Beginning in the mid 1800’s two things happened that would foster the coming rise of the oil industry. On August 27, 1859 Colonel Edwin L. Drake struck oil while drilling in Titusville Pennsylvania. Also, that same year French engineer J.J. Etienne Lenoir invented the internal combustion engine, which so happened to run on the gasoline created through refining crude oil. Drake striking oil began the Pennsylvania oil rush, with everybody wanting in on the newfound source of wealth. Etienne’s invention of the internal combustion engine paved the way for the creation of the automobile. Innovation was slow and the refining process still had its problems. As well as the potential of the internal combustion engine was not seen. So, almost 40 years passed before the oil industry began to take off. During these years deeper oil wells were drilled and the refining process was optimized. The first oil refinery was opened in 1862 and using atmospheric distillation it produced kerosene and gasoline. Several years after the turn of the century Henry Ford’s Model T had been introduced to the market and over 125,000 automobiles were in the country. In 1910 the oil industry took a hit as the invention of electric light bulbs made kerosene irrelevant. In 1911, the public’s demand for gasoline was still on a heavy incline and oil companies knew they had to do something or else they would not be able to meet the coming demand. They developed thermal cracking in 1913, which allowed them to produce more gasoline and diesel per barrel of oil and meet the market demand.
During World War 1 oils dominance as a resource was affirmed. England converted over to oil-powered warships which were more maneuverable and sustainable than Germany’s coal-powered fleet. As well as planes and tanks made their introduction to the battle field, both being powered by gasoline. In order to make sure Allied vehicles of war were kept supplied, major U.S. oil companies worked with the Federal Fuel Administration in 1917 to coordinate the production, refining, and shipping of oil. After the war the U.S. had a large period of economic growth due to the swift construction of roads and bridges. Between 1920 and 1930, American ownership of automobiles soared, increasing from 8.1 to 26.7 million. Through the 1930’s oil companies continued to expand, building more refineries and improving refining techniques, which resulted in higher grade products. These high-octane fuels helped optimize the performance of Allied engines during world war 2, helping Allied planes outmaneuver German planes. U.S. refineries were key in keeping the Allies supplied with fuel, providing up to 80% of the fuel that was used during the war. Joseph Stalin said “This is a war of engines and octanes. I drink to the American auto industry and oil industry.” in a toast near the end of the war. Say what you will about Joseph Stalin, but even he recognized the contribution that higher end fuels had on the war. World War 2 also led to the development of long-distance pipelines because the U.S. needed a more efficient way to transport crude oil to keep up with the need during the war. In 1942 engineers began construction on the world’s longest crude oil pipeline called “The Big Inch,” which covered 1,254 miles and moved crude oil from Texas to the East Coast to be refined.
In the aftermath of World War 2 the U.S.’s economy boomed. It became a world superpower and created as much wealth from 1950 to 1965 as it had since 1607. The nation’s wealth doubled again from 1965 to 1980. The Oil Industry profited greatly from Americans buying over 8 million new cars per year during the 60’s and with the start of commercial jet airlines they gained another large customer. In 1960 jet fuel demand was at 280,000 barrels per day, which increased in 1970 to 970,000 barrels per day. During the 1970’s the harmful effect of industrialization on the environment grabbed the public stage and the cause was championed by the public, which caused the government to take action. In 1970, the government established the Environmental Protection Agency and put into effect regulations which forced the refining industry and automobile industry to become more environmentally friendly. Also, around that time the United States realized its growing dependence on oil imports. The 1973 embargo on oil imports by the Organization of Petroleum Exporting Countries hit the U.S. shockingly hard and caused a shortage of fuel, which led to long gas lines and other problems, including a hit to the economy. The fuel and auto industries once again worked together and over the next three decades they researched and developed superior engines and more efficient fuels. An example of this is that they raised the average miles per gallon of light-duty vehicles from 13.7 in 1975 to 24.2 miles per gallon in 1988. They also completed eliminated lead residue from gasoline. In 2002 cars released 97% less pollution than they did in 1965, according to the Environmental Protection Agency. Surprisingly, even though we drive 150% more than we did in 1970, we realise 30% less emissions, with that percentage on an upward trend.
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