History of Gas Production
"Gas," or gasoline, has only been produced commercially for a little over 100 years, but it has nonetheless transformed our world like no other power source before it. With gas we are able to travel hundreds of miles in the amount of time it might have taken our ancestors to walk to a neighbor's house. Understanding the way gas has been produced, and consumed, in the past 100 years may shed some light on why it is important to begin conserving this important resource.
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Black Gold
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Farmers in western Pennsylvania had been plagued by mysterious pools of black liquid that oozed to the surface and ruined crops nearby. Though the black oil was useful for greasing axles on their carts, the liquid was largely considered a nuisance. By the late 18th century, however, some chemists figured out a way to refine petroleum oil into a clear, hot-burning fuel called kerosene. In the 19th century, whale oil and blubber provided light and grease for America's burgeoning industries, but whales were becoming harder to find. Kerosene, and petroleum oil, were seen as possible (and promising) alternatives to whale oil.
Infrastructure
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One of the largest problems with kerosene production was infrastructure; the costs to extract, refine and ship kerosene were increased dramatically due to a lack of easy access to the source of kerosene, the hinterlands of western Pennsylvania and eastern West Virginia. Several small companies tried to set up extraction and refining facilities near the sources, but lack of access to good roads or inexpensive railroads hampered their ability to provide a reliable source of petroleum and kerosene.
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Rockefeller
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In 1872, John D. Rockefeller was a promising businessman with some connections in the railroad industry, when he decided to take a gamble on producing kerosene, gasoline and petroleum products. Establishing a large refinery in Cleveland, Ohio, Rockefeller struck a deal with the railroad companies to bring him the raw material and distribute the finished products to markets in New York, Chicago, Boston and San Francisco. Though the prices for transportation by railroad were fairly steep, his connections within the railroad industry won him some "rebates" for his patronage, which made distribution inexpensive and lowered his cost overhead.
Standard Oil
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John D. Rockefeller used this competitive advantage to buy up or buy out his competitors, and by 1911 his monopoly on the gasoline, kerosene and petroleum trade in America became the target of Federal antitrust laws. In "Standard Oil Co. of New Jersey v. United States" the Supreme Court ruled that Standard Oil was a monopoly and had tot be broken up into 20 competing companies. Though these companies were nominally independent, Rockefeller owned controlling interest in all 20, thus negating much of the power of the ruling.
Still, the United States was the largest gas producer in the world by 1920, relying largely on reserves found in Texas and Oklahoma.
Consumption
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With the inexpensive manufacture and distribution of gasoline, coupled with the affordability of personal automobiles, America became a "car culture." American consumption of gasoline was so high that, by the 1960s, the United States was the largest importer of oil and petroleum products in the world. Though most of the imported oil America now uses comes from Mexico and Venezuela, fluctuation in the market price can, and did, severely affect the price of gasoline. For example, in 1973, as a show of solidarity with Syria and Egypt, Saudi Arabia and other members of the Oil Producing and Exporting Countries (OPEC) reduced oil output, causing a crisis in the United States; prices skyrocketed and shortages led to public anger. Manipulation of petroleum futures by speculators in 2008 had similar results, with gasoline prices tripling (or more) over the course of the summer and shaking consumer confidence in the economy.
Efficiency
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Gasoline production is at an all-time high, according to API, the Association of the Petroleum Industry. Internal combustion engines have gotten more efficient over time, but other factors diminish these gains. While engines are more efficient, the weight of vehicles in the past 20 years has increased by over 1000 pounds (largely due to the American fascination with SUVs), thus negating many of the advancements made in gas production and engine efficiency.
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