Oil and Ideology: The Cultural Creation of the American Petroleum Industry. (Book Reviews).

Oil and Ideology: The Cultural Creation of the American Petroleum Industry. By Roger M. Olien and Diana Davids Olien. Luther Hartwell Hodges Series on Business, Society, and the State. (Chapel Hill and London: University of North Carolina Press, c. 2000. Pp. [xx], 305. Paper, $18.95, ISBN 0-8078-4835-2; cloth, $49.95, ISBN 0-8078-2523-9.)

In the late nineteenth century manufactured gas illuminated streets, stores, and residences in larger U.S. cities, while natural gas remained an unwanted by-product of crude oil production that was allowed to escape into the atmosphere. As electricity began to supplant gas for lighting in the 1880s, gas companies competed for heating and cooking markets. By the end of the 1920s reckless competition, the discovery of massive southwestern natural gas fields, and technological advancements in long-distance pipeline construction led to consolidations and mergers of gas and electric firms into large public utility holding companies. A lengthy Federal Trade Commission investigation and the antibusiness sentiment of the Great Depression years prompted Congress to enact regulatory measures like the Public Utility Holding Company Act of 1935, which, as described by Christopher Castaneda in his new book, "mandated [the] abolition of massive public utility holding companies," replacing them with "single, locally managed, integrated systems; it also required utilities to separate their natural gas and electric operations" (pp. 109-10).

World War II spurred natural gas demand, and federally financed "war emergency pipelines" for oil ultimately "became instrumental" in making Gulf Coast gas fields accessible to northeastern industries (p. 133). After the war, the construction of a nationwide network of pipelines connecting gas reserves to most of the nation's major urban areas helped natural gas supplant manufactured gas. Ample supplies prevailed until wellhead price controls and other regulations discouraged exploration and production, resulting in natural gas shortages by the early 1970s. In the wake of industry deregulation (and the failure of synthetic gas development), however, natural gas shortages disappeared by the early 1980s.

The shortages of the 1970s had both underscored how national gas supplies responded to federal regulatory policies and increased Americans' awareness of energy conservation. An unintended consequence of natural gas deregulation was the 1990s reemergence of public utility combines through mergers and acquisitions, such as Enron Corporation; in some respects, these corporations are a throwback to the large public utility holding companies that dominated the industry in the 1920s and 1930s.

Despite an impressive array of secondary research, Castaneda's book suffers from a dearth of primary sources from major business and legal institutions; more firsthand perspectives of industry movers and shakers might have improved his analysis. The author also fails to place the gas industry and public utility holding companies within the relevant historiography of business and technology. Nor does he consider the gas industry within the context of laws that sanction monopolies when they are deemed economically beneficial yet prohibit them when they are viewed as counterproductive (as in the present-day Microsoft case). These shortcomings notwithstanding, Castaneda has masterfully deciphered a highly complex and technical subject, resulting in a clear, concise, and easily comprehensible history of manufactured and natural gas in America--an excellent resource for interested lay and professional audiences.

In their book on the American petroleum industry, Roger and Diana Oliens illustrate how an ideology grounded in preindustrial Jeffersonian agrarian ideals and reinforced by Progressive diatribes against monopoly and great accumulations of wealth shaped perceptions of the emergent oil business. Journalists, politicians, policy makers, and professional academic social scientists framed a "moral discourse" (p. xiv) to rally public opinion against the sins allegedly committed by a petroleum industry that was personified by John D. Rockefeller and Standard Oil. They crusaded for antitrust prosecutions and a regulatory state to save the nation from the tentacles of the Standard Oil "octopus" that corrupted government, the legal system, and the public welfare. But the Oliens argue that in a larger context Standard Oil "[came] to stand for a wider range of problems and anxieties that Americans of the time experienced in response to economic growth and social change--fears of the great wealth corrupting democracy, of irresponsible riches creating social tensions, and of increasing wage employment destroying manly independence" (p. 253).

Such fears were used as justifications for increased regulatory action in the Progressive era, culminating in Standard Oil's dissolution under antitrust law in 1911. About this same time public discourse on the petroleum industry also began to include a conservationist ethic concerning the vital, non-replenishable natural resource. Later, even as federal regulators and oilmen cooperated in an "uneasy partnership" to win World War II, "antimonopoly discourse ... dominated public discussion of the petroleum industry" during the final Roosevelt administration (p. 256)--and afterwards, the Oliens hint, although they end their study at 1945.

The Oliens offer a fresh and valuable contribution to the historiography of the American petroleum industry by illustrating how the media framed a discourse that, no matter how distorted, shaped the ideology and actions of both the public and policy makers. It is an important reminder of the power of the media to influence opinion and shape events. The book also provides insight for contemporary Americans who, like their late-nineteenth- and early-twentieth-century counterparts, struggle to cope with tensions wrought by rapid social changes induced by computer technology.

However, like most laypersons, the authors downplay the impact of law, thus missing an opportunity to illustrate how ideology shaped the decisions of judges, who often had the final word on critical issues shaping politics, economics, and society. Legal concepts like the rule of capture, prorationing, and antitrust, which lay at the heart of the petroleum industry's woes, had to pass judicial muster. The Oliens do point out correctly that "the Court tied its [1911 Standard Oil] judgment to common-law tradition, which regarded the deliberate construction of barriers to entry of new competitors as monopolistic behavior"; and, in doing so on these grounds, the justices "defended traditional and conservative values" (p. 113). Similarly, later judges would wield the power of judicial review to shield capitalism and private property against what they perceived to be the ever encroaching tentacles of another "octopus"--the regulatory state.

NICHOLAS MALAVIS
Houston, Texas