The Prize

CHAPTER 4

The New Century
THE “OLD HOUSE” was what some independent producers called Standard Oil among themselves. It rose up as a vast and imposing structure, casting its shadow in all directions, dominating every inch of the oil landscape in the United States. While foreign competitors were challenging the “Old House” abroad, there was a certain resignation throughout the United States; it seemed inevitable that Standard would end up owning or controlling everything. Yet developments in the 1890s and the first decade of the new century would pose threats to the preeminence of the Old House. The markets on which the oil industry was based were about to shift drastically. At almost exactly the same time, the producing map of the United States would also change dramatically, and significant new American competitors would emerge to challenge Standard’s dominance. Not only was the world becoming too large even for Standard Oil, so was the United States.1

Markets Lost and Gained
At the end of the nineteenth century, demand for artificial light was met mostly by kerosene, gas, and candles, where it was met by anything at all. The gas was derived by local utilities from coal or oil or by direct production and transport of natural gas. All three of those sources—kerosene, gas and candles—had the same serious problems; they produced soot, dirt, and heat; they consumed oxygen; and there was always the danger of fire. For that last reason, many buildings, including Gore Hall, the library of Harvard College, were not illuminated at all.

The dominance of kerosene, gas, and candles would not last. The polymath inventor Thomas Alva Edison—among whose major innovations were the mimeograph, the stock ticker, the phonograph, storage batteries, and motion pictures—had turned to the problem of electric illumination in 1877. Within two years, he had developed the heat-resistant incandescent light bulb. For him, invention was not a hobby, it was a business. “We have got to keep working up things of commercial value—that is what this laboratory is for,” he once wrote. “We can’t be like the old German professor who as long as he can get his black bread and beer is content to spend his whole life studying the fuzz on a bee!” Edison immediately applied himself to the question of commercializing his invention, and in the process, created the electric generation industry. He even worked very carefully to price electricity so that it would be highly competitive—at exactly the equivalent of the town gas price of $2.25 per thousand cubic feet. He built a demonstration project in Lower Manhattan, whose terr

“To stagnate means to liquidate.”

Oil was still central to security, prosperity, and the very nature of civilization. This remains true in the twenty-first century.