The term
'barrel of oil' maybe an historical one, but it does come from the original use of a
'barrel' that had no standard volume. The wooden barrel in use goes back to
1859 and
Edwin Drake, who drilled the first oil well:
Titusville, Pennsylvania in the
United States of America. Production was greater than anticipated and washtubs were replaced with the wooden barrels used for transporting whiskey (
40 US gallons), oysters, salt and corn (all
similarly sized by volume). The lack of a standard size meant that customers paying by the barrel would get varying volumes of the product. Production increased and a standard become more important.
Standard OilAs an historical note, oil has not been shipped in barrels for a very long time, though originally Standard Oil produced the painted blue barrel. The
blue barrel (bbl) is nowadays a steel drum, but remains the standard unit for the measurement and pricing of oil.
The connection between oil
and the very volatile waste petrol fractions with the
internal combustion engine dates back to
1838 when the
UK inventor William Barnett applied for a patent for the device. The federal government enacted new tax laws to help fund the
Civil War (1861-1865) and even when the
conflict ended, the
taxes remained. The standard measure of oil by the
1870s had been set at
42 US gallons and helped the office of the
Commissioner of Internal Revenue make its collections.
Oil production in the
1860s had maximised and the consequence was that the price of oil dropped to as little as
10 cents per gallon. The combination of the empty barrel costing
20 times this amount
($2) and the very high transportation costs as the
teamsters charged dearly set the scene for the development of the first oil pipeline by
Samuel Van Syckel. The change in
attitude of
2008 makes for an interesting comparison, but it is only the consummate greed that manipulates financial markets that has evolved.
With tanks replacing them, the actual barrel eventually became obsolete. However, the
42 US- gallon (barrel) is still the standard unit of measure. Temperature can affect the volume of the contents as it expands when warmed or contracts on cooling.
- Does the estimated volume of subterranean (hot) oil deposits actually demonstrate a potential error in reality? There is less than imagined: it cools on the surface and so contracts.
Citation: Daniel Engber (24th March, 2005)
