Clark and several other associates, and on 14th February 1865, exactly two months before Abraham Lincoln was assassinated following the defeat of the Confederate Army, bought out his partners for $72,500. ‘It was,’ he recalled, ‘the day that determined my career.’ Within four years, helped by an economy that had started to grow again in a country at peace at last, Rockefeller was running the world’s biggest oil-refining business, producing ten percent of its output. At the age of thirty he changed his company’s name to Standard Oil.

       Oil became a vital ingredient in national survival.

      Rockefeller was not the only entrepreneur to recognise the value of oil. In 1864, a young Scotsman called Andrew Carnegie who had made money by building sleeping cars for first-class travel on the railways, invested $40,000 in a Pennsylvania oil well. The huge profits he made provided him with the foundation of a business empire on a similar scale to Rockefeller’s. Carnegie eventually made most of his money from iron and steel, though it was oil that set him on the road to enormous wealth. Rockefeller always stuck with oil, first forming a cartel with the railroad companies to control distribution СКАЧАТЬ