PA WINERY SURVIVALCOPYRIGHT F. GADEK 04/18/2003 1 SOME ASPECTS OF BEGINNING OIL INDUSTRY IN PENNSYLVANIA & USA FRANK J. GADEK, PH.D., FAIC

PA WINERY SURVIVAL COPYRIGHT F. GADEK 04/18/2003

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SOME ASPECTS OF BEGINNING SOME ASPECTS OF BEGINNING OIL INDUSTRY IN PENNSYLVANIAOIL INDUSTRY IN PENNSYLVANIA

& USA& USA

FRANK J. GADEK, PH.D., FAIC


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TOPIC –

“ SOME ASPECTS OF SOME ASPECTS OF BEGINNING OIL INDUSTRY IN BEGINNING OIL INDUSTRY IN

PENNSYLVANIA & USA PENNSYLVANIA & USA “

SCIENCE, TECHNOLOGY & SOCIETY { “STS” }

BYFRANK J. GADEK, PH.D.

“ “ STILL INITIAL DRAFT ONLY “ STILL INITIAL DRAFT ONLY “


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BENJAMIN SILLIMAN, JR, WELL RESPECTEDCHEMIST AT YALE UNIVERSITY 1850’SDID RESEARCH PROJECT ON PA “ROCKOIL” FOR GEORGE BISSLE, NEW YORKLAWYER & JAMES TOWNSEND, PRESIDENT OF BANK IN NEW HAVEN, CT?

BUT SILLIMAN WAS NOT PAID FEE $526.08EQUIVALENT IN 1991 TO $5000]

SILLIMAN SON OF GREAT AMERICAN CHEMIST

[P#19, 21, “THE PRIZE,” DANIEL YERGIN, 1991]


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“ROCK OIL” – NOT FROM VEGETABLE &ANIMAL FATS – FOUND IN SALTWELLS AROUND OIL CREEK, NW PA

ONLY A FEW BARRELS OBTAINED BYPRIMITIVE MEANS – SKIMMING &USE OF OIL SOAKED CLOTHS

USE MEDICALLY

COULD IT BE EXPLOITED IN LARGERQUATITIES FOR ILLUMINATION?

[P#19, “THE PRIZE,” DANIEL YERGIN, 1991]


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IN 1850’S COAL OILS USED FOR ILLUMINATION

ALSO COULD BE USED FOR LUBRICATIONOF MODERN MACHINERY OF NEWMECHANICAL AGE – LARD NOT SUFFICIENT

THEY BECAME PERSUADED BY THEIR OWNDREAM & PROSPECT OF RICHES

BASIS FOR “AGE OF OIL”[P#19-20,23, “THE PRIZE,” DANIEL YERGIN, 1991]


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SILLIMAN’S REPORT DATED APRIL 16, 1855FORMED BASIS FOR INVESTORS

A “TURNING POINT” FOR PETROLEUMBUSINESS

DEMAND FOR ILLUMINATION INCREASEDDUE TO INDUSTRIAL REVOLUTIONINCREASED POPULATION &ECONOMIC DEVELOPMENT



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ILLUMINATION FROM:ILLUMINATION FROM:

ANIMAL OR VEGETABLE OIL

COAL GAS – “TOWN GAS” – DISTILLED FROMCOAL – BUT EXPENSIVE

SPERM WHALE OIL – BUT DECLINING DUETO OVERHARVEST – BUT EXPENSIVE

CAMPHENE – DERIVATIVE OF TERPENTINE –BUT COULD EXPLODE



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CANADIAN DR. ABRAHAM GESNERWHO DEVELOPED “KEROSENE” =KEROS & ELAION GREEK FOR WAX& OIL – ELAION CHANGED TO ENE TOSOUND MORE LIKE CAMPHENE

1854 GESNER APPLIED FOR US PATENT FORKEROSENE FOR ILLUMINATION

1859 HE ESTABLISHED KEROSENE WORKSIN NEW YORK CITY – PRODUCED5000 GALLONS / DAY

1859 ABOUT 34 COMPANIES IN US PRODUCING$5 MILLION / YEAR OF KEROSENE



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FASCINATING ANCIENT HISTORY OF OILFASCINATING ANCIENT HISTORY OF OIL

SMALL OIL INDUSTRY DEVELOPED INEASERN EUROPE – FIRST IN GALICIA

CHEAP LAMP INVENTED THERE TO BURN KEROSENE

1854 KEROSENE A STAPLE OF COMMERCEIN VIENNA

1859 ABOUT 36,000 BARRELS PRODUCEDMOSTLY FROM GALICIA & ROMANIA

[P#24,25, “THE PRIZE,” DANIEL YERGIN, 1991]


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BUT IN 1850’S USA & KEROSENE:HAD NOT SUBSTANTIAL SOURCE OF

SUPPLYNO CHEAP LAMP WELL SUITED

TO BURN ITBISSEL & INVESTORS IN PA ROCK

OIL COMPANY – NEEDED SOURCE& RIGHT PRICE

DRILLING BETTER / CHEAPER THAN“DIGGING” FOR OIL



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ADAPT SALT BORING / DRILLING TOOIL

BUT MANY SKEPTICAL

HIRED “COLONEL” EDWIN L. DRAKE[TITLE NOT REAL! ONLY FOR PR]

1857 HE ARRIVED AT TITUSVILLE, PAPOPULATION 125, IMPOVERISHEDVILLAGE IN NW PA



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1858 DRAKE SET UP SENECA OILCOMPANY NEAR TITUSVILLE, PA

SENECA NAME OF LOCAL INDIAN TRIBE

FARM HAD AN OIL SPRING & 3 – 6 GALLONSOF OIL / DAY COLLECTED BYTRADITIONAL METHODS [SKIM,RAGS???]



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HE WAS PERSISTENT & FOUND OILAUGUST 27, 1859 AT 69 FEET

COULD EVEN PUMP IT OUT WITH COMMONHAND PUMP

FINAL PAYMENT HAD BEEN SENT TO DRAKEAT END OF AUGUST SINCE ORGANIZATION OUT OF MONEY

BUT HIS SUCCESS “JUST IN TIME!”



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SUCCESS CAUSED MAD RUSH TO AREA,POPULATION INCREASED & LANDPRICES SHOT UP FAST

DRAKE GOT EVERY WHISKEY BARRELCOULD TO FILL WITH OIL

BUILT WOODEN VATS TO HOLD OIL

BUT FIRE BURNED ALL!

HOWEVER, PRICE PLUMMETED SINCESUPPLY OUTRAN DEMAND



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NO SHORTAGE OF OIL DUE TOEFFICIENCY OF DRILLING

ONLY SHORTAGE WAS WHISKEYBARRELS TO STORE IT IN!!!

BARRELS SOON COST MORE THANTWICE THE VALUE OF OILIN THEM!!!



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ADVANTAGES OF KEROSENE FOR ADVANTAGES OF KEROSENE FOR ILLUMINATIONILLUMINATION:DAINTY, BRIGHT, CLEAR,BRILLIANT LIGHT OF DAY,& CHEAP!

BISSEL BECAME VERY WEALTHY &DONATED 6 BOWLING ALLEYSTO HIS COLLEGE DARTMOUTHSINCE HE GOT INTO DISCIPLINARYTROUBLES INDULGING IN THISSINFUL SPORT & WHERE HE SAW HIS FIRST BOTTLE OF “ROCK OIL”



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DRAKE DID NOT DO WELL:DRAKE DID NOT DO WELL:

NOT GOOD BUSINESS MAN1866 LOST ALL HIS MONEYSEMI-INVALID LIVING IN POVERTY1873 STATE OF PA GAVE HIM SMALL

LIFETIME PENSION FOR HISSERVICE

LIVED IN BETHLEHEM, PA & BURIEDNEARBY [REF???]



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BY 1860 15 REFINERIES OPERATINGIN PA OIL REGION & 5 IN PITTSBURGH

NOW MANY COAL-OIL REFINERS WOULDBE PUT OUT OF BUSINESS

APRIL 1861 FIRST “FLOWING WELL” –OIL GUSHED OUT AT 3000 BARRELS/ DAY

PRODUCTION INCREASED:1860 450 BARRELS, 1862 3 MILLION BARRELS



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BUT DEMAND DID NOT KEEP BUT DEMAND DID NOT KEEP UP WITH SUPPLYUP WITH SUPPLY

SO PRICES DROPPED:JANUARY 1861 $10 / BARRELJUNE 1861 50 CENTS / BARRELMAY 1861 10 CENTS / BARREL& MANY PRODUCERS RUINED

BUT DEMAND INCREASED:END 1862 ROSE TO $4 / BARRELSEPTEMBER 1863 $7.25 / BARREL



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IN LESS THAN 2 YEARS, ONE WELLGENERATED $15,000 PROFITFOR EVERY DOLLAR INVESTED

ENTHUSIASM FOR OIL ENTEREDPOPULAR CULTURE – MUSIC – MANYSONGS WRITTEN ABOUT OIL

MUCH “BOOM & BUST” EVENTS!

[P#30,31, “THE PRIZE,” DANIEL YERGIN, 1991]


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PA TIDEWATER OIL PIPELINE END OF 1870’SPA TIDEWATER OIL PIPELINE END OF 1870’SWORLD’S FIRST ATTEMPT AT

LONG-DISTANCE PIPELINENO PRECEDENT & NO GUARANTEES

TECHNICALLY POSSIBLE110 MILES FROM PA OIL REGIONS TO

READING RAILROADMAY 1879 OIL FLOWING IN PIPELINE!COMPARABLE TO BROOKLYN BRIDGE’

4 YEARS LATERBECAME MAJOR COMPETITOR WITH

RAILROAD FOR LONG DISTANCETRANSPORTATION



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WAY TO BREAKOUT OF STANDARDOIL’S CONTROL

BUT STANDARD OIL EVENTUALLYCONTROLLED EVERY INCH OFPIPELINE INTO & OUT OF PA OIL REGIONS, EXCEPTSOME OF TIDEWATER



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ONLY POLITICAL SYSTEM & COURTSCOULD HOLD GIANT STANDARDOIL IN CHECK + PUBLIC OPINION

THAT IS ANOTHER “STORY”



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JOHN D. ROCKEFELLERJOHN D. ROCKEFELLERBOUGHT OIL REFINERY IN 1865

FOR $72,500 ON A HANDSHAKE!PROVIDED ORDER OUT OF CHAOS

OF WILD PA OIL BOOMRISE OF STANDARD OIL CO.OPERATED USING MERCILESS

METHODS & UNBRIDLEDLUST OF LATE 19TH CENTURYCAPITALISM

NEW ERA – BECAME ONE OF FIRST & BIGGEST MULTINATIONAL COPORATIONS



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DON’T KNOW REFERENCE

WHEN ROCKEFELLER IN HIS 90’S& IN FAILING HEALTH –

HIS “NURSE” LET HIM HAVE A COOKIE& SOME MILK

THE MOST POWERFUL BUSINESS PERSON IN THE WORLD???


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AND SO IT AND SO IT ALL BEGAN!!!ALL BEGAN!!!


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TO BE CONTINUED AS TO BE CONTINUED AS

INTEREST &INTEREST &

RESOURCES PERMITRESOURCES PERMIT

JUST LET ME KNOW !JUST LET ME KNOW !


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Documents

PA WINERY SURVIVALCOPYRIGHT F. GADEK 04/18/2003 1 SOME ASPECTS OF BEGINNING OIL INDUSTRY IN PENNSYLVANIA & USA FRANK J. GADEK, PH.D., FAIC