Today’s American oil industry essentially can be traced back to a man named John D. Rockefeller. Rockefeller, who lived in Ohio, was new to the oil refining business back in the 1860s and in 1870, he decided to form a business partnership. He gathered his brother William, an industrialist named Henry Flagler, a chemist named Samuel Andrews, a businessman named Steven Harkness, and William’s brother-in-law, Oliver Burr Jennings. The business was called the Standard Oil Company and it became one of the largest influences in American history.
During the late 1800s, America was transitioning from an agricultural country to an industrial country, and the oil industry was just beginning to grow. At the time, kerosene was being used for light (such as oil lamps), so instead of choosing to drill for oil and risk not finding any, Rockefeller decided to get into the refining business and instead, refine oil into kerosene.
Because Standard Oil was one of the first major oil businesses formed, it was ahead of the game and didn’t take long to evolve; in just a couple of years, the company dominated much of the competition in Ohio’s surrounding states and within the decade, it took control of about 90% of the oil refineries in the U.S. By 1882 (just twelve years after the business began), all of Standard Oil’s affiliates and properties were merged into the company, and Standard Oil became a monopoly.
As a monopoly, the company was able to dissolve smaller oil businesses and reduce competition as well as control the overall sale price of oil. It also built relationships with the railroad and other industrial businesses and was able to negotiate deals with them. This made Standard Oil very profitable and it soon expanded to overseas markets in Europe and Asia.
Soon, Rockefeller and his company came under attack for being a monopoly and several legal cases were brought against Standard Oil. By 1911, the United States Supreme Court eventually ruled that because the company was a trust, it must cease to exist. Standard Oil was broken up into a variety of subsidiaries:
- Standard Oil of Ohio
- Standard Oil of New Jersey
- Standard Oil of Indiana
- Standard Oil of New York
- Standard Oil of Kansas
- Standard Oil of Missouri
- Standard Oil of California
- Standard Oil of Kentucky
- Standard Oil of Iowa
- Standard Oil of Minnesota
- Standard Oil of Illinois
- Standard Oil of Nebraska
- Standard Oil of Louisiana
Each of these subsidiaries eventually became a well-known oil company that we know today. Many of today’s gasoline brands stem from the original Standard Oil Company. For example: Standard Oil of New Jersey became Exxon while Standard Oil of New York became Mobil. Standard Oil of California became Chevron and Standard Oil of Indiana became Amoco. In addition, there are nearly two dozen other oil companies that can say they began with Rockefeller’s Standard Oil, which makes the original oil refinery a pretty large chunk of our nation’s oil industry history.
*Photo courtesy of http://wvpublic.org/