History of Oil and Gas Industry
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Questions and Answers

What was John D. Rockefeller's vision for Standard Oil?

  • To diversify into alternative energy sources.
  • To focus solely on refining oil into gasoline.
  • To control the entire oil production process from extraction to sale. (correct)
  • To support independent oil producers exclusively.

What percentage of the world's refining capacity did Standard Oil own by the 1890s?

  • 50%
  • 100%
  • 75%
  • 90% (correct)

What technology did Henry Ford exploit to revolutionize car production?

  • Automatic transmission.
  • The assembly line. (correct)
  • Electric starters.
  • Hydraulic lifts.

What major action was taken against Standard Oil in the early 20th century?

<p>It was forced to break up into smaller components. (B)</p> Signup and view all the answers

How did the rise of internal combustion engines influence oil as a commodity?

<p>It increased the importance of gasoline in refining. (C)</p> Signup and view all the answers

What aspect of production was transformed by Ford's implementation of the assembly line?

<p>The need for skilled craftsmen decreased. (D)</p> Signup and view all the answers

Which of the following was a significant consequence of Standard Oil's dominance in the oil industry?

<p>Public and governmental concern over its monopoly. (A)</p> Signup and view all the answers

What was the primary fuel utilized in the early internal combustion engines?

<p>Gasoline. (C)</p> Signup and view all the answers

What was the initial limitation of the internal combustion engine vehicle developed by Karl Benz?

<p>It required a fuel source that was not widely available. (A)</p> Signup and view all the answers

Which factor contributed to the need for a network of fueling stations for internal combustion engine vehicles?

<p>Limited availability of gasoline at the time. (B)</p> Signup and view all the answers

What was William Knox Darcy's goal in the Middle East?

<p>To establish a monopoly on oil extraction. (D)</p> Signup and view all the answers

How did British Petroleum gain its monopoly power in the Middle East?

<p>By being granted permission by the British government. (B)</p> Signup and view all the answers

What was one significant implication of Darcy's control over oil extraction in the Middle East?

<p>It reduced competition among local businesses. (C)</p> Signup and view all the answers

What legacy did John D. Rockefeller leave in the oil industry?

<p>He established a successful oil monopoly with Standard Oil. (D)</p> Signup and view all the answers

How did the development of internal combustion engines alter transportation?

<p>It enabled personal and commercial vehicles to become widely used. (C)</p> Signup and view all the answers

What aspect of oil production remains significant today, as indicated by its historical context?

<p>Its role in political power and international relations. (C)</p> Signup and view all the answers

What significant action did OPEC take in 1973 in response to the Yom Kippur War?

<p>Reduced oil production and launched an embargo (C)</p> Signup and view all the answers

What primary challenge does a cartel like OPEC face to maintain its effectiveness?

<p>Internal discipline among its members (B)</p> Signup and view all the answers

What environmental concerns are associated with oil production and transportation?

<p>Air pollution from refineries and accidents (D)</p> Signup and view all the answers

How did OPEC's actions in the 1970s impact Western economies?

<p>Resulted in a decade-long recession (C)</p> Signup and view all the answers

What role does Imperial Oil play in the context of the Canadian oil industry?

<p>It was historically a part of Rockefeller's Standard Oil (D)</p> Signup and view all the answers

Which issue complicates the construction of pipelines for oil transportation?

<p>Indigenous land rights and property issues (A)</p> Signup and view all the answers

What is a common misconception regarding the control of oil prices by OPEC?

<p>OPEC has total control over global oil prices (D)</p> Signup and view all the answers

What is a key factor contributing to the complexity of the oil industry's political influence?

<p>Volatile prices affecting public policy and economies (D)</p> Signup and view all the answers

Flashcards

Standard Oil's Vision

Standard Oil aimed to control the entire oil production process, from extraction to retail sale.

Standard Oil's Dominance

By the 1890s, Standard Oil controlled over 90% of the world's oil refining capacity.

Government Intervention

The US government and public challenged Standard Oil's vast power.

Breakup of Standard Oil

The 20th-century breakup of Standard Oil divided the company into smaller units.

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Gasoline and Technology

Gasoline's use as fuel significantly advanced technology and transportation.

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Model T Impact

Henry Ford's Model T car changed car production and made cars more affordable.

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Assembly Line

Ford's assembly line standardized car production. Workers performed specific tasks efficiently.

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Internal Combustion Engine

The internal combustion engine was key to powering cars and other machinery. Fueled by gasoline.

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Gasoline's Role

Gasoline's emergence as a fuel source for internal combustion engines was crucial for the development and widespread adoption of automobiles.

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Early Automobile Dependence

Early cars relied heavily on readily available sources of gasoline, as the infrastructure for fuel distribution was not yet established.

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Gasoline's Political Impact

The rise of gasoline as a major fuel source also had significant political implications, as it led to the strategic control of oil resources.

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William Knox Darcy's Monopoly

William Knox Darcy, a British businessman, secured a monopoly on oil extraction in Persia (modern Iran), forming the foundation for British Petroleum.

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British Petroleum Origins

British Petroleum (BP) was formed by William Knox Darcy, with a monopoly granted by the British government, highlighting the colonial influence over oil resources.

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John D. Rockefeller's Control

John D. Rockefeller, an American businessman, established Standard Oil, a company that dominated the US oil industry through vertical integration.

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Standard Oil's Impact

Standard Oil's dominance over the oil industry had far-reaching consequences, shaping both technological advancements and economic power.

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The Influence of Oil

The development and control of oil resources had a profound impact on technological development, economic growth, and political power dynamics.

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OPEC's Goal

OPEC, a group of oil-producing nations, aimed to control global oil prices and access by limiting production and raising prices.

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OPEC's Impact

OPEC's oil embargo in 1973 significantly increased oil prices, leading to a global economic recession.

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Cartel Challenge

A cartel's success depends on member discipline. If one member breaks ranks, it can undermine the entire system.

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OPEC's Current Role

OPEC still exists and seeks to influence the global oil market but is no longer as powerful as in the 1970s.

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Environmental Impacts of Oil

Oil extraction, refining, transportation, and consumption all have significant environmental risks, including pollution and potential accidents.

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Oil & Land Issues

Oil pipelines and development often raise conflicts related to indigenous lands and property rights.

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Imperial Oil & Rockefeller

Imperial Oil, a major player in the Canadian oil industry, was once a branch of John D. Rockefeller's Standard Oil.

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Canadian Oil & Gas Industry

Canada has a significant oil and gas industry, with Imperial Oil being a major player.

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Study Notes

Oil and Gas Industry History

  • Oil and gas are critical components of modern economies
  • Gasoline is a relatively recent invention, not a major component in the late 1800s
  • Kerosene was an important early use of refined oil, used in lamps before electricity
  • Gasoline was initially a byproduct, difficult to stabilize and use
  • Internal combustion engines needed gasoline to operate
  • Karl Benz developed early automobiles using gasoline
  • Gasoline usage grew significantly with the development of automobiles
  • Auto production became more efficient with the assembly line, and prices dropped
  • Gasoline became strategic resource, influencing wars and global politics

Standard Oil and Rockefeller

  • John D. Rockefeller founded Standard Oil in the late 1800s
  • Standard Oil controlled 90% of US refining capacity in the 1890s
  • US courts forced Standard Oil to break up into smaller companies
  • This happened at the beginning of the 20th century
  • Standard Oil was a dominant force in the oil industry for many years

Automobiles and the Impact of Ford

  • Henry Ford developed the Model T, the most popular car worldwide.
  • Ford introduced the assembly line, greatly impacting car production and pricing
  • Wider access to automobiles created a demand for gasoline
  • Cars, roads, and gas stations were connected, and needed to be built to accommodate more cars
  • Auto production required huge investment to build the infrastructure.

British Petroleum and Colonialism

  • British Petroleum (BP) gained a monopoly on oil extraction in the Middle East
  • BP got this monopoly through British government agreement.
  • This was in part due to colonial influence over the region, not the native governments
  • BP became a global player in oil

Politics of Oil and OPEC

  • The Iranian government wanted more money for oil and royalties
  • This led to the Iranian government's overthrow by the CIA and British intelligence.
  • The organization of petroleum exporting countries (OPEC) tried to manage the world's oil in the 1970s/1980s.
  • They used a cartel (OPEC) tactic which controls oil distribution, resulting in global economic recession during the oil crisis.

Canadian Oil Industry

  • Imperial Oil, a major Canadian oil company, was a branch of Standard Oil.
  • The Canadian government recognized needs for a Canadian controlled oil company.
  • Petro-Canada was created to expand the nationalized oil industry.
  • The need for a Canadian oil company was spurred by the political and economic influence of American and other foreign countries.

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Week 11 Oil and Gas History PDF

Description

Explore the significant developments in the oil and gas industry, from kerosene's early use to the rise of gasoline as a crucial resource for automobiles. Delve into the impact of Standard Oil and John D. Rockefeller on the industry's evolution and its influence on global politics and economies.

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