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Growth or a Clean Environment? Responses to Petroleum-related Pollution in the Gulf Coast Refining Region*

Published online by Cambridge University Press:  11 June 2012

Joseph A. Pratt
Joseph A. Pratt
Affiliation:
Assistant Professor Of Business Administration, University Of California, Berkeley
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Abstract

The power of history to instruct policy makers and enforcers is demonstrated in this study of the seventy-five-year effort to control pollution by the petroleum industry of the upper Texas Gulf coast. Dividing his subject into three time periods, Professor Pratt shows that the goal of economic growth, even with highly inefficient and polluting production methods, ruled until about 1914; from 1914 to 1940, progress in pollution control resulted primarily from less wasteful refining technology; and in the most recent era pollution, having become critical, is finally being controlled insofar as industry cooperation and national regulation can achieve it. But, he warns, the problem has now attained international proportions, and he asks where the social institutions to effect regulation are to be found on that plane.

Type
Research Article
Information
Business History Review , Volume 52 , Issue 1 , Spring 1978 , pp. 1 - 29
Copyright
Copyright © The President and Fellows of Harvard College 1978

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References

1 Throughout this paper, “upper Texas Gulf coast” refers to the region from around Lake Sabine (near the Texas-Louisiana border) to Galveston Bay. More specifically, the refining and petrochemical complex that is the center of my study is in the four northernmost counties on the Texas coast (Jefferson, Chambers, Harris, and Galveston). For a history of this region, see Pratt, Joe, “The Growth of a Refining Region” (doctoral dissertation, Johns Hopkins University, 1976)Google Scholar.

2 For the story of the development of these oil fields, see Rister, Carl Coke, Oil Titan of the Southwest (Norman, Oklahoma, 1949).Google Scholar See, also, Johnson, Arthur, “The Early Texas Oil Industry – Pipelines and the Growth of an Integrated Oil Industry, 1901-1911,” Journal of Southern History 32 (November 1966), 516–528.CrossRefGoogle Scholar One of the best sources for regional information is a history of the parent company of the largest of these refineries: Larson, Henrietta and Porter, Kenneth, History of Humble Oil and Refining Company (New York, 1959).Google Scholar For a history of Houston, see McComb, David, Houston: The Bayou City (Austin, 1969).Google Scholar For an excellent survey of development on the Texas Gulf coast, see Clark, Joseph L., The Texas Gulf Coast: Its History and Development, 4 vols. (New York, 1955).Google Scholar See, also, Sibley, Marilyn, The Port of Houston: A History (Austin, 1968).Google Scholar

3 Mayor Ben Campbell to Judge James Autry, letter dated August 12, 1913, in Box 30, Personal Correspondence (1913), papers of James L. Autry, Rice University, Houston, Texas. For a good summary of regional and state development prior to 1901, see Spratt, John, The Road to Spindletop (Dallas, 1955).Google Scholar

4 Clark, James and Halbouty, Michel, Spindletop (New York, 1952), 52–94, 105.Google Scholar

5 The lack of reliable, systematic sources of information on the extent of pollution in this early period forces the historian to rely, perhaps excessively, on descriptive information – read in the context of recent advances in the understanding of pollution – in reconstructing conditions.

6 Oil Investors’ Journal, July 5, 1902, p. 5; September 1, 1902, 8.

7 For the classic statement of the long-run costs of such attitudes, see Kapp, K. William, The Social Costs of Private Enterprise (New York, 1950).Google Scholar See, also, Edel, Matthew, Economies and the Environment (Englewood Cliffs, N.J., 1973)Google Scholar and Petulla, Joseph, American Environmental History (San Francisco, 1977).Google Scholar

8 Texaco's first attorney reflected a general attitude when he wrote to the company's president: “The oil business is young in Texas. Its operations are to a degree spectacular and attractive to public attention… It is the kind of shining mark which attracts the attention of the average politician.” Attorney James Autry to President Joseph Cullinan, letter dated May 12, 1904, “Business Correspondence, 1901-1912,” in Folder 1904, Box 27, Papers of James Lockhart Autry, Rice University, Houston, Texas. For Autry's view of antitrust, see Autry to Cullinan, letter dated May 28, 1904, ibid. For a very different view of antitrust, that of the Texas Attorney General, see Lightfoot, Jewel, Antitrust Laws of the State of Texas (Austin, 1907), 51.Google Scholar

9 Farnham, Wallace, “The Weakened Spring of Government: A Study of Nineteenth-Century American History,” in Katz, Stanley and Kutler, Stanley, eds., New Perspectives in the American Past (Boston, 1972), 28–44Google Scholar, provides insights into the inadequacies of late-nineteenth-century government. His general approach is also useful in understanding important shortcomings of the public sector in the twentieth century. See, also, Cochran, Thomas, Business in American Life: A History (New York, 1972),Google Scholar chapters 12, 13, and 20.

10 Even these figures are deceptively high, since these funds were used for various purposes throughout the state, not just in the refining region. See Annual Report of the Comptroller of Public Accounts of the State of Texas, Year Ending August 31, 1900 (Austin, 1901), 107–124.Google Scholar For purposes of comparison, it is useful to note that about $40,000,000 was invested by private companies in the Southeast Texas oil industry from 1901 to September 1904. See Oil Investors’ Journal, September 1, 1904, 1-3.

11 For a brief sketch of the histories of national pollution control and conservation agencies, see Enloe, Cynthia, The Politics of Pollution in a Comparative Perspective: Ecology and Power in Four Nations (New York, 1975), 178–189.Google Scholar For the Texas state agencies, see Thompson, John T., Public Administration of Water Resources in Texas (Austin, 1960), 14–60.Google Scholar

12 For a pathbreaking treatment of conservation policy in the context of the evolving national political structure, see Hays, Samuel, Conservation and the Gospel of Efficiency (New York, 1975).Google Scholar See, especially, the author's preface to the 1975 edition (Atheneum) of the book, which was originally published in 1959.

13 The largest regional companies spent considerable effort in attempting to push through the Texas legislature corporation laws that would allow vertically integrated operations, thereby removing the threat of prosecution for violation of existing, highly restrictive corporation laws. See King, John O., Joseph Stephen Cullinan (Nashville, 1970), 168–175.Google Scholar

14 Department of the Interior, U.S. Bureau of Mines, Pollution of the Coast Waters of the United States (Washington, 1923), 538.Google Scholar A copy is in the API library in Washington, D.C. See also Alperin, Lynn M., Custodians of the Coast: History of the United States Army Engineers at Galveston (Galveston, 1977), 267–281.Google Scholar

15 Ibid., 1-10.

16 Ibid., 434, 440, 64.

17 Ibid., 435, 461, 462

18 Ibid., 577-578.

19 Davies, J. Clarence III and Davies, Barbara, The Politics of Pollution, 2nd ed. (Indianapolis, 1975), 38.Google Scholar

20 Allin, Benjamin, Reaching for the Sea (Boston, 1956), 80–103Google Scholar; B. C. Allin to Mayor of Houston, letter dated December 10, 1922, in “Houston Ship Channel” folder, papers of Joseph Stephen Cullinan, University of Houston, Houston, Texas; W. W. Moore to Mayor Amerman, letter dated December 11, 1922, in “Houston Ship Channel” folder, Cullinan papers; memo to Joseph Cullinan, dated December 27, 1922, in “Houston Ship Channel" folder, Cullinan papers. The Houston Chronicle, July 12, 1925, p. 8, records citizens’ protests of continuing discharges of waste oil into the ship channel.

21 Bronson Batchelor, Stream Pollution: A Study of Proposed Federal Legislation and Its Effect on the Oil Industry, 51, manuscript dated February 1937, in the API library, Washington, D.C.; and Bureau of Mines, Pollution of the Coast Waters of the United States, 1-44.

22 W. B. Hart, “Controlled Disposal of Wastes Versus Pollution," Oil and Gas Journal, May 14, 1936, p. 234. For a general discussion of these bills, see Herman Baity, “Aspects of Governmental Policy on Stream Pollution Abatement," American Journal of Public Health (December 1939), 1297-1307.

23 Bronson Batchelor, Stream Pollution, 45-51.

24 Ibid., 34. A broad study of the oil industry's experience with such “political factors” is Engler, Robert, The Politics of Oil (New York, 1961)Google Scholar. For a general review of national oil policy, see Nash, Gerald, United States Oil Policy, 1890-1964 (Pittsburgh, 1968)Google Scholar. For a general review of air and water pollution legislation, see Clarence Davies III and Barbara Davies, The Politics of Pollution. Also, see Smith, Frank, The Politics of Conservation (New York, 1966).Google Scholar

25 Beaumont Enterprise, March 26, 1939, p. 1; November 11, 1939, p. 4; January 24, 1940, p. 9; January 26, 1940, p. 16.

26 W. B. Hart, “Controlled Disposal of Wastes Versus Pollution,” 237.

27 API, “Report Covering Survey of Oil Conditions in the United States,” 1927, p. 1. Report on file in API library, Washington, D.C.; API, Proceedings of the 17th Mid-Year Meeting, Division of Refining, San Francisco, May 12-15, 1955, 299–300.Google Scholar

28 Hart, W. B., “Disposal of Refinery Waste Waters,” Industrial and Engineering Chemistry 26, no. 9 (September 1934), 965.CrossRefGoogle Scholar

29 API, Manual of the Disposal of Refinery Wastes, Section I: Waste Water Containing Oil (New York, 1941)Google Scholar; Section II: Waste Gases and Vapors (New York, 1931)Google Scholar; Section III: Waste Waters Containing Solutes (New York, 1935).Google Scholar

30 Hart, W. B., “The Waste Control Laboratory of the Atlantic Refining Company,” Water Works and Sewerage 88 (January 1941), 30–31.Google Scholar

31 For a brief discussion of tetraethyl lead, see Oil and Gas Journal – Oil City Derrick, Diamond Jubilee Issue, August 27, 1934, p. 199. For a general discussion of the cumulative effects of such lags, see Commoner, Barry, The Closing Circle: Nature, Man and Technology (New York, 1971)Google Scholar. See, also, Hart, W. B., Industrial Waste Disposal for Petroleum Refineries and Allied Plants (Cleveland, 1947)Google Scholar; W. B. Hart, “Disposal of Refinery Waste Waters,” 967; C. G. Rebman, “Elimination of Waste in Refining,” Oil and Gas Journal, November 4, 1926, pp. 126-130. The general advances in refining technology are discussed in Enos, Johns, Petroleum Progress and Profit: A History of Process Innovation (Cambridge, Mass., 1962).Google Scholar

32 Oil and Gas Journal, November 4, 1926, p. 126; The Look Box 3, no. 8 (August 1921), 6; Oil and Gas Journal, January 13, 1922, pp. 25 and 27. See, also, Wescott, James H., Oil: Its Conservation and Waste (New York, 1930)Google Scholar; Russell, Clifford, Residuals Management in Industry: A Case Study of Petroleum Refining (Baltimore, 1973).Google Scholar

33 Bureau of Mines, Pollution of the Coast Waters, 42–43. Of course, “noneconomic” factors – a court case, political lobbying, public relations – could represent substantial “economic” costs to the firm.

34 See “Port Arthur Scrapbooks,” vol. II, index number 18, at Gates Memorial Library, Port Arthur, Texas; C. G. Rebman, “Elimination of Waste in Refining,” 130; Texaco, Protecting the Environment, 1973, 7.

35 Hart, W. B. and Western, B. F., “The Water Pollution Abatement Problems of the Petroleum Industry,” Water Works and Sewerage 88, no. 5 (May 1941), 217,Google Scholar suggests that improvement occurred throughout the nation in waters affected by the oil industry in the decade before 1941. For a general survey of national conditions in the 1930s, see U.S. Natural Resources Committee, Special Advisory Committee on Water Pollution, Report on Water Pollution (Washington, 1935).Google Scholar

36 Texas Highway Department statistics record an increase of more than 500 per cent in automobile registrations in Harris County (Houston) from 1947 to 1970.

37 Southwest Research Institute, “Project 566-1: Air Pollution Survey of the Houston Area,” dated July 1, 1958, pp. ii-x, on file at Houston Chamber of Commerce, Houston, Texas; Beaumont Enterprise, July 25, 1952, p. 10; September 6, 1962, p. 9; September 26, 1952, 1; September 22, 1955, 11.

38 Williams, Edward B. Jr, “Pollution Control: A Houston Ship Channel Issue” (Master's thesis, Texas A&M University, 1972), 34–47.Google Scholar

39 Ibid., 48.

40 Southwest Research Institute, “Project 21-1587: Air Pollution Survey of the Houston Area, 1964-1966,” dated October 1966, vi, on file at Houston Chamber of Commerce, Houston, Texas.

41 Houston Post, September 13, 1967, p. 1.

42 Norvell, G. Todd and Bell, Alexander, “Air Pollution Control in Texas,” in Legal Control of the Environment (New York, 1970), 337–376.Google Scholar

43 Ibid., 355; Edward Williams, “Pollution Control,” 71-76, argues that “the official composition and actual membership on the Board made its position inevitably pro-industry” (71).

44 G. Todd Norvell and Alexander Bell, “Air Pollution Control in Texas,” 373. For a detailed account of another state's difficulties in passing and enforcing environmental protection legislation, see Landy, Marc, The Politics of Environmental Reform: Controlling Kentucky Strip Mining (Baltimore, 1976).Google Scholar

45 G. Todd Norvell and Alexander Bell, “Air Pollution Control in Texas,” 368-373; Beaumont Enterprise, November 5, 1969, p. 1. The Harris County Air Pollution Control District was created in 1967; a Beaumont-Port Arthur-Orange District in 1969.

46 For such offenses, the possible fines were $1,000 per day per offense. In 1972, Texaco's Port Arthur refinery was fined $6,000 by the Texas Air Control Board. Great Lakes Carbon in Port Arthur paid a $25,000 fine for more severe violations in the same year. See Beaumont Journal, July 4, 1972, p. 1; April 4, 1972, p. 1; Beaumont Enterprise, July 27, 1973, p. 1.

47 Press release to the Port Arthur News, CavOilcade edition, 1971, p. 3. Xerox copy from the Refining Department of the Texaco Archives.

48 Texaco, Protecting the Environment, 3.

49 API estimates of oil industry environmental expenditures suggest an increase of nearly 500 per cent between 1966 and 1974, with the total of such spending in the nine-year period surpassing $7 billion. See API, Environmental Expenditures of the United States Petroleum Industry, 1966-1974 (Washington, 1975)Google Scholar. See, also, Council on Economic Priorities, Cleaning Up: The Cost of Refinery Pollution Control (New York, 1975).Google Scholar

50 Beaumont Enterprise, July 29, 1971, 2A; Kerlin, Gregg and Rabovsky, Daniel (Council on Economic Priorities), Cracking Down: Oil Refining and Pollution Control (New York, 1975), 394–395.Google Scholar

51 For example, see Oliver, Earl, Muller, Robert, and Ferguson, F. Alan, The Economic Impact of Environmental Regulations on the Petroleum Industry (Menlo Park, Ca., 1974).Google Scholar