`Pennzoil Oil City tank explosion and facility`

EPA hazardous waste site externality. Tom uses the refinery to illustrate why old, inefficient facilities continue operating: shutdown triggers cleanup liability. Late-1990s consulting visit.

The example I like to give of the externality of pollution — the rules have changed over the years. I had an explosion in an oil refinery in Oil City, Pennsylvania. Anybody ever been to Oil City? It's up in the northwest corner. It's just down the river from Titusville. Anybody know what Titusville is famous for? It's where Edwin Drake discovered oil in 1856. That was the beginning of the drilling for oil. Otherwise they used to find oil bubbling up out of the ground. Anybody know where? It did occur in Texas. I used to always wonder why the Strategic Naval Petroleum Reserve, even back in 1900, was in Prudhoe Bay, Alaska. Who was drilling for oil in Prudhoe Bay, Alaska in 1900? Nobody. It was just bubbling up out of the ground. Someone knew there must be something underneath the ground if it's just bubbling up. A lot of the year it didn't bubble up in Prudhoe Bay, but they knew that there was oil on the ground.