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How Yale Launched the Oil Economy

To the Seneca Indians of northwestern Pennsylvania, it was a salve and a tonic. To most European Americans of the mid-nineteenth century, it was “rock oil,” an odd and mysterious grease that came from the ground. To Samuel Kier, a druggist and salt merchant from Pittsburgh, it was a contaminant of the wells his family drilled to tap underground brine deposits. But then he started trying to turn a profit from it. Eventually, Kier set off a chain of entrepreneurial connections that ended up introducing crude oil into the laboratory of Yale chemist Benjamin Silliman Jr.—who would extract and refine some of the multiple products that have made petroleum both an engine and an Achilles' heel of the modern U.S. economy.


A barrel of “thick, evil-smelling liquid” arrived at the Yale Analytical Laboratory.

Kier’s first attempt to make money from oil was ordinary quackery: he bottled the stuff and trumpeted its “wonderful curative powers.” But he also developed a crude method of distilling petroleum into an illuminant. The primitive fuel caught the attention of George Bissell, an itinerant Dartmouth graduate who was traveling through Pennsylvania.

Bissell decided to seek backing for an oil company. In the fall of 1854, he was staying at New Haven’s Tontine Hotel, the regional center of business and political networking. His faith in the commercial potential of petroleum captured the interest of a young New Haven banker named James M. Townsend.

Townsend did not want to risk investing in the new venture without expert advice. He consulted Benjamin Silliman Jr., an 1837 Yale graduate and scientist. Though Silliman Jr. never completely emerged from the shadow of his father and namesake—an illustrious Yale professor who in the early 1800s had pioneered chemistry, geology, and science education—he had a distinguished career in applied chemistry and a flair for the entrepreneurial.

For a consulting fee of $526.08, Silliman Jr. agreed to perform some tests. Shortly, as chemical engineering professor Barnett F. Dodge recalled it in 1955, a barrel of “thick, evil-smelling, dark, and faintly blueish-green liquid” arrived at the Yale Analytical Laboratory. Working through the winter months, Silliman Jr. eventually perfected a technique that came to be called “fractional distillation”—a way to separate crude oil into its many component parts. He refined a dozen products, including kerosene, paraffin, various lubricants, and gasoline. He also invented one of the first “modern” petroleum lamps.

In April 1855, Silliman Jr. presented his “Report on the Rock Oil, or Petroleum from Venango Co., Pennsylvania, with Special Reference to its Use for Illumination and Other Purposes” to Bissell and Townsend. “It appears to me,” he wrote, “that there is much ground for encouragement in the belief that your company have in their possession a raw material from which, by a simple and not expensive process, they may manufacture very valuable products.”


The oil sold for 80 cents a gallon at the well and $1.00 transported.

On September 18, 1855, the Pennsylvania Rock Oil Company (later renamed the Seneca Oil Company) was formed in New Haven. Capital of $300,000 in 12,000 shares was subscribed. Bissell had seen the salt-well drilling rigs on a label for Kier’s patent medicine, and in 1856 he had the idea that a similar apparatus might be used to drill for oil. Three years later, near Titusville, Pennsylvania, they struck oil.

The oil sold for 80 cents a gallon at the well and $1.00 transported, and the well yielded 500 gallons a day. The local paper proclaimed: “To New Haven, and citizens of New Haven belongs the credit of the discovery and development of this, one of the greatest wonders of the nineteenth century.”

The oil rush was on. Hundreds of drillers quickly hit black gold. But the technology for large-scale storage had not yet been developed, and in the ensuing oil glut, the price of crude fell to 30 cents a gallon. In 1864, the Seneca Oil Co. went out of business.

Silliman Jr. had been an investor as well as a consultant, and he lost $400 when the company went under. But it was a minor bump in a career that continued to flourish. He had been appointed professor of general and applied chemistry in 1854, after his father retired. He was well known in New Haven for helping to establish gaslight and steam heat companies locally. In addition, he was nationally known as a mining consultant who performed analyses of coal, iron, copper, silver, and gold.

Silliman Jr.’s combination of academic and commercial interests was relatively unusual, even suspect, at the time, and some questioned his scientific objectivity. But in other circles, he was honored. Fifty years ago, the American Petroleum Institute donated a bronze plaque that now hangs on the first floor of Sterling Chemistry Laboratory. The plaque lauded both Silliman Jr.’s science and his “Detailed and Optimistic Report” that led to “the Founding of the Modern Petroleum Industry.”  the end


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