NPN is 100 years old, and we’ll be celebrating this milestone throughout 2009 with features covering the decades from then until now. We kick our tribute off with this piece on the first ten years NPN was in publication.
The Industry, 1909-1919 Creating the Gas Station
In 1909, the petroleum industry could be described by two words – Standard Oil. The state of Ohio had previously sued the company over antitrust issues in 1892 and the company had separated out (but still controlled) the Ohio portion of its operations. And then a change in New Jersey incorporation law seemed to offer the perfect solution. Standard Oil established itself in the state as a holding company with 41 major companies units and numerous subsidiaries from those. Standard Oil controlled 85 percent of the industry from the well head to the end user.
As we noted in our 95th Anniversary issue, in 1909 the petroleum industry itself was only 50 years old following the discovery and extraction of oil in Titusville, Pa., in 1859. Kerosene was king, and gasoline filled niche roles in the marketplace. Retailing usually involved the general store (where cheap lanterns and lamps were sold to promote kerosene consumption), and Standard Oil controlled 85 percent of the industry from the well head to the lantern.
The big product was kerosene for illumination, pushing out such past favorites as whale oil, which is still found mentioned in the earliest issues. In addition to that, petroleum was used as a lubricant in a variety of petroleum distillates found use in the chemical industry and as industrial solvents. Home heating and rail and maritime transportation largely still used coal.
Although there were numerous sources of domestic production and refining (the term “mom and pop” could easily be applied to many of these operations) there were few independent producers and refiners, and only 125 independent jobbers fighting for a level playing. Standard commonly leveraged its monopolistic position to stifle competition through supply control, infrastructure control and price fixing—both vertically and horizontally.
NPN arose in 1909 as the first serious publication to tell the independents’ side of the story, but with a premium on journalistic integrity. As the magazine’s first editor, Warren C. Platt, noted years later NPN was never the “organ” of the independents, or any other group, just the first independent magazine that dared to print news favorable to the independents and critical of Standard Oil.
The Gasoline Age – Almost
If you look through the first decade of NPN’s industry coverage, you are hard pressed to see anything significant concerning gasoline and diesel. There was a good reason for that since there were only about 300,000 automobiles on U.S. roads when Henry Ford's popular, reliable and affordable Model T was first marketed in late 1908. Ford sold a little over 14,000 Model Ts by the end of 1909, but standardization, and a focus on mass marketing and mass production, would see some 15 million sold by the time production ended in 1927. A revolution was underway, and other automakers soon followed Ford in industrial automation and price reduction. But it wasn’t there yet.
Only a handful of what could really be considered “gas stations” were in place to serve early motorists by 1909. Most gasoline was dispensed by a local general store shopkeeper who would fill a five-gallon can from a small shed behind the shop and then carry it out and pour it in the customer’s tank. In contrast, by 1929 there were over 121,513 and the general store was rapidly being displaced as the source of fuel.
Just who developed the first modern service station is open to debate. Standard of California claims to have established a station in Seattle in 1907 that consisted of a feed line from a main storage tank to a 13-gallon tank. Fuel was dispensed using a glass gauge with a valve controlling the hose and a variety of oils and lubricants were displayed and made available to the motoring public. However, Shell claims it was first when its Automobile Gasoline Co. built a series of stations in St. Louis in 1905.
However, the lack of a significant motor fuels market does not mean that NPN had trouble filling its pages. Taft, corruption, regulation and the fight against the Standard Oil monopoly were in full swing. The regulatory and court fights involve virtually every sector of the industry as it existed at the time, every state, the federal government and the independents and Standard Oil. Typical headlines for the first half of the decade include (just from one representative 24-page 1910 issue): “Fraud Charged In Standard’s Contracts With Ohio Producers;” “Chicago Oil Wagon Retailers Organized To Fight Laws And Standard Oil;” “Ohio Hearing Is Set On Motion To Squash Summons;” “U.S. Tries To Push Old Rebate Cases; Council Bars Out Independent Dealers But Lets Standard Stay;” “Congress Give Standard Oil Permission To Cross Land;” “Fears John D's Charities Might Shelter His Trust;” “Public Utilities Law For Ohio Gives Independents Protection.” Remarkably, there was still plenty of room in these issues to cover a variety of additional topics. Offered below are some of the highlights.
It's interesting to note that the concept of peak oil was alive and well in 1909. In NPN’s first issue Dr. David P. Day, an expert on petroleum for the U.S. Geological Survey noted that the United States would exhaust its domestic supply of oil by 1935. In a far-fetched, best-case scenario, he stated that reserves might be stretched to 1943. As a Day noted: "At present more petroleum is being produced than is necessary for the legitimate demands of the industry. Within 10 years the present petroleum fields cannot profitably produce enough for the legitimate requirements.”
He went on to add that petroleum should be saved for its essential uses, principally among these being lubrication.
The importance of public opinion where industry positions are concerned was fully appreciated in the earliest days. An article "As To Guarding Your Interests In The Press" discussed how companies like standard oil use professional media marketing departments to craft their messages and those opposed to the Standard needed to respond in like. Not coincidentally, NPN Magazine has ran similar articles in more recent years only this time focused on answering the questions of an angry public and ignorant media over why gasoline prices were what they were and the limited role petroleum marketers have in setting prices.
The potential speculation in the energy futures markets was recently a major news item, but such speculation was also in the news as early as 1909, in this case referencing a new field in Fairfield in Perry County Ohio. "Farming and other normal pursuits have been given up for plunging in oil stocks and wells. The whole countryside, from grandfather down the small grandson, scraping together its dollars and nickels to buy stocks of producing--mostly prospective producing--companies that now number more than a hundred, and while there are more than 400 companies in the southeastern Ohio district. When two or three (people) are gathered together, whether at home or on the street or lane, it's in the name of oil and stock dickers are prominently started. Every town boasts of a stock exchange and some of the two, while exchanges are springing into existence in the towns and villages around the field…”
Ida M Tarbell’s historic book "Standard Oil" was also covered in some detail. This book to helped expose the anti-competitive tactics used by Standard Oil under Rockefeller and was an important milestone in solidifying much of the public opinion against Standard.
The first major inkling in NPN that petroleum would become a far more prevalent fuel source came in 1909 is it covered the Navy conversion to fuel oil as a power source for its vessels.
The Green focus that is so prevalent today was also on the radar back in 1909, as one article discussed how the Indiana Refining Company was using a series of catch basins and booms to keep waste oil from polluting Elkhorn Creek to which, “…flows through a fine stock of farm district in Kentucky.”
1909 also saw the formation of the Independent Petroleum Marketers Association with 25 charter members to help fight for a "square deal." The Square Deal was actually the name of a specific program the organization pushed legislatively throughout the states to promote open competition. "It will fight for fair play, honest and just laws, no discrimination… .”, This new jobber organization complemented the National Petroleum Association which represented a more upstream prospective centered around refining and production.
Ethanol is much in the news lately, but NPN reported in 1909 on how the US geological survey found that alcohol will do the same work as gasoline in an engine. The higher octane rating was noted, but so was the decrease energy content as well as some increases in storage and handling safety concerns. It was noted that few ethanol-capable engines existed and that the cost of the field was higher than gasoline – which remain as issues today in the adoption of such products as E85.
The year 1910 also saw price plunge in the price of crude that was largely considered to be the work of Standard Oil price manipulation designed to damage Independent petroleum marketers. Standard’s operations overseas were also called into questions, as a variety of countries began to rebel against its heavy handed market controls. Overseas production controlled by Standard was also used as a tool to manipulate prices and hurt independent domestic producers.
And there were still a growing number of domestic producers. NPN’s pages were filled with the news of new gushers. Also receiving considerable coverage were the activities of both of the major petroleum associations as well as technical pieces looking at such subjects as the best oils to use with various types of machinery.
Then, as now, the industry is multigenerational. One article described the: “…youngest oil jobber in the business” a Mr. Albert Stoessel, 16 years old, representing the Stoessel oil works, Ottawa, Iowa at a meeting where his father could not attend.
“Furthermore permit us to say this is no phony youngster either, for Young Stossel is on the job and does business for the company,” NPN noted. “We are not ringing him in just because he's the son of his father and his father happens to be in the oil business. All the jobbers and refiners at the Louisville meeting will give evidence to Stossel, Jr., as being ‘there with the goods.’"
1911 - 1912
Gasoline began to receive more coverage in 1911, although nothing extraordinary. Refining processes were discussed as was the possibility of producing gasoline from natural gas, which was seen as a waste product at the time. Supplier ads began to promote the product offering slightly more aggressively and there was also greater coverage of automobile oil, such as an article describing some ways to advertise motor oil.
The article highlighted how the industry was still very local and the advertising must take into account the circulation of automobile-user focused magazine. It noted that such magazines might actually cover several states and that an Ohio oil jobber or might not get a lot of mileage out of a magazine that also covered Indiana and Illinois. The suggestion was that localized newspaper advertising was more effective.
More significantly in this area, was the increased coverage of oil used to improve the transportation infrastructure either in the form of asphalt, or more commonly oil sprayed on roads to reduce dust. As one article noted: “…a big demand for road oils is unquestionably right at hand. Is it big in comparison with what has already been, which has been large in comparison with the past year. The automobile has forced the country's poor roads to the front and they (autoist – sic) is not noted for the lack of restraint when it comes to protesting. Hence his agitation for good roads has finally resulted in ransom to get results. The American Automobile Association is now spending much more time and money in a national campaign for good roads.”
In 1911 the independents finally attained victory over Standard Oil. The U.S. Supreme Court broke up Standard Oil into 33 separate units and competition was assured, which was good news, not just for the independent “oil men” but for the nation.
Historical pundits have argued about the relative merits and disadvantages of Standard Oil.
On the one hand, a unifying force was likely necessary to bring the chaotic wildcat oil industry and to focus and develop the basic infrastructures required to bring product to market. and prepared to meet the needs of the motor fuels market that was about to explode. On the other hand, having created this organized but top heavy and bureaucratic infrastructure, the ability of Standard Oil to react rapidly and dynamically to the enormous and dynamic change that was about to occur can legitimately be questioned. And, there is no question that the Standard’s business practices that were at their core opposed to the free market capitalism America has prided itself on since its founding.
NPN coverage of that milestone event was somewhat subdued and modest in comparison to the coverage of Standard Oil in the run-up to the decision. It was as if, with that problem solved, it was time to move on to bigger and better things for the industry. And there was room for some criticism that might ring familiar today: “Notwithstanding the feeling of pleasure and relief that the final throttling of Standard Oil in its present form, that came to most ordinary folks Monday afternoon, May 15, the voter of moderate means certainly was not well impressed with the dallying of the Supreme Court over its job until after the stock markets closed, nor with the court’s reading into the Sherman Anti-Trust law the qualification "unreasonable" as limiting violations under the act.
It is inspiring to have the United States Supreme Court stick close to the main points brought out against Standard Oil in the government's long prosecution; it is gratifying that the court did not "fall" for all the lines of "con" the Standard and its mouthpieces have been handing out, but it's extremely unfortunate that the court did not stand up to do its job like real men to put the decision over as it does all ordinary decisions, whether Morgan, Rockefeller et al in Wall Street would like it or not. The court probably figured that the regular crowd of professionals and Wall Street would seize on the decision to start something for profit for themselves and that the innocent public would get bit. Every "panic" that Wall Street causes brings Wall Street and all it represents that much nearer to regulation by the public. Why should the court concern itself with the proclivities of "the street” to play the fool?”
The December 1911 issue of NPN saw the magazine's first significant coverage of the diesel engine in an article titled: world adopts new oil engine that "fires" without a spark. The article focused on the use of the Internet maritime applications particularly submarines. That would be of critical importance to years later as World War I took force in German submarines powered by diesel engines became the scourge of the shipping lanes. It's another example of how quickly technology was advancing at this point in time.
The 1912 bound issues could not be located, though the coverage was likely similar to that found in 1911 and 1913.
While it’s clear that the petroleum industry was still in its infancy in 1913, already there were postulations of abandoning crude oil energy sources. An article appearing in the NPN June 1913 issue entitled “How Gasoline Will Be ‘Manufactured’ Some Day” is a very early call for renewable energy. In it, a chemist suggests gasoline will have to be made in a lab by taking hydrogen from water and carbon from another substance and mixing them together. The article’s opening line could have been written last year, “We are confronted in the not far distant future, so the gradually rising prices would seem to indicate, with a gasoline famine.”
During 1914, war broke out in Europe, which is commented on in the article “War Causes Standard to Cut off Gulf and Texas” appearing in the August NPN of this year. The article indicates that Standard Oil had cut its deliveries of oil because of the “interruption in foreign commerce, resulting from the war situation in Europe.”
Also, NPN published articles detailing the early developments of the service station, such as the September 1914 piece entitled “What’s Required To Operate A Filling Station.” The write-up indicates that “at least twenty” gas stations exist in Cleveland, Ohio. It goes on to list the equipment needed to operate a station including: “One five-gallon filling pump with automatic meter…Filling hose (generally gasoline-resisting rubber hose and sometimes flexible metallic tubing).”
This is perhaps the milestone year for the ascension of motor fuels in the petroleum industry. The continued rise of the Model T and the increased mechanization of the war years — both at home and abroad — had reached a tipping point. In the latter part of 1915 motor fuels and the ancillary areas that go with motor fuel marketing and retailing began to see notably increased coverage in NPN on both the editorial and advertising sides of the business. This trend expanded dramatically to become clearly the dominant NPN focus by 1918 and thereafter.
A modern comparison might be the speed at which the Internet, and specifically the Web, emerged from obscurity in the mid 1990s to become in a few short years the dominant communications infrastructure it is today.
As the retail petroleum industry was growing in 1915, NPN published articles listing “Tips For Improving Service At Auto Gas Filling Stations.” Among the list are pieces of advice still in use today—other ideas have gone the way of the dodo bird:
- Have attendants keep clean and neatly clothed.
- Make station buildings attractive in appearance.
- Keep drives clean, start grass growing in the yard.
- Remove unsightly advertisements.
- Give customers such prompt service that the driver will not have to get out of his car.
- See that every car is supplied with air or water.
- Have attendants who can give information as to roads and directions.
- Ask customers to call again as they are leaving.
- Visit auto owners in neighborhood and urge them to use your station.
- Keep auto supplies handled in your stations limited to prevent attendants being called on to do repair work.
- Have wrenches handy for every style of tank cap.
During the early days of petroleum retail, gas was sold from a variety of locations. One standard type of “gas station,” especially for independents, was curbside filling stations. In a March 1915 article, entitled “Cincinnati Gives Hard Filling Station Problem: Garage Men Abuse Curb Outfits—Now Standard Oil Turns To Drive-In Stations,” NPN addresses the conception and development of the type of “drive-in” station that is found in the modern landscape.
Another article published in the October 1915 edition declares “New York Auto Filling Stations Lack Style.” It goes on to say “New York, where good looks and a ‘front’ are supposed to be all necessary—has the fewest and the poorest looking automobile filling stations of any city in the country.” Some might say the first part of the sentence still holds true, but perhaps not the second half.
In the January 1916 issue of NPN, the article “Uniforms For Service Station Attendants” features a variety of uniform outfits, each appropriate for different types of weather conditions. “Putting service station attendants in uniforms is the next logical step for the oil companies operating chains of auto service stations,” the article states. Later in the year, a June piece entitled “Urge Uniforming of Station Attendants” proposes that the impression made by attendants’ uniforms on the public is “worth more than their cost.”
Also during this time, accurately measuring gasoline became an issue for petroleum retailers, as addressed in the June 1916 NPN article “Devise Simple Method for Measuring Gasoline.” This piece describes a “pasteboard” attached to the gauge glass on a tank. “The pasteboard, attached to the scale by a moveable clamp, is the gasoline measuring scale, graduated in gallons from 1 to 15, and reading from the top down.” The top story in the November 1916 NPN issue is “Issues False Report On Gasoline Pumps,” which discusses the harm the U.S Bureau of Standards caused when it declared 82 percent of the gasoline pumps in the city of Chicago were shorting customers.
In April of 1917, the U.S. entered World War I, but an NPN article published in February was already citing several major players in the petroleum business who forecasted American entry into the conflict would boost the oil industry. The June 1917 article, “Oil Companies Rally To Support Of Nation,” lists some of the voluntary enlistments from the industry and how oil companies bought bonds and even plowed land to raise food.
One article during this year indicates the petroleum industry was breaking new ground in terms of gender barriers. In the August issue, “Use Girls As Service Station Attendants” appears and cites companies, such as Sinclair, who say women employees “are quicker and neater than men.”
In that same August issue, another story, “Spend Money Now On Service Stations,” tells how big oil companies begin to invest in “elaborate and expensive stations,” which emphasizes that selling gasoline was becoming a bigger business. In later 1917 issues, other articles start to appear more frequently about the design of service stations, such as stories discussing the use of lighting to attract business at night as well how some California stations use landscaping to beautify their locations.
While World War I still raged over in Europe, NPN addressed its presence with several articles about petroleum industry men going overseas to serve. However, the business of selling gasoline was still growing, and an article appearing in the June 1918 issue documents how this lack of manpower was being filled—by women. The article “Riverside Trains Girls to Take Drafted Men’s Places” discusses that “girl filling station attendants have ceased to be a novelty and have become an institution in the oil business during the past few months.” It goes on to say that an oil company named Riverside began training women to take the places of men in their offices.
The effects of WWI were also evident in pieces addressing the issue of supply as the war effort drove up the demand for gasoline. Articles appeared on how to increase efficiency at refineries as well as special sections entitled “Conservation That Will Win the War,” with features on what was being done, by both oil companies and typical citizens, to cut down on the amount of gasoline being used.
World War I was the first mechanized war with the internal combustion engine playing a significant role. Trucks began to eclipse the horse and wagon behind the lines, and new petroleum-fueled weapons – tanks, planes and submarines – that would eventually define modern war first saw action. The oil industry in the United States helped keep the pistons moving.
Although the war had ended by 1919, its effects were still felt in the petroleum industry. This was specifically noted in an NPN article entitled “A Higher Motor Fuel Market Must Come To Offset Losses On Fuel Oil,” which discusses the need for higher gasoline prices to compensate for the demand drop off following the end of the war. The piece states independent refiners have to “readjust themselves to peace time conditions and recover from the severe jolt administered to them when war time industries were suddenly shut down and contracts for millions of barrels of fuel were canceled following the signing of the armistice in November.”
While true short term, World War I would ultimately lead to the enormous expansion of the industry as America itself quickly mechanized.
The war had, to some extent, put the country on the move. As a popular song of the day stated, “How 'ya gonna keep 'em down on the farm… After they've seen Paree?” For millions of Americans home from the war or dislocated through factory work – you couldn’t. In 1919 there were 7.6 million registered automobiles on the road. By 1929 the number grew to 26.5 million. The Model T continued its leadership role in sales, with a new one going for $265 in 1924 and a used one for as little as $25.
When it entered the war in 1917, NPN editorialized strongly for the creation of a central administrative body to help unify oil production during war. President Woodrow Wilson was sold on the idea, and the Petroleum War Service Committee was created. This eventually became today's American Petroleum Institute. The NPN article in 1919 stated the organization’s purpose is to “give every branch of the industry and every section of oil producing, refining and marketing territory in the country a fair representation.” This establishment marks the petroleum industry’s importance and growth that would carry over into the next decade and beyond.