Tank explosion at Pennzoil Oil City refinery

Another economic externality is the Environmental Protection Agency. In 1980 it decided to do something about cleaning up sites. I remember in 1996 or so I was asked to go to a Pennzoil facility in Oil City, Pennsylvania, where a welder had been welding on a tank, and the tank blew up, threw the welder across the river, killed her, and caused a lot of damage. I remember going to that facility and looking at it, and this tank had been built in 1922. It was old riveted steel, they didn't even know how to weld in 1922. This facility had been built in the 1890s, and here in 1996, a hundred years later, it was still operating. They had different economics in the old days, and I'll show you a picture of some of that in a second. But I looked at it, and in the tank farm, where they have the big tanks and storing facilities, they had crushed stone around the tanks. If you went down one foot you would strike oil. They had been spilling oil for so long, a hundred years, that the ground was just nothing but oil underneath the stone. These were relatively small tanks because in the 1920s we didn't use great big tanks like we do today out of welded construction.

~1998 (15 years before 2013). Old riveted 1920s tank exploded killing a welder, blowing her across the river. Facility had 80 years of oil-soaked gravel; Tom realized the plant stayed open to defer EPA cleanup obligations. Includes reference to 1859 Drake well (corrected from Tom's "1856" slip) and Titusville-to-Oil-City riverine oil transport.

It's the environmental police — they're changing a lot of the rules. My example on changing the rules: I once had to investigate the explosion of a storage tank at a refinery in Oil City, Pennsylvania. Oil City is just down the river from Titusville, where Edwin Drake drilled for oil in 1859. That was the beginning of the oil industry. This plant had been built around 1900. The tank that blew up — killed the welder and blew her across the river when it exploded — was an old riveted 1920s tank. This was a Pennzoil facility, now closed. About 15 years ago, at the time it was open. These old riveted tanks, and small-scale production compared to any big refinery in Texas or the West Coast.

Forensic consulting case ca. 1995. 1920s riveted storage tanks, oil-saturated tank farm ground. Tom figures out at breakfast that Pennzoil keeps the refinery running not for production economics but because shutting it would trigger EPA cleanup assessment. Used to illustrate economic externalities.

Economic externalities. I had an explosion — someone was welding on an oil storage tank in Oil City, Pennsylvania. Oil City is just down the river from Titusville. Do you know what Titusville, Pennsylvania is famous for? Edwin Drake discovered oil in 1857 — he drilled for oil. Before that, the only oil one had was bubbling up out of the ground on the North Slope of Alaska or the oil sands in Alberta, where oil is right on the surface. But Edwin Drake actually drilled for it, found it, rather than drilling for water. They built a refinery there around the 1890s in Oil City, Pennsylvania.