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The Man who started the Oil Age couldn't Afford His Own Gravestone | Edwin Drake

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This is the tragic true story of Edwin Drake, the man who drilled the world's first commercial oil well in 1859 Pennsylvania. His discovery started the modern oil industry that powers our world today. But Drake never patented his method, made terrible business deals, and died in poverty in 1880.
Ironically, men like John D. Rockefeller becom billionaires using the industry Drake created, while Drake's family had to rely on donations for his gravestone.

In this video you'll learn:
How Edwin Drake discovered oil in Titusville, Pennsylvania
Why the father of the oil industry died broke
The dark side of the Industrial Revolution
How one invention changed the world forever

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Transcript
00:00In 1860, any farmer in America could make their own fuel.
00:04They had been doing it for decades with grain and copper stills.
00:07Alcohol burned in their lamps and heated their stoves.
00:10It would soon power engines that had not been invented yet.
00:13By 1862, that same fuel cost ten times what it had two years earlier.
00:18Not because the supply collapsed or the demand disappeared,
00:21because of a single tax passed during a war that nobody ever repealed.
00:25Within three years of that tax, a bookkeeper in Cleveland bought his first refinery.
00:30His name was John Rockefeller, and he was 25 years old.
00:34He was not replacing whale oil, despite what you were taught.
00:37He was replacing something far more dangerous to the people who would control energy.
00:41He was replacing a fuel that anyone with farmland could produce.
00:46You learned a story in school, and you probably heard it again in a documentary.
00:50The story says that before petroleum, America ran on whale oil.
00:54New Bedford, Massachusetts grew rich, harpooning leviathans across the Atlantic.
00:59Then Edwin Drake struck oil in Pennsylvania in 1859.
01:03Kerosene replaced whale oil, and the modern world began.
01:06It is a clean narrative with a satisfying arc.
01:09It is also fundamentally wrong.
01:11The largest fuel market in America before petroleum was not whale oil.
01:15It was something called campfine.
01:18Campfine was a blend of grain alcohol and turpentine.
01:21It burned cleanly in household lamps and cost about 50 cents per gallon.
01:25By 1860, American distilleries were producing roughly 90 million gallons of it per year.
01:31Let me put that number next to the one you were taught.
01:33The entire whale oil industry, at its peak, produced 15 to 18 million gallons.
01:39Campfine outsold whale oil by a factor of five.
01:43And unlike whale oil, which required three-year ocean voyages and massive capital investment,
01:48campfine could be made by a farmer with a copper still and a corn harvest.
01:53Your great-great-grandparents likely had the equipment sitting in their barn.
01:56This was not a niche curiosity.
01:58This was the dominant American fuel.
02:00You've never heard of it because someone made sure you would not.
02:03New Bedford, Massachusetts sits at the centre of the version you were taught.
02:07In 1857, it was the richest city per capita in the United States.
02:13329 whaling ships operated from its harbour.
02:1610,000 men worked in the industry.
02:18But whale oil was already losing ground to campfine before Drake ever picked up a drill bit.
02:23Whale oil cost more than a dollar per gallon.
02:25Campfine cost 50 cents.
02:27The whaling industry was not the future being disrupted by petroleum.
02:31It was the past being replaced by alcohol fuel.
02:33Petroleum simply arrived at the right moment to inherit what alcohol had already built.
02:38And then the tax made sure alcohol could never take it back.
02:42On August 27, 1859, Edwin Drake's drill hit oil at 69 and a half feet near Titusville, Pennsylvania.
02:50Kerosene refined from that crude oil entered a crowded fuel market.
02:54It was a decent product that burned brightly and stored well.
02:57But it was not dramatically cheaper or better than campfine.
03:00The two fuels were similarly priced and a gradual transition might have taken decades.
03:06It might never have happened at all.
03:08But three years after Drake's well, something intervened that was not a market force.
03:12In 1862, the union needed money.
03:15The civil war was draining the treasury at a catastrophic rate.
03:19Congress passed the Revenue Act, taxing everything lawmakers could think of.
03:23Liquor, tobacco, playing cards, gunpowder, feathers, telegrams, iron, leather and alcohol.
03:29The tax was $2.08 per gallon on all distilled spirits, regardless of intended use.
03:35It was meant for whiskey.
03:37The men who wrote it were not thinking about lamp fuel.
03:40But there was no exemption for industrial alcohol.
03:43None for fuel.
03:44None for the 90 million gallons of burning fluid that lit American homes.
03:49Overnight, campfine went from 50 cents a gallon to nearly five times that amount.
03:54Kerosene, meanwhile, was taxed at 10 cents.
03:5610 cents for petroleum.
03:58$2.08 for alcohol.
04:00That is not a free market choosing petroleum.
04:03That is a tax code choosing it.
04:04And the IRS commissioner himself, David A. Wells, acknowledged this in 1872.
04:09The tax, he wrote, had the effect of destroying the distillery industry.
04:13Happily, he added, it was replaced by petroleum.
04:16He said happily.
04:18As though it were luck and not legislation.
04:20Now, here is where I need to be honest with you about what this is and what it is not.
04:26Everything I have just described is an accident.
04:29Nobody in Congress in 1862 was scheming to hand the energy market to petroleum.
04:34The oil industry barely existed.
04:37Rockefeller had not yet touched a refinery.
04:39The tax was a wartime revenue measure with an unintended side effect.
04:43That is the strongest version of the counter-argument, and I take it seriously.
04:47If the story ended here, the mainstream explanation would hold.
04:51A coincidence.
04:52An accident of policy.
04:54These things happen.
04:55I spent two full days sitting with the Revenue Act debates and the Congressional record.
05:00I was searching for intent and found none.
05:02There was no petroleum lobby in 1862.
05:06There was no conspiracy.
05:07The tax was collateral damage from a war that killed 600,000 people.
05:12Nobody was thinking about lamp fuel.
05:14And for a while, that answer was enough.
05:16What was not enough was what happened next.
05:18The tax stayed.
05:20Not just during the war.
05:21Not just during Reconstruction.
05:23For 44 years.
05:25The Civil War ended in 1865.
05:28The income tax from that same Revenue Act was repealed in 1872.
05:32But the alcohol tax remained, quietly suffocating every fuel competitor to petroleum across four consecutive decades.
05:40And during those four decades, the petroleum industry consolidated in ways that made competition structurally impossible.
05:47In early 1872, John D. Rockefeller bought or bankrupted 22 of 26 competing refineries in Cleveland in just six weeks.
05:57The newspapers called it the Cleveland Massacre.
05:59By 1880, Standard Oil controlled 90% of all oil refining in the United States.
06:05By 1882, the Standard Oil Trust held 40 companies under a single board of nine trustees.
06:11This was not just a large corporation.
06:13This was an economic structure operating across state lines with more leverage than most governments.
06:18You could not buy kerosene in America without rooting money through Rockefeller's system.
06:22The journalist Ida Tarbell, whose own father had been ruined by Standard Oil's tactics, spent years documenting the railroad rebates
06:30and the predatory pricing.
06:32She'd watch Franklin Tarbell's independent oil business collapse under the weight of Rockefeller's secret freight agreements.
06:38Her rage was personal, but her reporting was meticulous.
06:41Her 19-part investigation in McClure's magazine helped trigger the Supreme Court's 1911 order to dissolve Standard Oil into 34
06:49companies.
06:50But the detail that rarely gets mentioned is this.
06:53Rockefeller emerged from the breakup as the majority shareholder in both Exxon and Mobile.
06:58The monopoly dissolved on paper.
07:00The wealth did not.
07:02In 1906, Theodore Roosevelt signed the Free Alcohol Act.
07:05For the first time in 44 years, industrial alcohol was untaxed in America.
07:10Ethanol could finally compete on price with gasoline.
07:14And for a brief, flickering moment, it did.
07:18Henry Ford publicly championed alcohol fuel throughout this period.
07:22In 1906, Ford experimented with running ordinary Ford cars on 160-proof alcohol.
07:29He reported results nearly equal to gasoline in power output.
07:33He told the New York Times in 1925 that ethanol was the fuel of the future.
07:37The fuel, he said, is going to come from fruit, from weeds, from sawdust, from almost anything.
07:43There is fuel in every bit of vegetable matter that can be fermented, he said.
07:47Ford was not making an abstract prediction.
07:50He was describing a world where energy production stayed distributed,
07:54where farmers grew their fuel alongside their food,
07:57where no single corporation could choke the supply chain.
08:00The petroleum industry understood exactly what that vision threatened.
08:04Then came prohibition.
08:06In 1920, the 18th Amendment banned the production, sale and transport of alcohol.
08:11Whatever its moral intentions, its economic effect on fuel was absolute.
08:16For 13 years, ethanol production was functionally eliminated from American life.
08:21Gasoline had no competitor during the most critical period of automobile adoption in history.
08:26Gas stations spread across the country while prohibition held.
08:29Cars were tuned exclusively for gasoline.
08:32Infrastructure hardened around a single fuel source.
08:35By the time prohibition ended in 1933,
08:38petroleum was so deeply embedded that ethanol could not begin to catch up.
08:42But the petroleum industry was not leaving anything to chance.
08:46After prohibition ended,
08:47the American Petroleum Institute launched a sustained campaign against ethanol blending.
08:52API lobbyists told Congress that ethanol incentives would harm both the oil and automobile industries.
08:58They argued it would reduce state tax revenue and create, in their words,
09:02a bootlegger atmosphere around fueling stations.
09:04Between 1933 and 1939,
09:07the oil industry helped block as many as 40 state and federal bills supporting alcohol fuel programs.
09:13An ethanol-gasoline blend called Agrol was actually sold at 2,000 stations across the Midwest.
09:19Its plant managers reported sabotage and bitter resistance from petroleum interests.
09:25By 1939, Agrol production shut down entirely.
09:29The market did not reject ethanol.
09:31The market was never allowed to consider it.
09:33In 1942, Senate committees investigating wartime rubber shortages uncovered something broader.
09:40The oil industry had been suppressing competition from alcohol-based industries for decades.
09:45Attorney General Thurmond Arnold confirmed that antitrust investigations into petroleum's influence
09:50over the alcohol fuel market had occurred repeatedly.
09:53Federal probes were conducted in the 1913-1920 period, again in the early 1920s, and between 1927 and 1936.
10:02The pattern was not hidden.
10:04It was documented in federal investigation files.
10:07It just never reached the public.
10:09And then came the streetcars.
10:12In 1936, a holding company called National City Lines began purchasing urban transit systems across the United States.
10:19Behind National City Lines stood General Motors, Standard Oil of California, Firestone Tire, Phillips Petroleum, and Mack Trucks.
10:28Between 1936 and 1950, they acquired electric streetcar systems in 45 cities.
10:34They ripped out tracks.
10:36They scrapped the trolleys.
10:37They replaced electric transit with diesel buses that required petroleum fuel and rubber tyres made by their own partners.
10:44In 1949, the federal government convicted them under the Sherman Antitrust Act.
10:49The corporate defendants were fined $5,000 each.
10:52The individual executives were fined $1.
10:54I need you to hold that number for a moment.
10:57$1 per executive.
10:59For dismantling the public transit infrastructure of 45 American cities.
11:05That dollar amount is the most honest price tag the American legal system has ever put on institutional capture.
11:11I want to lay the full sequence out plainly, because the timeline matters more than any single event within it.
11:171862. Congress taxes alcohol fuel into oblivion.
11:221870 through 1882.
11:24Rockefeller builds a petroleum monopoly with no fuel competition remaining.
11:291906.
11:30The alcohol tax is finally removed, and ethanol briefly competes again.
11:341920.
11:36Prohibition eliminates alcohol production for 13 years during peak automobile adoption.
11:411933.
11:42Prohibition ends, and the petroleum industry immediately lobbies against every ethanol bill.
11:481936 through 1950.
11:50Oil-backed corporations buy and scrap electric streetcar systems in 45 cities.
11:561949.
11:57Those corporations are convicted and fined $1 per executive.
12:00Each event has its own explanation.
12:04The 1862 tax-funded a war.
12:07Rockefeller was just efficient.
12:09Prohibition was a moral crusade.
12:11The streetcar systems were already in decline.
12:14Every explanation, taken individually, sounds reasonable.
12:17But when you arrange them across 90 years, a single conclusion forms.
12:21Every decentralized alternative to petroleum was removed.
12:25Not simultaneously.
12:26Not by a single architect.
12:27But removed, one at a time, until only petroleum remained.
12:32Meanwhile, across the Atlantic, a different reality existed.
12:36Germany never imposed a punitive tax on fuel alcohol the way America did.
12:40By 1902, the German market supported 95,000 alcohol-fueled stoves and 37,000 spirit lamps.
12:49France required gasoline importers to buy domestic alcohol fuel at a minimum of 10% of their imports.
12:54By 1938, over half of Germany's fuel came from non-petroleum sources.
12:59What if the 1862 Revenue Act had included one sentence exempting industrial alcohol from the tax?
13:06What if Congress had simply done what European governments did and treated fuel alcohol and drinking alcohol as different substances?
13:14The technology was already built.
13:16The distilleries were already running.
13:18The infrastructure existed in thousands of communities across America.
13:22All that was missing was a line in a tax bill that nobody in Washington thought to write.
13:27One sentence.
13:28That is the distance between the energy system you have and the one you might have had.
13:32You drive past gas stations every day without considering why they exist.
13:37You fill your tank with a substance pulled from beneath the earth, refined in centralized facilities distributed through pipelines controlled
13:44by a handful of corporations.
13:45You do this because every other auction was removed before you were born.
13:49The tax that started it was not aimed at you.
13:52The monopoly that cemented it was dissolved on paper over a century ago.
13:56The prohibition that sealed it ended before your grandparents reached adulthood.
14:01But the infrastructure those decisions created is the infrastructure you still depend on.
14:05The roads were paved for gasoline cars.
14:08The cities were redesigned after the streetcars were torn out.
14:11The fuel economy you inherited was not selected by consumers in a free market.
14:16It was shaped by a sequence of institutional decisions, each one defensible in isolation, that collectively eliminated every alternative.
14:24Edwin Drake, the man who started all of this, never profited from the world he made possible.
14:28He failed to patent his drilling method.
14:31He lost his savings in oil speculation by 1863.
14:34By the 1870s, he was destitute, moving between boarding houses in New Jersey and Vermont.
14:40Pennsylvania eventually granted him an annuity of $1,500 per year.
14:45When he died in 1880, his family could not afford a proper monument.
14:4921 years later, in 1901, an executive from Standard Oil paid for one.
14:54A bronze statue by sculptor Charles Henry Niehaus and a stone memorial at Woodlawn Cemetery in Titusville.
15:01The man who opened the door to the petroleum age could not pay for his own gravestone.
15:06The corporation that walked through that door built one for him.
15:09The fuel you will buy this week exists because of a wartime tax that outlived its war.
15:14A monopoly that outlived its own dissolution.
15:16A prohibition that outlived its stated moral purpose.
15:20And a transit system that was purchased specifically so it could be destroyed.
15:24No single villain.
15:26No master plan.
15:27Just a century of decisions, each one small enough to seem reasonable,
15:31all of them together large enough to reshape how a nation powers itself.
15:35And the fuel that any American farmer could have brewed in their own barn
15:39has not competed freely in this country since 1862.
15:43That is not a theory.
15:44It is a calendar.
15:45And the calendar does not require your belief to be true.
15:49It only asks you to consider who benefits when a nation forgets it ever had a choice.
15:53It is a calendar.
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