07-24-2020, 04:26 PM
(This post was last modified: 07-24-2020, 04:35 PM by 24redcrayons.)
EXPECTED READING TIME: 30 Minutes
FOREWORD: The time and effort it takes to get 104 guys out on a field, week after week, in cities all around the US is incredible. The amount of time, money, and resources that is used behind the scenes in order to pack, transport, and set up pads, benches, helmets, and other misc. equipment week after week is something that not many people think about. As I was considering the logistics behind a 14 game season, it became clear to me that while blood, sweat and tears are integral to success in the game of football, there was another liquid that is vital to any franchise. From generators running heat lamps in order to ensure that players stay warm on the sidelines to thousands of gallons of kerosene used to fuel planes, that vital liquid is gasoline. As the sheer scale of usage became clear to me, another question arose. Why gasoline? It's not the safest, and by far not the cleanest burning fuel source. As I searched for alternatives, one stood above the rest. Ethanol, or alcohol, seemed to be the only possible alternative. It was cheap, light, and many motors and engines that are in the vehicles and machines that teams rely on could easily switch over to ethanol, or at least some or of gasoline and alcohol blend. It seemed like a no brainer. Thus, my final question arose, the one that I truly seeked to understand. Why is it, that we as a league and as a nation, have chosen gasoline and petroleum derivatives over a seemingly superior fuel source, one that is cleaner, cheaper, and much easier to produce. This article will explore the reasons behind this through an analysis of national sentiment towards fuel, which is directly representative of the league in itself.
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On October 1st, 1908, the first Ford Model T rolled off the assembly line in Detroit, Michigan and propelled the US into a decades-long and complicated relationship with gasoline and fuel. Although the car was a remarkable feat of engineering, boasting a top speed of 45 miles per hour, the real gem was the inline four-cylinder engine under the hood, producing up to 20 horsepower, and most importantly, capable of running on both pure gasoline or a gasoline-alcohol blend, known as “gasohol.” With the twist of a silver knob, mounted to the right of the steering column, drivers could easily change fuel sources.
This work of human ingenuity was designed specifically with farmers in mind. Having grown up on a farm in Michigan, Henry Ford wanted to create new markets for farmers by promoting crops as not only fuel for humans, but also as fuel for cars and engines. This idea is still seen in Ford Motor Company’s products over a century later, with FlexFuel engines standard on their F-150 light pickup truck line. By modern day standards, gasohol and other alcohol-based fuels are superior to conventional gasoline. It is easily created from grains, tends to burn cleaner than gasoline, and provides fuel of a higher octane rating, which allows for the operation of larger and more powerful internal combustion engines without harmful premature detonation of the fuel-air mixture, colloquially known as “engine knock.” As such, the fact that gasoline is magnitudes more popular than gasohol is an anomaly. This paper will seek to explore the true motivations behind the actions of regulatory bodies through the lens of fuel and will seek to argue that alcohol and petroleum-based fuel regulation, production, and consumption in the US was largely driven by governmental perceptions of what the public wanted them to do rather than because of a moral obligation. This phenomenon will be explored largely through an analysis of widespread debates regarding gasohol and petroleum fuel, as well as of the cycles of popularity in petroleum- and alcohol-based fuels across the twentieth century.
The debate over fuel has been controversial ever since the mid 1800s when alcohol was discovered as a possible alternative to animal products as an energy source. The difference in effectiveness, as well as the long term economic impacts of petroleum-based versus alcohol-based fuels have both been explored heavily, with many studies coming to the conclusion that alcohol-based fuels are cleaner and provide fuel of a higher octane, but are less economically feasible. Articles such as one by R.S. Chambers titled “Gasohol: Does it or Doesn’t It Produce Positive Net Energy” and various policy simulations such as one created in 1980 by Ronald L. Meekhof speak to the abundance of scholarly debate about the concrete effects of gasohol versus conventional gasoline. However, one aspect of the fuel debate that has not been discussed heavily is the trajectory that the US took to its current state, one that heavily favors petroleum-based fuels over gasohol. One article tangentially related to this aspect is a 2014 article by Sei-Hill Kim in Journalism Studies, titled “Talking about biofuel in the news.” However, the article only seeks to separate media stories about biofuel into distinct groups, either a scientific issue, an economic issue, or a policy issue. The article also limits itself to media stories regarding fuel in the last two decades, and does not look at the earlier years of the fuel debate. By extending the view of this debate, a deeper understanding of the causes motivating governmental action can be uncovered.
From its conception to the present, the United States of America has long been infatuated with alcohol. As a major source of revenue and clean source of water for sailors, alcohol was and still is a major product of Puerto Rico and other tropical regions of the US. Although alcohol as a drink was big, its potential as a fuel source was just as large in the early 19th century. During the mid 1850s, alcohol was relatively popular at the time as a source of fuel for lights and lanterns. The popularity of alcohol was largely because it was a significantly cheaper alternative to the traditional whale oil and lard. However, this period of boom for alcohol as a fuel source was short-lived, as the advent of the Civil War led to the introduction of the Revenue Act of 1862 and the creation of the Bureau of Internal Revenue, known today as the Internal Revenue Service. The Revenue Act of 1862 required distillers of liquor to pay $50 per liquor license, equivalent to around $1,300 in 2019 dollars, and added an excise tax equivalent to 40 cents per gallon. These pieces of legislation, although intending to provide tax revenue for the Union in its war against the Confederate States of America, placed a huge burden on lower-class Americans and drove alcohol prices up exponentially. The enactment of this piece of legislation was timed perfectly with the discovery and commercialization of kerosene derived from petroleum as a fuel source. As such, the already small alcohol industry was further decimated, and petroleum boomed in popularity due to the incentives. This boom lasted much longer than the Civil War itself, and with the formation of Standard Oil in 1870 by John D. Rockefeller, the US had officially become dependent on petroleum, setting the stage for the first period of promotion for alcohol-based fuels and introducing the first set of major players: Standard Oil and the Theodore Roosevelt Administration.
Although the first petroleum boom essentially happened overnight, within two decades of the 1870 incorporation of Standard Oil, John D. Rockefeller had entrenched oil as the best source of fuel in the minds of Americans and benefitted heavily from that. In the twenty-seven years that Rockefeller ran Standard Oil and in the years after, during which he was the largest shareholder of Standard Oil Stock, Rockefeller had managed to monopolize the fuel industry as a whole, controlling 90% of all oil in the US at his peak and accounting for 2% of US GDP. The formation of one of the largest monopolies in history was not met well by the people, and public outrage began to mount. Furthermore, a series of exposés written by famous muckraker Ida Tarbell in McClure’s Magazine also gained traction with the public. The seemingly innocent title of the exposé, “The History of the Standard Oil Company,” did not belie the dark parts of Standard Oil that Tarbell wrote about. Specifically, chapter four of her exposé, titled “An Unholy Alliance,” talked about how Standard Oil strong armed independent regional oil refiners all around the US, claiming that when asked “What are you [Standard Oil] going to do with the men who prefer to run their own business?” regarding a proposed expansion by Standard Oil in the Pittsburgh area, a representative of the company replied laconically that they would “Go through them.” This public exposition of Standard Oil’s low-handed methods proved sufficient to sway the vast majority of public opinion against Standard Oil. As a result, in the months following Tarbell’s exposé, cities and towns in the way of Standard Oil’s expansion began to take concrete action.
Outraged by Tarbell’s works, the public and the media began a series of crusades against Standard Oil, culminating in a number lengthy legal battles all around the US. An article published in Daily Capital Journal in 1904 regarding the expansion of Standard Oil and its shady practices (titled “Kansas Strikes Oil: Opposes Transfers to the Big Octopus”), gives insight into general public attitudes towards the petroleum industry during this time. Specifically, it detailed how “The state of Kansas, with $400,000 and a stiff-backed population, has set about the task of fighting Standard Oil, with $400,000,000,000 and tentacles spreading all over the United States and foreign countries.” Such statements exemplify the extent to which public backlash towards Standard Oil had grown and the pressure that state and national legislators came under. In this case, the Kansas State Legislature ultimately passed six separate bills that limited Standard Oil’s power, as a result of physical revolts carried out by the population. This unanimous outcry by the public and resulting actions by legislators set off a series of chain reactions that ultimately proved to be fatal for Standard Oil. Newspapers all around the US began to cover various aspects of this issue, highlighted by the May 10th, 1906 issue of the Spokane Press, in which “E.M. Wilholt of Topeka, former Standard Oil agent, at the interstate commerce commission hearing today testified that the Standard Oil company order him to pay for information concerning competitors and that Standard Oil maintained an espionage system throughout the country.”
In two decades, the beginning of which was marked by an 1887 antitrust lawsuit filed by the State of Ohio, Standard Oil had been repeatedly reprimanded by state and federal courts, much to the delight of the American people, and had faced thirty-three separate antitrust lawsuits filed by ten states and the Oklahoma Territory. This confluence of events, resulting from the Tarbell exposés, the various court decisions against Standard Oil, and the sheer negative coverage surrounding the company began to spill out of the relatively rural areas that had been directly affected, and Standard Oil began to lose the hearts and minds of Americans all around the country, specifically those living in larger cities that had reaped benefits from Standard Oil’s operations. The billions of dollars made by Standard Oil in the rural Midwest since the late 1800s had largely been brought over and injected into the economies of major cities through the creation of refinery jobs, one example being the 1890 creation of the Standard Oil Whiting Refinery in Whiting, Indiana. Only seventeen miles from the heart of downtown Chicago, the Whiting Refinery provided 2,400 jobs and was the largest refinery in the US, accounting for 20% of Standard Oil’s refining capabilities at the time. The revenue generated by Standard Oil not only affected cities in the Midwest, but also had ramifications in the Northeast, shown through creation of a number of estates in the area by Rockefeller, such as the Lakewood Golf House Estate in Ocean County, New Jersey, which paid local builders and gardeners an above-average salary. As such, the public perception of Standard Oil in major cities and the Northeast before the Tarbell exposés were published was fairly mixed, with many still supporting Standard Oil due to the financial incentives it had provided. Even as late as 1907, newspapers in large cities, such as the New York Times, were still commending Standard Oil by noting “the extraordinary ability exhibited by the men who from the beginning have controlled the Standard Oil Company, an ability exhibited no less in retaining control of the industry within few hands than in building it up to its present vast proportions.” By realizing the level of complexity that was present in the relationship between Standard Oil and the more developed areas of the US, the emergence of public discourse in the Northeast becomes even more significant. The appearance of a 1911 antitrust lawsuit regarding Standard Oil and John D. Rockefeller was a monumental signal that the demands of the public had overwhelmed whatever financial benefits the company provided for the region. Indeed, it was this “betrayal” of Rockefeller and Standard Oil by the Supreme Court that proved to be the final act that led to its breakup. The majority opinion of the case, delivered by Chief Justice Edward D. White, was very much in line with the sentiments to the public, stating that “The combination of the defendants in this case is an unreasonable and undue restraint of trade in petroleum and its products moving in interstate commerce, and falls within the prohibitions of the act as so construed.” A deeper analysis of a New York Times article, published the day after the decision, gives further insight into the reactions of the public, describing the courtroom as having “breathed a sigh of relief at the final gratification of a nation-wide curiosity in regard to the fate of one of the most gigantic business organizations known in the world’s history.” The tone of the article, describing the “relief” that the public felt when Standard Oil was forced to dissolve, was a marked departure from the pro-Standard Oil stance taken by the New York Times in earlier years and evidenced the shift of public perception in major cities and the Northeast as discussed earlier. As such, without the emergence of public dissent towards Standard Oil in areas that had previously been ambiguous about this issue and the ubiquity of negative public perception all around the US, the forced dissolution of Standard Oil may not have occurred, further cementing that it was this nationwide outburst that truly served as the impetus for Congress and the Supreme Court to take legislative and judicial action, rather than some moral obligation.
Although Congress had begun to regulate trusts in 1890 with the ratification of the Sherman Antitrust Act, forced compliance with regulations did not truly begin to happen until 1901, when Theodore Roosevelt was elected. A major point of his progressive platform was an increased regulation of trusts and the promise of protections for the American people against these corporations. In his first term, Roosevelt accomplished what he said he would do. The 1902 lawsuit against the Northern Securities Company and the passage of the 1903 Elkins Act were mild successes and curbed the monopolies that had been growing in the US. However, following the exposés by Ada Tarbell in McClure’s Magazine, Congress once again came under scrutiny by other progressives and the American people, who saw the Elkins Act as insufficient.
This scrutiny was fueled primarily by public outrage regarding how the Elkins Act only levied marginal punishments on offenders. Specifically, it imposed only a monetary fine on monopolies and abolished possible jail time for conspirators. As such, large companies such as Standard Oil, with their deep bank reserves, were able to disregard the Elkins Act, writing off the fines as the cost of doing business. Outcry over such practices received further weight when then Secretary of War and eventual president William Howard Taft gave a speech in Columbus, Ohio on August 19th, 1907. Taft criticized Congress for being too soft on trusts, stating that “It is well understood that the Elkins bill was passed without opposition by, and with the full consent of, the railroads and that the chief reason for this was the elimination of the penitentiary penalty for unjust discriminations. The abolition of imprisonment, as a possible penalty, was unfortunate.” He then went on to say that “Experience has shown that a mere fine is generally not enough to deter a corporation from violation of the law, because it then becomes a matter of mere business speculation.” Finally, Taft echoed the popular sentiment that “imprisonment of two or three prominent officers of a railway company, or a trust, engaged in giving or receiving secret rebates, would have a greater deterrent effect for the future than millions in a fine.”
These statements were representative of public sentiment and, more importantly, legitimized the demands of the public. Having had their demands backed by a member of President Roosevelt’s cabinet, the complaints of the people were no longer able to be placated with empty motions. Thus, Congress’s fear of being perceived as pro-trust in the eyes of their constituents served as the major impetus behind its later actions, rather than a sense of doing the right thing. As a result, the nation’s obsession with kerosene, gasoline, and petroleum began to wane, largely out of disdain for the companies that provided these products, leaving a multi-billion-dollar sized hole in the economy and setting the stage for alcohol’s resurgence as a fuel source.
While Congress worked on a solution for the issues, President Theodore Roosevelt dealt the first major blow. On June 7th, 1906, almost exactly 44 years following the Revenue Act of 1862, the “Free Alcohol Bill” was signed into place. Formally named the “Denatured Alcohol Bill,” it exempted alcohol, if properly denatured, or rendered unfit for personal consumption, and used solely for industrial or medical purposes, from the high taxes imposed by the Revenue Act of 1862. This sudden development was a huge win for the public and even garnered its own column in the New York Times, stating that the bill was “designed to start a great industry that will furnish cheap fuel for many purposes for which gasoline is now used.” With a major roadblock removed, the alcohol industry began to revive in the months and years following. This revival was further facilitated by both the government and the media, with a number of books, treatises, and documents being released in support of alcohol, setting the stage for alcohol’s resurgence as the fuel of choice in the mind of the public.
Although Standard Oil was entrenched in a series of legal battles against the federal government, ultimately resulting in its dissolution into 34 successor entities in 1911, another industry was quietly taking off. In a relatively nondescript factory situated in the middle of Detroit, four miles from the Canadian border, the Ford Motor Company was rolling a Model T automobile off of their production line every three minutes. By 1910, 12,000 Model Ts were on the roads in various cities around the country. This level of success led many to enter the automobile industry, seeking capture a portion of the profit that Henry Ford was making. His main competitor, William C. Durant, was the leading manufacturer of horse-drawn vehicles in the United States, but was rapidly losing market share to Ford’s new horseless carriages. Thus, when faced with the chance to buy the Buick Motor Company, Durant jumped at the chance, ultimately forming the General Motors Company as the larger holding company. In the few years follow his acquisition, Durant acquired a considerable portfolio of automobile companies, namely Oldsmobile and Cadillac. Removed from the board of directors for a few years due to an overleveraging of company assets in order to acquire these subsidiaries, Durant was ultimately able to repurchase a controlling stake of the General Motors Corporation through his founding of and subsequent success with the Chevrolet Motor Company. In the few years that followed 1906, when the first Model T was produced, the number of cars on the road skyrocketed, jumping from 108,100 registered cars in 1906 to 3,617,937 in 1916. The sudden increase of personal vehicles in the US meant that traditional roads outside of metropolitan cities, usually nothing more than dirt ruts in the ground, were grossly inadequate, turning into pits of mud when it rained and choked with dust if it was dry. In order to deal with this situation, the government funded the first federal highway bill in 1916, leading to hundreds of thousands of miles’ worth of concrete being laid down and drastically increasing the ease of interstate and intrastate travel for the average American. This boom in number of motor vehicles as well as roads for these motor vehicles to drive on meant that demand for fuels also grew exponentially. By 1920, close to 150,000 gas stations existed throughout the US, embedded into this vast network of roads. This increased demand for fuels had to be met somehow, and with the forced dissolution of Standard Oil in 1911 still fresh in the minds of Americans, many were still hesitant to hand their hard-earned cash over to the petroleum industry and looked to the government for replacements.
Knowing that the public had an aversion to petroleum, the government began to promote alcohol as a fuel source, publishing studies such as a 1909 US Geological Survey, which reported: that "In regard to general cleanliness, such as absence of smoke and disagreeable odors, alcohol has many advantages over gasoline or kerosene as a fuel… The exhaust from an alcohol engine is never clouded with a black or grayish smoke." This Congress’ attempt to rebrand themselves as anti-oil and anti-trust in order to realign themselves with their perception of what their constituents would approve of turned out to be relatively successful. In fact, at one point, famous scientist and inventor Alexander Graham Bell, who had invented the telephone some forty years earlier, even wrote a prominent article supporting alcohol in the February 1917 edition of National Geographic magazine. In the article, Bell had nothing but glowing praise for alcohol, even going as far as to claim that “We need never fear the exhaustion of our present fuel supplies so long as we can produce an annual crop of alcohol to any extent desired. The world will probably depend upon alcohol more and more as time goes on, and a great field of usefulness is opening up for the engineer who will modify our machinery to enable alcohol to be used as the source of power.” Prices for alcohol-based fuels continued to fall as more and more farmers began to produce alcohol with their crops, further lowering demand for petroleum. By 1923, alcohol production had become somewhat competitive with gasoline, as industrial alcohol created from cheap Cuban molasses cost less than 20 cents per gallon, compared with the 28 cents per gallon that gasoline was, an all-time high at that point. As a result, Standard Oil experimented with a 10% alcohol, 90% gasoline blend in an effort to reduce costs, but ultimately abandoned this project, citing the instability of gasohol in the presence of water as their reason. However, a major turning point occurred later that year for the petroleum industry, when leaded gasoline, which had been developed two years earlier, began to be marketed to the public.
Upon closer examination of the governmental policies and papers during this period of time, it becomes evident that the government had an ulterior motive for pushing alcohol-based fuels so heavily. With the rapid growth of the automobile industry and the related increase in demand for fuels, the US government faced a huge dilemma at the beginning of the 20th century. While the public called for the metaphorical head of Standard Oil, their increasing affinity for automobiles and fuel, the most plentiful and economical of which was petroleum, meant that any drastic punishments for Standard Oil were essentially off the table. However, letting Standard Oil off with a slap on the wrist was also not an option. Ideally, the government wanted to find a solution that assuaged the public’s distrust in them while still ensuring that the petroleum industry was not decimated, in the event that an alternative fuel was not available, as a fuel shortage would only serve to further heighten the public’s belief that the government did not have their best interests in mind. By turning the public’s attention towards alcohol-based fuels as a replacement for gasoline, the government was able to solve both issues simultaneously, getting back into the good graces of the American people while still allowing Standard Oil to exist, albeit in a severely impaired state. Once again, the government’s fear of public backlash had served as the major impetus behind its actions. Had the government done the truly “moral” thing, Standard Oil would not have been allowed to continue to exist in any form, John D. Rockefeller and other executives of Standard Oil would have faced significant fines and jail-time, and alcohol production for fuel purposes would have been incentivized significantly more. However, due to the fact that the government chose an option that served largely to tide the public over until they forgot about the actions of Standard Oil signals that these intentions were chosen because it was what they perceived that the public wanted them to do. As such, they did the bare minimum that would appease the public. Ultimately, despite the widespread promotion of alcohol around the US, its success was short-lived due to the commercial success of leaded gasoline, which claimed to be the only solution for engine knock. As a result, gasoline sales picked up once again and once again dominated the American fuel market throughout the 1920s. Gasohol again faded into the background.
From the introduction of kerosene in the mid 1800s to the late 1920s, discussed in the paragraphs above, one factor that did not play a major role in shaping the preferences and perceptions of the public towards fuel was the macroeconomic climate of the US. Up until then, the feelings of the American people had largely been based on disillusionments with the free market system, perceived slights towards the people, and overall disagreement on a moral basis with the actions of large corporations, evidenced by the various conflicts and negative events, such as the refinery explosion, that were correlated with Standard Oil. All of this changed in the 1930s, and an ungodly convergence of events set the stage for the third period of time that will be analyzed.
As a result of the relentless promotion done by the government in support of alcohol-based fuels and the lasting impact of the increased demand for crops during World War I, farming had become an incredibly lucrative industry by 1920. According the 1920 census, there were close to 6.5 million farms in the US, worth a total of $78 billion, a 90.1% increase from the $41 billion that the farming industry was worth in 1910. This growth in number of farms also came with the popularization of damaging plowing techniques, resulting in the Great Plains being stripped of its native flora. This native flora, consisting largely of deep-rooted grasses, helped keep moisture in the soil during droughts and reduced the displacement of soil during periods of high winds. The impacts of these plowing techniques were finally felt when a series of droughts created what is now known as the Dust Bowl. The US, already reeling from The Stock Market Crash of 1929, was dealt another blow by the Dust Bowl, plunging the world into a global recession and displacing 2.5 million Americans from the Midwest, many of whom left their alcohol stills behind in their farms. Faced with a nation that was hemorrhaging money, the Administration, under newly elected President Franklin Delano Roosevelt looked for ways to help the most severely impacted Americans, who were generally farmers from the Midwest. In order to do so, the US government had to address the core issue that was causing 25% of Americans to be unemployed and an aid package was being assembled, once again guided by the perceived needs of the American people. Due to dropping crop prices, the idea of using grain-based alcohols as fuel once again emerged, followed by serious discussions about mandating alcohol fuels. In fact, during this time, average commodity prices dropped an average of 37%, and gross income for farmers dropped 52%, leading various farmer’s associations to deem this crisis “the greatest emergency the state has ever seen.” Thus, the attraction of the American public towards alcohol-based fuels was purely due to the economic implications that would come with mass popularization of alcohol-based fuel.
Groups in the Midwest quickly assembled in an effort to explore the feasibility of this idea and to “advocate a long term agricultural policy of using farm products in making ethyl alcohol for motor fuel.” As this movement, deemed the Power Alcohol movement, began to make its way across the Midwest, specifically in the state of Iowa, legislation supporting alcohol-gasoline blends began to make its way into state legislatures. Driven by the farmers’ demand for a new market for their crops, the pieces of legislation that were created as a result of the Power Alcohol movement were radical. Specifically, supporters of the movement sought to mandate the blending of gasoline and ethanol, backing their demands with results from studies performed at Iowa State College that showed the benefits of an ethanol-gasoline mixture. These supporters also believed that this fuel would use up any excess corn supplies, and solve the crisis. Seeing this as the perfect solution that would alleviate the crisis and under pressure from the public to fix the reeling economy, Iowa politicians quickly used the research to bring forth legislation mandating the blending of alcohol into gasoline. Through a series of fortuitous events, starting with the election of Clyde Herring, Iowa’s second Democratic governor since the Civil War, followed by the Democratic dominance of a traditionally Republican General Assembly, 77-31, and finally bolstered by the increasing public outrage towards the government as a result of the crisis, the political climate in Iowa had shifted to the point where this radical idea was garnering serious consideration. As more Midwest towns and cities found out about the possibility of a law that mandated the blending of alcohol and gasoline, media coverage of this issue began to grow, and support for this bill skyrocketed. Newspapers such as the Ames Daily Tribune-Times called this bill the “most interesting and perhaps the most fruitful of real benefit for Iowa.” The bravest of Iowans even decided to try this for themselves, by mixing radiator alcohol into their gasoline. Politicians, with heavy urging from their constituents, worked quickly to draft and present the bill to the Iowa Senate, in hopes it would reach the General Assembly in time for a vote before their recess. The way that it was drafted meant that the bill had to be passed in two parts, the first allowing for the manufacturing of industrial alcohol within the borders of Iowa, and the second focusing on exactly how the alcohol mandate would be implemented. With the benefits presented and a newly democratic assembly in place, the first part of the legislation was easily passed and, to the dismay of prohibitionists and members of the temperance unions, the metaphorical “deal with the Devil” had been struck.
While the first part passed through the Iowa Senate with no issues at all, the second part proved to be far more complicated. Despite overwhelming public and political support for the bill by influential politicians, namely the US Secretary of Agriculture, Henry A. Wallace, the details would take months to hash out. As word reached petroleum producers that this bill was close to being passed, a carefully designed counterattack was launched. In mid-February, a critique of the Power Alcohol bill was sent to the General Assembly, detailing the negative effects that this bill could have on the people of Iowa and claiming that the bill, even if passed, would use up less than 5% of all corn crop in the state. By sowing doubt amongst the once-staunch supporters of the Power Alcohol bill, the petroleum industry was able to ignite huge debates amongst both the people and the politicians in the General Assembly. Debates amongst the people revolved around the beneficiaries of the bill, whether it be farmers or gasoline consumers, while debate in the General Assembly was much more technical, focused more on the actual effects and effectiveness of an alcohol-gasoline blend. As the frenzied support for the Power Alcohol bill died down, the motivation and cohesion that the General Assembly once had also fell apart. The almost unanimous Assembly did not move on the bill in their first session, and pushed it after their recess, giving the petroleum industry more time to marshal their forces. Opponents of the bill, backed by the petroleum industry, launched a sizable campaign, urging Iowans and legislators to vote no. As a result, the people of Iowa, the primary force behind the Assembly’s actions began to further splinter and divide, leaving legislators with no idea what to vote for. Ultimately, upon return from its recess, the Power Alcohol bill that was once fervently advocated for and at one time, unified the people of Iowa, was defeated by a vote a 48-57 in the General Assembly, a markedly different result from the 43-6 vote that the Iowa Senate had passed less than a month ago.
With this once promising bill dead, hopes of regulations mandating the blending of Alcohol with Gasoline also began to die. Secretary of Agriculture, Henry A. Wallace, a supporter of this bill, had to endorse FDR’s Agricultural Adjustment Act, resulting in the reduction of commodities such as corn in exchange for government subsidies, which while still serving the same goals, went about doing so in the completely opposite way that the Power Alcohol bill intended. Thus, as exemplified by the actions of the Iowa General Assembly in a larger context, the attitudes of their constituents and their perception of what they believed the general public wanted to be done was the single largest and most important factor behind their actions. Although this example was limited solely to the scope of Iowa, issues, similar to this one, were occurring in cities and states all around the country. Many ideas meant to stimulate crop consumption were presented to legislators in a number of states, but the lobbying power and underhanded tactics of the petroleum industry proved to be too much, and in every single instance, without fail, the public would be persuaded to reject that idea and to keep their cities and states within the firm grasp of the petroleum industry.
In present times, the American people, the petroleum industry, and the US government are still entrenched in war over fuel, one that has been raging for over a century. Although the political landscape has shifted and given more influence to the petroleum industry, the dynamics and core issues have remained the same. With the passage of the first Renewable Fuels Standard as a part of the United States’ energy policy in 2005, mandating the production of four billion gallons of ethanol in 2006, the road to recovery for alcohol-based fuels has started. However, with the success that the petroleum industry has experienced in the absence of a competitor, the competition has never been stronger. Having spent close to two billion dollars lobbying the government from 2000 to 2016, the petroleum industry has not grown complacent in the absence of a competitor, and seeks to tighten its grip on the US every year. Furthermore, the petroleum industry has learned from its mistakes in the past, specifically that of disregarding public opinion, and has enacted specific programs with a purpose of keeping public outrage at a manageable level, one specific example being the British Petroleum (BP) response to the Deepwater Horizon catastrophe in 2010. Understanding the possible ramifications of public outcry, BP created an all-out offense aimed at both appeasing the public and mitigating any damage to the BP brand. With then BP CEO Tony Hayward apologizing on YouTube and a trumpeting of cleanup efforts on their website, it becomes clear that the sole purpose of their actions is to ensure that public perception does not drop below manageable levels. Having done their homework, BP and other petroleum companies understand that, while dropping revenues and stock prices are a concern, the only major factor that could spell an end to their days is if public outcry reaches a level that forces legislators to take action. As such, in order to influence public opinion, petroleum companies have poured millions into their public relations departments with the goal of keeping this façade up for as long as possible. The BP example is the most recent one, but situations such as this have taken place for decades and have generally followed the same trajectory, such as with the Exxon Valdez catastrophe. In the case with Exxon Valdez, the company also sought to placate public feelings, rather than to take full responsibility for the catastrophe. On the Exxon-Mobil website, an feel-good article detailing the remorse that Exxon felt for the catastrophe is supplemented numbers, detailing the billions of dollars’ worth of alleged reparations that Exxon “willingly” paid. Having successfully dealt with the public outrage, Exxon-Mobil rebounded from this catastrophe, and is still one of the most profitable oil and gas companies in the world, with a revenue of $279 billion USD in 2018. As such, it is clear that the petroleum industry recognizes the importance of maintaining public goodwill and are determined to not make the same mistakes that led to the forced dissolution of Standard Oil, almost exactly a century ago.
From the end of the 1930s to the present day, the landscape of the fuel industry has remained relatively the same, save for a few isolated instances that did not result in any major changes being enacted, one of which was the 1970 Oil Embargo of the US by OPEC. Despite rising sentiments regarding various aspects of fuel, such as its impact on the environment, the insistence of US regulatory bodies on appeasing the public rather than focusing on the true merits of various proposals provide an exploitable point of weakness for the petroleum industry to target. As such, a thorough understanding of how this weakness came to be is crucial if the US and the league as a whole ever wants to make meaningful change to its relationship with gasoline.
FOREWORD: The time and effort it takes to get 104 guys out on a field, week after week, in cities all around the US is incredible. The amount of time, money, and resources that is used behind the scenes in order to pack, transport, and set up pads, benches, helmets, and other misc. equipment week after week is something that not many people think about. As I was considering the logistics behind a 14 game season, it became clear to me that while blood, sweat and tears are integral to success in the game of football, there was another liquid that is vital to any franchise. From generators running heat lamps in order to ensure that players stay warm on the sidelines to thousands of gallons of kerosene used to fuel planes, that vital liquid is gasoline. As the sheer scale of usage became clear to me, another question arose. Why gasoline? It's not the safest, and by far not the cleanest burning fuel source. As I searched for alternatives, one stood above the rest. Ethanol, or alcohol, seemed to be the only possible alternative. It was cheap, light, and many motors and engines that are in the vehicles and machines that teams rely on could easily switch over to ethanol, or at least some or of gasoline and alcohol blend. It seemed like a no brainer. Thus, my final question arose, the one that I truly seeked to understand. Why is it, that we as a league and as a nation, have chosen gasoline and petroleum derivatives over a seemingly superior fuel source, one that is cleaner, cheaper, and much easier to produce. This article will explore the reasons behind this through an analysis of national sentiment towards fuel, which is directly representative of the league in itself.
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On October 1st, 1908, the first Ford Model T rolled off the assembly line in Detroit, Michigan and propelled the US into a decades-long and complicated relationship with gasoline and fuel. Although the car was a remarkable feat of engineering, boasting a top speed of 45 miles per hour, the real gem was the inline four-cylinder engine under the hood, producing up to 20 horsepower, and most importantly, capable of running on both pure gasoline or a gasoline-alcohol blend, known as “gasohol.” With the twist of a silver knob, mounted to the right of the steering column, drivers could easily change fuel sources.
This work of human ingenuity was designed specifically with farmers in mind. Having grown up on a farm in Michigan, Henry Ford wanted to create new markets for farmers by promoting crops as not only fuel for humans, but also as fuel for cars and engines. This idea is still seen in Ford Motor Company’s products over a century later, with FlexFuel engines standard on their F-150 light pickup truck line. By modern day standards, gasohol and other alcohol-based fuels are superior to conventional gasoline. It is easily created from grains, tends to burn cleaner than gasoline, and provides fuel of a higher octane rating, which allows for the operation of larger and more powerful internal combustion engines without harmful premature detonation of the fuel-air mixture, colloquially known as “engine knock.” As such, the fact that gasoline is magnitudes more popular than gasohol is an anomaly. This paper will seek to explore the true motivations behind the actions of regulatory bodies through the lens of fuel and will seek to argue that alcohol and petroleum-based fuel regulation, production, and consumption in the US was largely driven by governmental perceptions of what the public wanted them to do rather than because of a moral obligation. This phenomenon will be explored largely through an analysis of widespread debates regarding gasohol and petroleum fuel, as well as of the cycles of popularity in petroleum- and alcohol-based fuels across the twentieth century.
The debate over fuel has been controversial ever since the mid 1800s when alcohol was discovered as a possible alternative to animal products as an energy source. The difference in effectiveness, as well as the long term economic impacts of petroleum-based versus alcohol-based fuels have both been explored heavily, with many studies coming to the conclusion that alcohol-based fuels are cleaner and provide fuel of a higher octane, but are less economically feasible. Articles such as one by R.S. Chambers titled “Gasohol: Does it or Doesn’t It Produce Positive Net Energy” and various policy simulations such as one created in 1980 by Ronald L. Meekhof speak to the abundance of scholarly debate about the concrete effects of gasohol versus conventional gasoline. However, one aspect of the fuel debate that has not been discussed heavily is the trajectory that the US took to its current state, one that heavily favors petroleum-based fuels over gasohol. One article tangentially related to this aspect is a 2014 article by Sei-Hill Kim in Journalism Studies, titled “Talking about biofuel in the news.” However, the article only seeks to separate media stories about biofuel into distinct groups, either a scientific issue, an economic issue, or a policy issue. The article also limits itself to media stories regarding fuel in the last two decades, and does not look at the earlier years of the fuel debate. By extending the view of this debate, a deeper understanding of the causes motivating governmental action can be uncovered.
From its conception to the present, the United States of America has long been infatuated with alcohol. As a major source of revenue and clean source of water for sailors, alcohol was and still is a major product of Puerto Rico and other tropical regions of the US. Although alcohol as a drink was big, its potential as a fuel source was just as large in the early 19th century. During the mid 1850s, alcohol was relatively popular at the time as a source of fuel for lights and lanterns. The popularity of alcohol was largely because it was a significantly cheaper alternative to the traditional whale oil and lard. However, this period of boom for alcohol as a fuel source was short-lived, as the advent of the Civil War led to the introduction of the Revenue Act of 1862 and the creation of the Bureau of Internal Revenue, known today as the Internal Revenue Service. The Revenue Act of 1862 required distillers of liquor to pay $50 per liquor license, equivalent to around $1,300 in 2019 dollars, and added an excise tax equivalent to 40 cents per gallon. These pieces of legislation, although intending to provide tax revenue for the Union in its war against the Confederate States of America, placed a huge burden on lower-class Americans and drove alcohol prices up exponentially. The enactment of this piece of legislation was timed perfectly with the discovery and commercialization of kerosene derived from petroleum as a fuel source. As such, the already small alcohol industry was further decimated, and petroleum boomed in popularity due to the incentives. This boom lasted much longer than the Civil War itself, and with the formation of Standard Oil in 1870 by John D. Rockefeller, the US had officially become dependent on petroleum, setting the stage for the first period of promotion for alcohol-based fuels and introducing the first set of major players: Standard Oil and the Theodore Roosevelt Administration.
Although the first petroleum boom essentially happened overnight, within two decades of the 1870 incorporation of Standard Oil, John D. Rockefeller had entrenched oil as the best source of fuel in the minds of Americans and benefitted heavily from that. In the twenty-seven years that Rockefeller ran Standard Oil and in the years after, during which he was the largest shareholder of Standard Oil Stock, Rockefeller had managed to monopolize the fuel industry as a whole, controlling 90% of all oil in the US at his peak and accounting for 2% of US GDP. The formation of one of the largest monopolies in history was not met well by the people, and public outrage began to mount. Furthermore, a series of exposés written by famous muckraker Ida Tarbell in McClure’s Magazine also gained traction with the public. The seemingly innocent title of the exposé, “The History of the Standard Oil Company,” did not belie the dark parts of Standard Oil that Tarbell wrote about. Specifically, chapter four of her exposé, titled “An Unholy Alliance,” talked about how Standard Oil strong armed independent regional oil refiners all around the US, claiming that when asked “What are you [Standard Oil] going to do with the men who prefer to run their own business?” regarding a proposed expansion by Standard Oil in the Pittsburgh area, a representative of the company replied laconically that they would “Go through them.” This public exposition of Standard Oil’s low-handed methods proved sufficient to sway the vast majority of public opinion against Standard Oil. As a result, in the months following Tarbell’s exposé, cities and towns in the way of Standard Oil’s expansion began to take concrete action.
Outraged by Tarbell’s works, the public and the media began a series of crusades against Standard Oil, culminating in a number lengthy legal battles all around the US. An article published in Daily Capital Journal in 1904 regarding the expansion of Standard Oil and its shady practices (titled “Kansas Strikes Oil: Opposes Transfers to the Big Octopus”), gives insight into general public attitudes towards the petroleum industry during this time. Specifically, it detailed how “The state of Kansas, with $400,000 and a stiff-backed population, has set about the task of fighting Standard Oil, with $400,000,000,000 and tentacles spreading all over the United States and foreign countries.” Such statements exemplify the extent to which public backlash towards Standard Oil had grown and the pressure that state and national legislators came under. In this case, the Kansas State Legislature ultimately passed six separate bills that limited Standard Oil’s power, as a result of physical revolts carried out by the population. This unanimous outcry by the public and resulting actions by legislators set off a series of chain reactions that ultimately proved to be fatal for Standard Oil. Newspapers all around the US began to cover various aspects of this issue, highlighted by the May 10th, 1906 issue of the Spokane Press, in which “E.M. Wilholt of Topeka, former Standard Oil agent, at the interstate commerce commission hearing today testified that the Standard Oil company order him to pay for information concerning competitors and that Standard Oil maintained an espionage system throughout the country.”
In two decades, the beginning of which was marked by an 1887 antitrust lawsuit filed by the State of Ohio, Standard Oil had been repeatedly reprimanded by state and federal courts, much to the delight of the American people, and had faced thirty-three separate antitrust lawsuits filed by ten states and the Oklahoma Territory. This confluence of events, resulting from the Tarbell exposés, the various court decisions against Standard Oil, and the sheer negative coverage surrounding the company began to spill out of the relatively rural areas that had been directly affected, and Standard Oil began to lose the hearts and minds of Americans all around the country, specifically those living in larger cities that had reaped benefits from Standard Oil’s operations. The billions of dollars made by Standard Oil in the rural Midwest since the late 1800s had largely been brought over and injected into the economies of major cities through the creation of refinery jobs, one example being the 1890 creation of the Standard Oil Whiting Refinery in Whiting, Indiana. Only seventeen miles from the heart of downtown Chicago, the Whiting Refinery provided 2,400 jobs and was the largest refinery in the US, accounting for 20% of Standard Oil’s refining capabilities at the time. The revenue generated by Standard Oil not only affected cities in the Midwest, but also had ramifications in the Northeast, shown through creation of a number of estates in the area by Rockefeller, such as the Lakewood Golf House Estate in Ocean County, New Jersey, which paid local builders and gardeners an above-average salary. As such, the public perception of Standard Oil in major cities and the Northeast before the Tarbell exposés were published was fairly mixed, with many still supporting Standard Oil due to the financial incentives it had provided. Even as late as 1907, newspapers in large cities, such as the New York Times, were still commending Standard Oil by noting “the extraordinary ability exhibited by the men who from the beginning have controlled the Standard Oil Company, an ability exhibited no less in retaining control of the industry within few hands than in building it up to its present vast proportions.” By realizing the level of complexity that was present in the relationship between Standard Oil and the more developed areas of the US, the emergence of public discourse in the Northeast becomes even more significant. The appearance of a 1911 antitrust lawsuit regarding Standard Oil and John D. Rockefeller was a monumental signal that the demands of the public had overwhelmed whatever financial benefits the company provided for the region. Indeed, it was this “betrayal” of Rockefeller and Standard Oil by the Supreme Court that proved to be the final act that led to its breakup. The majority opinion of the case, delivered by Chief Justice Edward D. White, was very much in line with the sentiments to the public, stating that “The combination of the defendants in this case is an unreasonable and undue restraint of trade in petroleum and its products moving in interstate commerce, and falls within the prohibitions of the act as so construed.” A deeper analysis of a New York Times article, published the day after the decision, gives further insight into the reactions of the public, describing the courtroom as having “breathed a sigh of relief at the final gratification of a nation-wide curiosity in regard to the fate of one of the most gigantic business organizations known in the world’s history.” The tone of the article, describing the “relief” that the public felt when Standard Oil was forced to dissolve, was a marked departure from the pro-Standard Oil stance taken by the New York Times in earlier years and evidenced the shift of public perception in major cities and the Northeast as discussed earlier. As such, without the emergence of public dissent towards Standard Oil in areas that had previously been ambiguous about this issue and the ubiquity of negative public perception all around the US, the forced dissolution of Standard Oil may not have occurred, further cementing that it was this nationwide outburst that truly served as the impetus for Congress and the Supreme Court to take legislative and judicial action, rather than some moral obligation.
Although Congress had begun to regulate trusts in 1890 with the ratification of the Sherman Antitrust Act, forced compliance with regulations did not truly begin to happen until 1901, when Theodore Roosevelt was elected. A major point of his progressive platform was an increased regulation of trusts and the promise of protections for the American people against these corporations. In his first term, Roosevelt accomplished what he said he would do. The 1902 lawsuit against the Northern Securities Company and the passage of the 1903 Elkins Act were mild successes and curbed the monopolies that had been growing in the US. However, following the exposés by Ada Tarbell in McClure’s Magazine, Congress once again came under scrutiny by other progressives and the American people, who saw the Elkins Act as insufficient.
This scrutiny was fueled primarily by public outrage regarding how the Elkins Act only levied marginal punishments on offenders. Specifically, it imposed only a monetary fine on monopolies and abolished possible jail time for conspirators. As such, large companies such as Standard Oil, with their deep bank reserves, were able to disregard the Elkins Act, writing off the fines as the cost of doing business. Outcry over such practices received further weight when then Secretary of War and eventual president William Howard Taft gave a speech in Columbus, Ohio on August 19th, 1907. Taft criticized Congress for being too soft on trusts, stating that “It is well understood that the Elkins bill was passed without opposition by, and with the full consent of, the railroads and that the chief reason for this was the elimination of the penitentiary penalty for unjust discriminations. The abolition of imprisonment, as a possible penalty, was unfortunate.” He then went on to say that “Experience has shown that a mere fine is generally not enough to deter a corporation from violation of the law, because it then becomes a matter of mere business speculation.” Finally, Taft echoed the popular sentiment that “imprisonment of two or three prominent officers of a railway company, or a trust, engaged in giving or receiving secret rebates, would have a greater deterrent effect for the future than millions in a fine.”
These statements were representative of public sentiment and, more importantly, legitimized the demands of the public. Having had their demands backed by a member of President Roosevelt’s cabinet, the complaints of the people were no longer able to be placated with empty motions. Thus, Congress’s fear of being perceived as pro-trust in the eyes of their constituents served as the major impetus behind its later actions, rather than a sense of doing the right thing. As a result, the nation’s obsession with kerosene, gasoline, and petroleum began to wane, largely out of disdain for the companies that provided these products, leaving a multi-billion-dollar sized hole in the economy and setting the stage for alcohol’s resurgence as a fuel source.
While Congress worked on a solution for the issues, President Theodore Roosevelt dealt the first major blow. On June 7th, 1906, almost exactly 44 years following the Revenue Act of 1862, the “Free Alcohol Bill” was signed into place. Formally named the “Denatured Alcohol Bill,” it exempted alcohol, if properly denatured, or rendered unfit for personal consumption, and used solely for industrial or medical purposes, from the high taxes imposed by the Revenue Act of 1862. This sudden development was a huge win for the public and even garnered its own column in the New York Times, stating that the bill was “designed to start a great industry that will furnish cheap fuel for many purposes for which gasoline is now used.” With a major roadblock removed, the alcohol industry began to revive in the months and years following. This revival was further facilitated by both the government and the media, with a number of books, treatises, and documents being released in support of alcohol, setting the stage for alcohol’s resurgence as the fuel of choice in the mind of the public.
Although Standard Oil was entrenched in a series of legal battles against the federal government, ultimately resulting in its dissolution into 34 successor entities in 1911, another industry was quietly taking off. In a relatively nondescript factory situated in the middle of Detroit, four miles from the Canadian border, the Ford Motor Company was rolling a Model T automobile off of their production line every three minutes. By 1910, 12,000 Model Ts were on the roads in various cities around the country. This level of success led many to enter the automobile industry, seeking capture a portion of the profit that Henry Ford was making. His main competitor, William C. Durant, was the leading manufacturer of horse-drawn vehicles in the United States, but was rapidly losing market share to Ford’s new horseless carriages. Thus, when faced with the chance to buy the Buick Motor Company, Durant jumped at the chance, ultimately forming the General Motors Company as the larger holding company. In the few years follow his acquisition, Durant acquired a considerable portfolio of automobile companies, namely Oldsmobile and Cadillac. Removed from the board of directors for a few years due to an overleveraging of company assets in order to acquire these subsidiaries, Durant was ultimately able to repurchase a controlling stake of the General Motors Corporation through his founding of and subsequent success with the Chevrolet Motor Company. In the few years that followed 1906, when the first Model T was produced, the number of cars on the road skyrocketed, jumping from 108,100 registered cars in 1906 to 3,617,937 in 1916. The sudden increase of personal vehicles in the US meant that traditional roads outside of metropolitan cities, usually nothing more than dirt ruts in the ground, were grossly inadequate, turning into pits of mud when it rained and choked with dust if it was dry. In order to deal with this situation, the government funded the first federal highway bill in 1916, leading to hundreds of thousands of miles’ worth of concrete being laid down and drastically increasing the ease of interstate and intrastate travel for the average American. This boom in number of motor vehicles as well as roads for these motor vehicles to drive on meant that demand for fuels also grew exponentially. By 1920, close to 150,000 gas stations existed throughout the US, embedded into this vast network of roads. This increased demand for fuels had to be met somehow, and with the forced dissolution of Standard Oil in 1911 still fresh in the minds of Americans, many were still hesitant to hand their hard-earned cash over to the petroleum industry and looked to the government for replacements.
Knowing that the public had an aversion to petroleum, the government began to promote alcohol as a fuel source, publishing studies such as a 1909 US Geological Survey, which reported: that "In regard to general cleanliness, such as absence of smoke and disagreeable odors, alcohol has many advantages over gasoline or kerosene as a fuel… The exhaust from an alcohol engine is never clouded with a black or grayish smoke." This Congress’ attempt to rebrand themselves as anti-oil and anti-trust in order to realign themselves with their perception of what their constituents would approve of turned out to be relatively successful. In fact, at one point, famous scientist and inventor Alexander Graham Bell, who had invented the telephone some forty years earlier, even wrote a prominent article supporting alcohol in the February 1917 edition of National Geographic magazine. In the article, Bell had nothing but glowing praise for alcohol, even going as far as to claim that “We need never fear the exhaustion of our present fuel supplies so long as we can produce an annual crop of alcohol to any extent desired. The world will probably depend upon alcohol more and more as time goes on, and a great field of usefulness is opening up for the engineer who will modify our machinery to enable alcohol to be used as the source of power.” Prices for alcohol-based fuels continued to fall as more and more farmers began to produce alcohol with their crops, further lowering demand for petroleum. By 1923, alcohol production had become somewhat competitive with gasoline, as industrial alcohol created from cheap Cuban molasses cost less than 20 cents per gallon, compared with the 28 cents per gallon that gasoline was, an all-time high at that point. As a result, Standard Oil experimented with a 10% alcohol, 90% gasoline blend in an effort to reduce costs, but ultimately abandoned this project, citing the instability of gasohol in the presence of water as their reason. However, a major turning point occurred later that year for the petroleum industry, when leaded gasoline, which had been developed two years earlier, began to be marketed to the public.
Upon closer examination of the governmental policies and papers during this period of time, it becomes evident that the government had an ulterior motive for pushing alcohol-based fuels so heavily. With the rapid growth of the automobile industry and the related increase in demand for fuels, the US government faced a huge dilemma at the beginning of the 20th century. While the public called for the metaphorical head of Standard Oil, their increasing affinity for automobiles and fuel, the most plentiful and economical of which was petroleum, meant that any drastic punishments for Standard Oil were essentially off the table. However, letting Standard Oil off with a slap on the wrist was also not an option. Ideally, the government wanted to find a solution that assuaged the public’s distrust in them while still ensuring that the petroleum industry was not decimated, in the event that an alternative fuel was not available, as a fuel shortage would only serve to further heighten the public’s belief that the government did not have their best interests in mind. By turning the public’s attention towards alcohol-based fuels as a replacement for gasoline, the government was able to solve both issues simultaneously, getting back into the good graces of the American people while still allowing Standard Oil to exist, albeit in a severely impaired state. Once again, the government’s fear of public backlash had served as the major impetus behind its actions. Had the government done the truly “moral” thing, Standard Oil would not have been allowed to continue to exist in any form, John D. Rockefeller and other executives of Standard Oil would have faced significant fines and jail-time, and alcohol production for fuel purposes would have been incentivized significantly more. However, due to the fact that the government chose an option that served largely to tide the public over until they forgot about the actions of Standard Oil signals that these intentions were chosen because it was what they perceived that the public wanted them to do. As such, they did the bare minimum that would appease the public. Ultimately, despite the widespread promotion of alcohol around the US, its success was short-lived due to the commercial success of leaded gasoline, which claimed to be the only solution for engine knock. As a result, gasoline sales picked up once again and once again dominated the American fuel market throughout the 1920s. Gasohol again faded into the background.
From the introduction of kerosene in the mid 1800s to the late 1920s, discussed in the paragraphs above, one factor that did not play a major role in shaping the preferences and perceptions of the public towards fuel was the macroeconomic climate of the US. Up until then, the feelings of the American people had largely been based on disillusionments with the free market system, perceived slights towards the people, and overall disagreement on a moral basis with the actions of large corporations, evidenced by the various conflicts and negative events, such as the refinery explosion, that were correlated with Standard Oil. All of this changed in the 1930s, and an ungodly convergence of events set the stage for the third period of time that will be analyzed.
As a result of the relentless promotion done by the government in support of alcohol-based fuels and the lasting impact of the increased demand for crops during World War I, farming had become an incredibly lucrative industry by 1920. According the 1920 census, there were close to 6.5 million farms in the US, worth a total of $78 billion, a 90.1% increase from the $41 billion that the farming industry was worth in 1910. This growth in number of farms also came with the popularization of damaging plowing techniques, resulting in the Great Plains being stripped of its native flora. This native flora, consisting largely of deep-rooted grasses, helped keep moisture in the soil during droughts and reduced the displacement of soil during periods of high winds. The impacts of these plowing techniques were finally felt when a series of droughts created what is now known as the Dust Bowl. The US, already reeling from The Stock Market Crash of 1929, was dealt another blow by the Dust Bowl, plunging the world into a global recession and displacing 2.5 million Americans from the Midwest, many of whom left their alcohol stills behind in their farms. Faced with a nation that was hemorrhaging money, the Administration, under newly elected President Franklin Delano Roosevelt looked for ways to help the most severely impacted Americans, who were generally farmers from the Midwest. In order to do so, the US government had to address the core issue that was causing 25% of Americans to be unemployed and an aid package was being assembled, once again guided by the perceived needs of the American people. Due to dropping crop prices, the idea of using grain-based alcohols as fuel once again emerged, followed by serious discussions about mandating alcohol fuels. In fact, during this time, average commodity prices dropped an average of 37%, and gross income for farmers dropped 52%, leading various farmer’s associations to deem this crisis “the greatest emergency the state has ever seen.” Thus, the attraction of the American public towards alcohol-based fuels was purely due to the economic implications that would come with mass popularization of alcohol-based fuel.
Groups in the Midwest quickly assembled in an effort to explore the feasibility of this idea and to “advocate a long term agricultural policy of using farm products in making ethyl alcohol for motor fuel.” As this movement, deemed the Power Alcohol movement, began to make its way across the Midwest, specifically in the state of Iowa, legislation supporting alcohol-gasoline blends began to make its way into state legislatures. Driven by the farmers’ demand for a new market for their crops, the pieces of legislation that were created as a result of the Power Alcohol movement were radical. Specifically, supporters of the movement sought to mandate the blending of gasoline and ethanol, backing their demands with results from studies performed at Iowa State College that showed the benefits of an ethanol-gasoline mixture. These supporters also believed that this fuel would use up any excess corn supplies, and solve the crisis. Seeing this as the perfect solution that would alleviate the crisis and under pressure from the public to fix the reeling economy, Iowa politicians quickly used the research to bring forth legislation mandating the blending of alcohol into gasoline. Through a series of fortuitous events, starting with the election of Clyde Herring, Iowa’s second Democratic governor since the Civil War, followed by the Democratic dominance of a traditionally Republican General Assembly, 77-31, and finally bolstered by the increasing public outrage towards the government as a result of the crisis, the political climate in Iowa had shifted to the point where this radical idea was garnering serious consideration. As more Midwest towns and cities found out about the possibility of a law that mandated the blending of alcohol and gasoline, media coverage of this issue began to grow, and support for this bill skyrocketed. Newspapers such as the Ames Daily Tribune-Times called this bill the “most interesting and perhaps the most fruitful of real benefit for Iowa.” The bravest of Iowans even decided to try this for themselves, by mixing radiator alcohol into their gasoline. Politicians, with heavy urging from their constituents, worked quickly to draft and present the bill to the Iowa Senate, in hopes it would reach the General Assembly in time for a vote before their recess. The way that it was drafted meant that the bill had to be passed in two parts, the first allowing for the manufacturing of industrial alcohol within the borders of Iowa, and the second focusing on exactly how the alcohol mandate would be implemented. With the benefits presented and a newly democratic assembly in place, the first part of the legislation was easily passed and, to the dismay of prohibitionists and members of the temperance unions, the metaphorical “deal with the Devil” had been struck.
While the first part passed through the Iowa Senate with no issues at all, the second part proved to be far more complicated. Despite overwhelming public and political support for the bill by influential politicians, namely the US Secretary of Agriculture, Henry A. Wallace, the details would take months to hash out. As word reached petroleum producers that this bill was close to being passed, a carefully designed counterattack was launched. In mid-February, a critique of the Power Alcohol bill was sent to the General Assembly, detailing the negative effects that this bill could have on the people of Iowa and claiming that the bill, even if passed, would use up less than 5% of all corn crop in the state. By sowing doubt amongst the once-staunch supporters of the Power Alcohol bill, the petroleum industry was able to ignite huge debates amongst both the people and the politicians in the General Assembly. Debates amongst the people revolved around the beneficiaries of the bill, whether it be farmers or gasoline consumers, while debate in the General Assembly was much more technical, focused more on the actual effects and effectiveness of an alcohol-gasoline blend. As the frenzied support for the Power Alcohol bill died down, the motivation and cohesion that the General Assembly once had also fell apart. The almost unanimous Assembly did not move on the bill in their first session, and pushed it after their recess, giving the petroleum industry more time to marshal their forces. Opponents of the bill, backed by the petroleum industry, launched a sizable campaign, urging Iowans and legislators to vote no. As a result, the people of Iowa, the primary force behind the Assembly’s actions began to further splinter and divide, leaving legislators with no idea what to vote for. Ultimately, upon return from its recess, the Power Alcohol bill that was once fervently advocated for and at one time, unified the people of Iowa, was defeated by a vote a 48-57 in the General Assembly, a markedly different result from the 43-6 vote that the Iowa Senate had passed less than a month ago.
With this once promising bill dead, hopes of regulations mandating the blending of Alcohol with Gasoline also began to die. Secretary of Agriculture, Henry A. Wallace, a supporter of this bill, had to endorse FDR’s Agricultural Adjustment Act, resulting in the reduction of commodities such as corn in exchange for government subsidies, which while still serving the same goals, went about doing so in the completely opposite way that the Power Alcohol bill intended. Thus, as exemplified by the actions of the Iowa General Assembly in a larger context, the attitudes of their constituents and their perception of what they believed the general public wanted to be done was the single largest and most important factor behind their actions. Although this example was limited solely to the scope of Iowa, issues, similar to this one, were occurring in cities and states all around the country. Many ideas meant to stimulate crop consumption were presented to legislators in a number of states, but the lobbying power and underhanded tactics of the petroleum industry proved to be too much, and in every single instance, without fail, the public would be persuaded to reject that idea and to keep their cities and states within the firm grasp of the petroleum industry.
In present times, the American people, the petroleum industry, and the US government are still entrenched in war over fuel, one that has been raging for over a century. Although the political landscape has shifted and given more influence to the petroleum industry, the dynamics and core issues have remained the same. With the passage of the first Renewable Fuels Standard as a part of the United States’ energy policy in 2005, mandating the production of four billion gallons of ethanol in 2006, the road to recovery for alcohol-based fuels has started. However, with the success that the petroleum industry has experienced in the absence of a competitor, the competition has never been stronger. Having spent close to two billion dollars lobbying the government from 2000 to 2016, the petroleum industry has not grown complacent in the absence of a competitor, and seeks to tighten its grip on the US every year. Furthermore, the petroleum industry has learned from its mistakes in the past, specifically that of disregarding public opinion, and has enacted specific programs with a purpose of keeping public outrage at a manageable level, one specific example being the British Petroleum (BP) response to the Deepwater Horizon catastrophe in 2010. Understanding the possible ramifications of public outcry, BP created an all-out offense aimed at both appeasing the public and mitigating any damage to the BP brand. With then BP CEO Tony Hayward apologizing on YouTube and a trumpeting of cleanup efforts on their website, it becomes clear that the sole purpose of their actions is to ensure that public perception does not drop below manageable levels. Having done their homework, BP and other petroleum companies understand that, while dropping revenues and stock prices are a concern, the only major factor that could spell an end to their days is if public outcry reaches a level that forces legislators to take action. As such, in order to influence public opinion, petroleum companies have poured millions into their public relations departments with the goal of keeping this façade up for as long as possible. The BP example is the most recent one, but situations such as this have taken place for decades and have generally followed the same trajectory, such as with the Exxon Valdez catastrophe. In the case with Exxon Valdez, the company also sought to placate public feelings, rather than to take full responsibility for the catastrophe. On the Exxon-Mobil website, an feel-good article detailing the remorse that Exxon felt for the catastrophe is supplemented numbers, detailing the billions of dollars’ worth of alleged reparations that Exxon “willingly” paid. Having successfully dealt with the public outrage, Exxon-Mobil rebounded from this catastrophe, and is still one of the most profitable oil and gas companies in the world, with a revenue of $279 billion USD in 2018. As such, it is clear that the petroleum industry recognizes the importance of maintaining public goodwill and are determined to not make the same mistakes that led to the forced dissolution of Standard Oil, almost exactly a century ago.
From the end of the 1930s to the present day, the landscape of the fuel industry has remained relatively the same, save for a few isolated instances that did not result in any major changes being enacted, one of which was the 1970 Oil Embargo of the US by OPEC. Despite rising sentiments regarding various aspects of fuel, such as its impact on the environment, the insistence of US regulatory bodies on appeasing the public rather than focusing on the true merits of various proposals provide an exploitable point of weakness for the petroleum industry to target. As such, a thorough understanding of how this weakness came to be is crucial if the US and the league as a whole ever wants to make meaningful change to its relationship with gasoline.
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