Throughout human history, before the modern history of the oil and gas industry even begins, energy has been a key enabler of living standards.
To survive in the agrarian era, people burned wood for warmth and cooking. In addition to use as a building material, wood remained the chief global fuel for centuries.
The invention of the first modern steam engine, at the beginning of the 18th century, heralded the transformation from an agrarian to an industrial economy.
Steam engines could be powered by either wood or coal, but coal quickly became the preferred fuel and it enabled massive growth in the scale of industrialization.
A half-ton of coal produced four times as much energy as the same amount of wood and was cheaper to produce and, despite its bulk, easier to distribute.
Coal-fired steam locomotives dramatically reduced the time and cost of inland transportation, while steamships traversed oceans. Machines powered by coal enabled breakthroughs in productivity while reducing physical toil.
With the dawn of the 20th century, environmental concerns and new technologies led to another energy source shift from coal to oil.
Interestingly, although women were not yet allowed to vote, ladies’ societies in the United States were instrumental in lobbying for laws to improve air quality and reduce the dense smoke caused by burning coal.
The first oil had actually been discovered by the Chinese in 600 B.C. and transported in pipelines made from bamboo.
However, Colonel Drake’s heralded discovery of oil in Pennsylvania in 1859 and the Spindletop discovery in Texas in 1901 set the stage for the new oil economy.
Petroleum was much more adaptable and flexible than coal. Additionally, the kerosene that was refined originally from crude provided a reliable and relatively inexpensive alternative to “coal-oils” and whale oil for fueling lamps.
Most of the other products were discarded.
With the technological breakthroughs of the 20th century, oil emerged as the preferred energy source. The key drivers of that transformation were the electric light bulb and the automobile.
Automobile ownership and demand for electricity grew exponentially and, with them, the demand for oil.
By 1919, gasoline sales exceeded those of kerosene. Oil-powered ships, trucks and tanks, and military airplanes in World War I proved the role of oil as not only a strategic energy source, but also a critical military asset.
Prior to the 1920s, the natural gas that was produced along with oil was burned (or flared) as a waste by-product. Eventually, gas began to be used as fuel for industrial and residential heating and power.
As its value was realized, natural gas became a prized product in its own right.
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