So, understandably curious I did a quick search and found a number of articles on the web verifying what was mentioned on the program last night. Essentially, Rockefeller via his Standard Oil Company reduced the cost of kerosene, from 59 cents per gallon in 1865 to about 7 cents a gallon in 1895, while improving its quality. Keep in mind this is during the period when he had a virtual monopoly (about 90% control) of oil refining in the United States. So much for monopolies driving up prices and reducing quality.
How did this save the whales? In the 19th century, one of the biggest (if not the biggest) driver of whaling was the need for whale oil which was the primary fuel used for lighting in western nations. In 1856 the price of whale oil reached its peak of $1.77 per gallon, making it vastly too expensive for the average person to use, essentially reducing productive hours to daylight.
It was about this time, a few years earlier in fact, a geologist named Dr. Abraham Gesner developed a method of distilling kerosene from petroleum, which was then considered a nuisance. His kerosene was cheaper than whale oil and burned longer and could be used in existing lamps. This improved the quality of life immensely for the average person.
As Rockefeller pushed the price of kerosene down even further, the demand for whale oil disappeared. In the 1840's the United States alone had more than 700 whalers but by the 1870's that number had drop to less than 40, due in large part to the impact of cheap kerosene. Oddly, it was fashion that helped enable whaling to limp along for a few more decades as the demand for whale bone for corsets and the like allowed whaling to continue to be somewhat profitable. This finally ended when spring steel replaced whale bone for these uses. The last US whaler set sail in 1924 and promptly ran aground.
The source of the bulk of the information for this post came from an article in the Freeman titled "How Capitalism Saved the Whales." It is definitely worth reading as it covers a lot more than I did here.
One quote in particular jumped out at me and I think is something people need to consider when they discuss the role of government intervention in business:
If the government fosters an atmosphere in which innovation and profit making potential are subject to whims of bureaucrats, lawyers and politicians, and not based in the abilities of creative people to find innovative solutions to public needs, innovators will not set their minds to the task, and no state whip can force them to do so.One other interesting note towards the end of the article was the fact that many lakes in Pennsylvania were restored as oil drilling removed naturally occurring petroleum leaks that were polluting them. Makes me wonder if we'll see something similar with hydraulic fracturing?
You can find another article about this topic here.