The Oil Industry

Abstract

The modern oil industry began in 1859 with Edwin Drake’s discovery of oil at Titusville, Pennsylvania. Since then, this dynamic industry has experienced dramatic episodes of growth, aggressive competition for market share, various forms of corporate organization and cartel-like agreements, and governmental efforts at regulation and control, as well as monopoly, mergers, and consolidation. The history of the oil industry reflects its capital-intensive nature. Immense sums of money are spent on oil discovery, production, and refining projects. Marketing, transportation, and distribution systems likewise require enormous amounts of financing and logistical planning. Although oil is often produced in conjunction with, or in wells pressurized by, natural gas, the oil industry is distinct from the related natural gas industry. Since its origins in the mid-19th century, the oil industry has developed an industrial structure that emphasizes scale and scope to maximize profits. Profits can be huge, which attracts entrepreneurial efforts on individual, corporate, and national scales. By the late 20th through early 21st century, the oil industry had begun confronting questions about long-term viability, combined with an increasingly influential environmental movement that seeks to reduce fossil fuel consumption and prevent its toxic waste and by-products from polluting human, animal habitats, and natural habitats.