Petroleum: What Is It Good For?

Petroleum, a natural mineral oil, was well known in western Pennsylvania long before its “discovery” near the small town of Titusville in 1859. After all, Titusville was located along Oil Creek, which got its name from the petroleum that local residents skimmed from the creek’s surface. In many other parts of the world, geologists, mineralogists, and naturalists had studied and recorded the locations of petroleum deposits. It had been found in Burma, Italy, Russia, and elsewhere in Europe, where it was used locally, in limited quantities, for burning in lamps or as a medicine. One can find references to mineral oil in the Old Testament, and mineral pitch, a related bituminous substance, was often used as mortar for buildings in the ancient world. The word petroleum , in use since the Middle Ages, means “rock oil,” from the Greek words petros (rock) and elaion (oil).

This history seems solid and timeless. But in fact much of it was first written shortly after the Titusville discovery, just as petroleum began to be marketed on a large scale. One strategy for making petroleum, or anything new, seem less exotic and unknown was to create a long history for it, explaining how common and familiar it was. Almost all accounts of the development of the oil industry, from the 1860s to today—this article included—begin with some type of introduction mentioning the antiquity of petroleum. The product needed a past. It also needed a purpose.

In late August 1859, near Titusville—an isolated lumbering community in the far northwest corner of Pennsylvania—Edwin L. Drake and “Uncle” Billy Smith completed the first commercial petroleum well in the United States. It was a shallow well, only sixty-nine feet deep, and a rather insignificant one, judging from the press coverage it received. The first mention of Drake’s well appeared as a brief notice in the New York Tribune on September 13: “E. L. Drake, well-known on the New Haven railroad … struck a fissure in the rock through which he was boring. When to the surprise and joy of everyone concerned, he found he had tapped a vein of water and oil, yielding 400 gallons of oil every 24 hours.” Four hundred gallons was roughly equivalent to 10 barrels (the average barrel held about 40 gallons). That may not seem like a great deal today, but before Drake’s well, total daily production in Titusville was around 10 gallons. Drake effectively increased it fortyfold.

With such a striking and sudden increase, Drake found it exceedingly difficult to store all his petroleum. He gathered as many empty whiskey barrels as he could from neighboring towns and built two large vats, each holding about 25 barrels. Soon he had almost 300 barrels of petroleum on the well site.

News of his discovery spread quickly. Rumors of untold wealth flowing from the earth sparked the world’s first oil boom. “A wonderful excitement was created all over the land by the striking of this well,” wrote one enthusiast. “Thousands, from all sections of the country, came to see the wonderful phenomena that had been reserved for this, the most enlightened age of the world.” Some likened the oil boom to the California gold rush; the Reverend S. J. M. Eaton, pastor of the local Presbyterian church and resident historian, called the excitement a fever—“men’s pulses quickened, and their hearts beat more rapidly.” Miners, miscreants, assorted adventurers, and all who were gripped by “oil on the brain” flooded into the area, looking to strike oil. “A tide of speculators and operators” washed into the oil regions, wrote one observer, “which would have overpowered that of California … in [its] palmiest days.”

Small oil companies were hurriedly organized, and according to one chronicler, “derricks sprang up as it were almost by magic, in the valleys and ravines.” The second well (after Drake’s) was completed in November 1859, and a third “struck ile” (as the drillers said) in March 1860. It poured forth an enormous amount—75 to 80 barrels a day. By the summer of 1860, a year after Drake’s discovery, a dozen wells were in production in Titusville. By the end of the year, 74 wells in the Oil Creek area were yielding 1,165 barrels a day. Large stocks of petroleum accumulated, prompting Thomas Gale, a resident of Oil Creek, to pose what at the time was a very obvious question: “What is it good for?”

The answer to Gale’s question was less obvious. The uses for petroleum were more or less constrained and defined by the already existing uses for natural mineral oils. Petroleum was familiar to many in the Oil Creek area, and for years it had been bottled and sold as a panacea under the name American oil or Seneca oil. As one resident of Titusville said, “There is hardly a family within forty miles which has not a bottle of it to administer externally in Rheumatism—continuous eruptions of all kinds—burns—scalds—cuts —bruises—and superficial inflammation and internally for more diseases than I can enumerate.” An advertising circular from the 1850s called petroleum “a remedy of wonderful efficacy” and told how “the lame, through its instrumentality, were made to walk—the blind, to see. Those who had suffered for years under the torturing pains of RHEUMATISM, GOUT and NEURALGIA , were restored to health and usefulness.” Despite these curative triumphs, however, the demand for medicinal agents was limited, and one barrel of petroleum could supply more than six hundred individual bottles of the remedy.

Thomas Gale suggested some other answers to his question. He thought petroleum would be “good for the same that other oils are good for.” In a short pamphlet modestly titled The Wonder of the Nineteenth Century: Rock Oil, in Pennsylvania and Elsewhere , often called the first book ever written about petroleum, he supplied a list of possible applications: It could be used to grease wool, prepare paints, light railroad cars, and fuel steam engines. In other words, he tried to introduce petroleum and demonstrate its versatility by showing myriad ways it could meet the already existing demand for oils.

Drake and the directors of the Seneca Oil Company, owners of the Drake well, believed that a key to the commercial success of petroleum lay in its introduction as a lubricant. As American industry steamed toward increasing mechanization—from large railroad companies to small high-speed printing presses—lubricants would surely be in ever-greater demand.

Drake made a sales trip in February 1860 to Chicago, Cincinnati, and Pittsburgh—industrial centers where he hoped to sell petroleum to machinists and others who used lubricants. However, he met with some resistance. One Chicago machinist described the problems with petroleum in a letter to Drake: “Dear Sir, I have been making considerable inquiry in regard to the [petroleum]. I am well pleased with it, and prefer it myself to any I have used. There is, however, a great prejudice against it, among meshyns. This must be overcome. They object on account of the odor. Another says dont use it—you will spoil your mashinery. I tell them the proof of the pudding is in the eating. My impression is, that after indusements to get men to use it, the oil can be generally introduced. I think it would be better however first to run off the most volatile part for burning, would leave the machine oil better.”

This was sound advice. The chief obstacles in trying to sell petroleum were its foul odor and impurities. It needed to be refined. “The oil, as it comes from the well, is a dirty-looking greenish, viscid fluid,” one visitor to Titusville remarked. “[It] is impure, and … must be refined before it is suitable for use.” Drake had discovered as much on his sales trip.

Refined petroleum could have other applications besides lubrication. As the machinist had suggested, the volatile portion could be “run off” and used for burning in lamps. The potential market for petroleum illuminants, as Drake well knew, might be even greater than that for lubricants. In 1855, four years before Drake had sunk his well, the directors of the Pennsylvania Rock Oil Company (parent of the Seneca Oil Company, which employed Drake) had hired Benjamin Silliman, Jr., professor of general and applied chemistry at Yale College, to analyze a petroleum sample. Silliman found that petroleum could be distilled into a number of different products, foremost among them an illuminant. He used a photometer to compare the intensity of light emitted by distilled petroleum with that from various other illuminants. The petroleum equaled or surpassed most other products then on the market. “I cannot refrain from expressing my satisfaction,” Silliman wrote, “at the results of these photometric experiments, since they have given the Oil of your Company a much higher value as an illuminator than I had dared to hope.”

Thomas Gale, the petroleum pamphleteer, was in rapturous accord: “As an illuminator the oil is without a figure; It is the light of the age . In the opinion of some who have considered the subject, illuminating is its grand office. Those who have not seen it burn, may rest assured its light is no moonshine ; but something nearer the clear, strong, brilliant light of day. … In other words, rock oil emits a dainty light; the brightest and yet the cheapest in the world; a light fit for Kings and Royalists, and not unsuitable for Republicans and Democrats. It is a light withal, for ladies who are ladies indeed , and so are neither afraid nor ashamed to sew or read in the evening.” In short, the general opinion around Titusville in 1860 about what to do with petroleum was first to refine it. Before petroleum could be widely introduced as a lubricant or an illuminant, it needed to be deodorized, decolored, and purified.

Drake had already found outlets for his production. Soon after he began pumping his well, he had contracted to sell his petroleum to Samuel M. Kier, a Pittsburgh oil distiller. Kier had actually been in the oil business for a decade, selling medicinal petroleum and refining illuminants—which he called carbon oil—from the relatively small amounts of petroleum found in salt wells. Kier agreed to buy the bulk of Drake’s petroleum production during his first six months of operation. In March 1860 Drake signed a deal with Schieffelin Brothers and Company of New York City, a wholesale drug firm, which agreed to distribute the product.

Many of the other oil companies were not so fortunate in finding outlets for their rapidly increasing production. Besides the two small firms of Kier and Schieffelin Brothers, practically no other petroleum refiners existed. The solution, as many producers came to realize, was to build their own refineries.

The first petroleum refinery in Titusville was built during the fall of 1860, and by the end of the year a total of 15 were operating. As oil derricks sprang up over the next few years, the number of refiners mushroomed. In 1863 there were more than 60, and by the end of the Civil War 90 refineries dotted the countryside. A newspaper correspondent commented on these humble operations, noting that they “are very numerous in a small way, consisting of merely a stone-hut connected with an adjacent board shanty by a trough, the whole surrounded by a few oil-barrels. … The said shanty invariably has ‘no admittance’ over the door.”

The proliferation of backwoods refineries during the early years of the petroleum industry was spurred by the fact that the costs of entering the business were low. The technology, both equipment and know-how, was readily available. Thomas Gale estimated that a small refinery that could run about 5 barrels per day would cost only $200; “works which will clarify 10 barrels a day,” $300.

The actual process for refining petroleum was simple and straightforward. Schieffelin Brothers, the firm that had contracted with Drake, would, for the price of a postage stamp, send “directions for distilling and refining the Oil pumped from the recently discovered Oil Springs of Pennsylvania.” The Reverend S. J. M. Eaton summarized these easy instructions in an 1865 account of the oil boom: “In the process of refining, as now pursued, the still should be filled with crude oil to within one-tenth of its capacity … and the fire kindled underneath. The business is carried on in works of various capacities … and usually the capacity is from twenty to fifty barrels. The stills are of wrought iron, set in masonry with a furnace underneath for the adjustment of fire. The still is simply a mighty retort, with its pipe connected with a condenser, or long coil of pipe, in a vessel of cold water, in which the vapor, driven off by heat, applied to the retort is condensed into … ‘distillate,’ as the new product is termed.”

During the process several distillates were usually run off. The lightest, most volatile fractions, called gasoline, came over first, then naphtha or benzine, then illuminants, and finally heavier lubricants. The question now facing petroleum refiners was how to market all these distillates. They came up with numerous strategies, all of which, in some way, were geared to take advantage of the already existing coal oil market in lubricants and illuminants.

To many, including Drake, refined petroleum most closely resembled coal oil, an “artificial” oil manufactured by the destructive distillation of certain types of coal. At the time of Drake’s discovery, 56 large coal oil manufacturers, 11 in New York City alone, combined to produce more than 600 barrels per day. To the public their product was synonymous with the best and safest illuminants and lubricants, and the best-quality coal oil illuminant was the well-known Kerosene, a patented trade name.

Many petroleum refiners simply marketed petroleum as coal oil or even as Kerosene. Refined petroleum not only looked like coal oil but burned in lamps much the same way—without odor or smoke. In fact, it was nearly indistinguishable from coal oil. Packaging petroleum in the guise of a familiar product would help overcome resistance to the innovation.

But not all refiners adopted this approach. A few chose to emphasize the distinctive characteristics of petroleum and boast to the public that their product was a petroleum illuminant or lubricant. Samuel Kier, the distiller with whom Drake had first contracted, advertised his carbon oil thus: “Is not a Coal Oil, But is for burning in Coal Oil Lamps, a liquid Mineral Oil, obtained from boring 450 feet deep, in the Alleghany Mountains, near Pittsburgh.… Will burn as long as the best coal oil! ! ! !”

At first coal oil interests were not sure how to respond. Petroleum illuminants and lubricants competed in the market, but for most of 1860 and 1861 they remained insignificant in terms of distribution. Petroleum products were roughly comparable in price, but many coal oil companies believed the underground sources would soon be exhausted, leaving the fledgling industry literally dry.

By 1862, however, the scene had begun to change. Petroleum production had not dropped off but increased dramatically due to the discovery the previous spring of flowing wells—that is, ones that needed no pumps because the petroleum actually flowed out. Some of these produced several thousand barrels a day, and the surplus drove the price of petroleum down to new lows. It also convinced coal oil manufacturers that petroleum supplies were not going to run out.

Along with cheap and abundant supplies of their raw material, petroleum refiners also enjoyed a lower operating cost than coal oil manufacturers. Theirs was basically a one-step process of distillation—heating the petroleum and condensing the vapors that came off. Coal oil manufacturing, by contrast, required two steps: The coal had to be heated slowly in a retort in order to produce a crude oil, and then that oil needed to be distilled just like petroleum. (In addition, both coal oil and petroleum had to be treated with acid and alkali after distilling to completely remove odors and impurities.)

One petroleum refiner described the advantage this way: “A few hands suffice; and so does a little fuel, compared with what are needed in [coal oil] works, where many tons of coal must be handled over daily and intense fires kept up to melt it, as well as to refine the oil after it is extracted.” Coal oil companies realized that they could best overcome their manufacturing disadvantage by simply switching from coal to petroleum as a raw material.

Converting to petroleum was in practice quite easy, and a number of large coal oil companies began to do so. The New York Kerosene Oil Company, one of the coal oil companies that had exclusive rights to the trade name Kerosene, started supplementing its coal with petroleum in the early 1860s, and by 1863 it had converted completely. Since the patented name covered only the manufacturing process using coal, once coal oil companies began using petroleum, the way was open for all other petroleum refiners to co-opt the popular trade name. By the end of the Civil War, “kerosene” had become a common name for all such illuminants.

By that time nearly every coal oil manufacturer had become a petroleum refiner. The cost of converting to petroleum had proved to be lower than the cost of competing with it. It was the best way for the coal oil industry to survive. Petroleum innovation thus was secured through the reorganization of the established coal oil industry.

Kerosene remained the dominant illuminant in the United States. Indeed, it reigned as the largest-selling petroleum product in America until as late as 1911, when the burgeoning popularity of the automobile enabled gasoline to surpass it. Petroleum production rapidly spread beyond the handful of counties in western Pennsylvania where the oil boom had begun to Ohio, Indiana, and West Virginia. By the beginning of this century, California had replaced Pennsylvania as the country’s largest producer, and new strikes in Texas and Oklahoma greatly changed the scale and scope of the industry.

At the same time, remarkable developments were under way in the automobile industry and in the new field of chemical engineering. The backwoods distiller of the 1860s would be amazed at the sight of a twentieth-century oil refinery. But today’s enormous international oil industry and the world’s voracious appetite for petroleum all began when a group of Pennsylvania drillers had barrels full of the stuff and needed to find uses for it.