Money  /  Origin Story

Oil Barrels Aren't Real Anymore

Once a cask that held crude, the oil barrel is now mostly an economic concept.
John Messina/National Archives and Records Administration

The oil barrel almost didn’t survive the 19th century. Oil companies hated them: Barrels were leaky, costly, and cumbersome. But they were also necessary. When the first Pennsylvania wells began gushing in the late 1850s, prospectors scrambled to catch the erupting crude. Any container would do—whiskey or ale jugs, salt or turpentine vats. The best option was an old one: the casks still used today to age wines and whiskies. They dated to the Romans and Celts, who designed them to replace clay pots for moving wine and olive oil. In the first Pennsylvania oil fields, demand for those barrels rose so quickly that at times their price exceeded the value of oil itself.

The first oil barrels held between 31.5 and 45 gallons, but Pennsylvania producers settled on a common standard by the late 1860s. They based their new system on another old-world model. In 1482, King Edward IV had moved to eliminate shady dealing in the English herring industry by imposing a 42-gallon standard on shipping containers. Oil companies promised similar market consistency with an added bonus. They would sell oil in 40-gallon units, but buyers would also get “an allowance of two gallons” as a measure of good faith. The measurement stuck.

The barrel requirement was hard to solve. John D. Rockefeller fought the battle on multiple fronts. If Standard Oil had to use barrels, it would do it on the cheap. Barrel manufacturing became part of the oil monopoly—one tentacle of Rockefeller’s octopoid oil empire, as an editorial cartoon of the era cast his business. To cut prices, Standard cut trees, and acres of oaks became stacks of barrels. By the 20th century, Standard had developed steel containers that eliminated the need for trees (and Rockefeller made another fortune selling iron ore to steel plants). But the basic problems remained: The barrels were still hard to move, and Standard’s mass-produced steel ones had worse seals, meaning more leaks.

Standard and its competitors wanted to eliminate the barrels altogether. They developed railway tanks to replace barrel-filled boxcars and sent horse-drawn kegs to distribute kerosene to local retailers. Water transport was desirable but inefficient, because the barrels were so heavy (and leaky). But in the early 1870s, small tanker boats made shipment by river possible without barrels. 

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