In , Austrians were urgently concerned about energy, and rightly so. While neighboring Prussia steadily converted its factories to use coke, Austrian industry continued to rely heavily on lumber for fuel. At the same time, locomotives and traditional consumers such as crafts, households, limeworks, brickworks, agricultural industry, etc.
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We should see that this fuel surrogate also gains entry into common life, and in general seek in the depths of the earth that which its surface from year to year increasingly denies us. There was no shortage of it in Galicia. One must keep in mind throughout the study of the early oil industry that oil pioneers did not intend to challenge the supremacy of coal. Oil was associated with lamps and light, not engines and furnaces.
It was the extension of light into the evening and nighttime hours, not an explosion of industrial activity, that meant that oil would improve living standards. A history of oil would begin long before humans even wandered the earth. Noah waterproofed his ark with pitch,7 Herodotus described petroleum springs in Zacynthus, and Plutarch depicted a burning lake at Ekbatana. Nineteenth-century authors who described the earliest years of the European oil industry agreed that peasants in all localities where oil was discovered had known of it for centuries, using it to lubricate their wagon wheels or as a medicine for their livestock.
In the eighteenth and early nineteenth centuries, oil was gathered by digging a small ditch and lining it with branches. Peasants plaited long strands of grass or horse tails and swished them through the puddles.
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The oil that stuck to these makeshift brooms was then squeezed out by hand into another Battles for Land and Mineral Rights 51 container. This process was repeated until there was no water left in the mixture. To bring the oil to consumers on market days, the skimmers thickened it with the addition of clay, peat, or cattle manure, which contributed to its terrible odor.
They spent their days laboriously gathering small quantities of oil and their evenings making the long trek back to the market in the regional capital of Drohobycz, their wares suspended from a yoke across their shoulders. This, along with political considerations shaping the relationship between Vienna and the provincial capital, contributed to the nature of early laws covering access to mineral rights to petroleum.
The mineral rights policy that emerged was fundamental to the development of the oil industry, as it has proved to be elsewhere. The world can be divided into those states in which the Crown or central government controls mineral rights, including those to oil, and those in which those rights remain in the hands of the owners of lands suspected of bearing valuable minerals. The exploitation of these rights is generally well organized and concentrated in the hands of a few large corporations that have the capital necessary to purchase them in bulk.
Centralized control limits the number of producers and offers them the advantages that come with unhampered control of supply: prevention of overproduction and the ensuing ability to drive prices up and keep them stable. This supervision tends to increase the prevalence of safety measures and to encourage a slow, calculated rate of exploitation.
Battles for Land and Mineral Rights 53 In the second case, property ownership is considered inviolable, and mineral rights remain in private hands. Only a relatively modest amount of capital is needed to begin exploring for oil, since a would-be producer need only convince one single landowner to lease the mineral rights to a portion of his or her land. Overproduction inevitably lowers the price at the expense of the producers themselves. According to proud Texan wildcatters and academic champions of their unique spirit of enterprise, this is a peculiarity of American history.
They claim that in all other countries, the state or its sovereign controls these rights. Even if the encouragement of private industry and independent exploration was symptomatic of a commitment to freedom and private property, it was not uniquely American. In fact, the Austro-Hungarian Empire also left mineral rights to petroleum products in the hands of private landowners. This may come as a surprise to students of nineteenthcentury central Europe, since the political demise of the AustroHungarian Empire in has often been linked to a perceived failure to modernize its economy.
Austria-Hungary has been described as suffering from low levels of industrialization, uneven economic development, a lack of interregional integration, increasing backwardness relative to other European powers and the German Empire in particular,13 and a high degree of protectionism. In the case of the oil industry, the empire followed the American pattern and demonstrated considerable respect for private property by allowing each individual landowner to decide how to exploit, or refuse to exploit, mineral rights to his or her land.
Why, they asked, should Austria deny itself the advantages so many other states had secured through public control of mineral rights? Even today, the privatization of petroleum ownership remains the exception, not the rule. The question of control over mineral rights to petroleum was a major theme in trade journals, parliamentary debates, and meetings of industrial clubs and mining societies throughout the second half of the nineteenth century.
Many contemporary Austrians were surprised that the state chose private over Crown control.haystan.tk
Most mineral rights, including those to gold, silver, platinum, copper, iron, coal, zinc, tin, lead, mercury, alum, and salt, were controlled by the state. Like any sensible entrepreneur considering a new venture, Doms had several questions whose answers would determine how willing he was to invest time and money in this new enterprise.
There was, after all, little precedent for investment in the oil industry, which had not existed as such until What and where was he allowed to mine? From whom Battles for Land and Mineral Rights 55 should he lease the mineral rights? What exactly would these rights allow him to extract and sell? At that time, an imperial patent announced that control over all metals and minerals in Galicia found in ravines, galleries, deposits, and seams with the exception of peat and bogs, which remained private was reserved by the imperial government.
The exploitation of these minerals would henceforth require the acquisition of a royal concession, in keeping with mineral policies elsewhere in the empire. No lamp would burn oil safely, and the odor emitted by a petroleum lamp was, by all accounts, unbearably rancid. Unfortunately for 56 Galician California Hecker, transportation problems, leaky barrels, and transportation costs equivalent to nearly two-thirds of the price of the oil forced him to breach his contract, prematurely ending his Rockefellerian experiment in distribution.
Consequently, the Exchequer reconsidered its earlier decision and announced its new policy in October all bitumina, including those in liquid form, were to be subject to the Imperial Mining Prerogative and thus fell under imperial jurisdiction. Privileges would be distributed by the Ministry of Finance, as they were to Josef Micewski in and the Drohobycz Chamber of Commerce in But this soon changed.
The Exchequer responded to local pressure in December by again removing liquid bitumina that did not appear in conjunction with coal or solid bitumina from the Imperial Mining Prerogative. Among them was Jan Zeh — Now Zeh was in a better position to indulge his curiosity about the material, and he devoted himself to the task of classifying and purifying it. His clothes, hair, and skin were so saturated with the stench of burning oil that he was hardly able to appear in public. Zeh later reminisced that people avoided him, suspecting that he was insane; he even claimed that old ladies whispered and pointed at him when he walked down the street.
The price he paid for his discovery was beyond measure: he later lost his wife and sister-in-law in an explosion set off when a match ignited petroleum gases near their store. As promising as his new lighting material was, and as carefully as he explained how to use it, it did not catch on. Servants and cooks in Lviv households who experimented with the new product cursed his invention. In the winter of — the railway converted entirely to petroleum lighting. A few years later, in November , the government explicitly insisted that liquid petroleum belonged to the bitumina family, but the Galician Provincial Diet would hear nothing of this.
It meant that determining the legal connection between ownership of surface land and subterranean goods, introducing guidelines for maintaining worker safety, writing regulations to protect farmland and waterways from oleaginous pollution, constructing housing and hospitals for oil workers, and arranging for transportation of goods and people into and out of the oil basin, as well as providing mortgages for investors, technical schools for oil engineers and drilling experts, and health and life insurance for workers, all were left to the discretion of the landowners who controlled the Galician Diet.
So, in the early s, even before the extension of comprehensive political autonomy to Galicia in in the wake of the AustroHungarian Compromise, Galician landowners had successfully asserted their claim to any mineral rights pertaining to the extraction of oil on their land. In principle, legal conditions remained unaltered for two decades, a critical period in the history of the Galician oil industry. The parcellation that had plagued Galicia since the emancipation of the peasants continued to present a major problem.
Peasants became speculators, only to see their plots sublet at even higher rates. Small plots of land suited the needs of small-scale operators, whose investment in oil exploration was very low. All that was needed to become a wildcatter in the early days of the oil industry was a ladder, a windlass, a pickax, a shovel, a rope, and a pail. By , only one joint-stock company for the extraction of Galician oil, the Boryslawer Petroleum Gesellschaft, was in place.
Its ruin was blamed in particular on competition from a plethora of small local companies. First, they were generally unable to convince locals to sell their land outright, since even in those cases where landownership was clearly established by land title registers, peasants were reluctant to Battles for Land and Mineral Rights 61 relinquish hard-earned control. Landowners were free to enter into leases with operators who would then acquire extraction rights, usually for a period of roughly twenty years, in exchange for an annual rent payment as long as no oil was discovered.
However, since ownership of the mineral rights was bound to ownership of the land, it was unclear what would happen if the land was sold. Although land sales were rare, they were possible, a source of disquiet for operators with long-term plans for large-scale investments.
A new landowner was not explicitly obliged to honor any contracts for mineral rights made by his or her predecessor, because these obligations did not appear in the land title registers recording landownership. Since plots of land were very small, gaining control over a large tract of land required successfully cobbling together scores of parcels all held by different owners. The oil industry was and is very risky. The rule of capture exacerbated this problem still further.
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Like a deer that wanders from one manorial estate to another, ignoring the niceties of human property and poaching laws, subterranean oil was notoriously inconsiderate of dearly purchased rights to its extraction. Unable to demonstrate whence the oil came, although often suspecting that it came from right under his nose, 62 Galician California a prospector who had struck oil was forced to watch despondently as his neighbors quickly responded to any successful wells they saw on his land by digging wells of their own.
According to law, the minimum distance between two wells was a mere ten fathoms, or about nineteen meters. This, too, made small parcels of land unattractive to serious investors. The oil industry did not appear to thrive under the aegis of private property.