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Postmedia in the gutter

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Richard Wagamese and an Indigenous literary resurgence

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Profiles in gay life

Drip by Drip

The iconic Canadian company that changed the world

Dimitry Anastakis

Imperial Standard: Imperial Oil, Exxon, and the Canadian Oil Industry from 1880

Graham D. Taylor

University of Calgary Press

368 pages, softcover and ebook

We are at a fascinating and fearful juncture. The Second Industrial Revolution of the late nineteenth century remains a global force of social and political change, one that profoundly impacts the economic lives of billions of people. Henry Ford’s legacy persists, despite the onset and geographic unevenness of deindustrialization, especially here in North America. Meanwhile, the post-1970s Third Industrial Revolution of automation, computerization, and digitization is in full bloom, simultaneously accelerating deindustrialization, enabling neoliberalism to flourish, and cementing the Information Age.

Driven by artificial intelligence and the Internet of Things, the Fourth Industrial Revolution of advanced computing, roboticization, and cyberproduction is already at hand, promising even greater workplace and societal disruption. This profound dislocation will unleash previously unimaginable consumptive, information, transportation, and communications freedoms.

All the colliding transformations sparked by these overlapping revolutions have resulted in the developments that frame twenty-­first-­century life: hyperglobalization, economic inequality, and, of course, the planet-­threatening reality of climate change.

Underlying these dizzying and devastating metamorphoses are three key agents of creative destruction that have defined the modern capitalist system that generated the Second, Third, and Fourth Industrial Revolutions. Carbon-­­based energy usage fuels technological change and global growth. The multinational corporation emerges — that sprawling, powerful, and seemingly invincible wellspring of innovation and entrepreneurship. And, in a pivotal role, the internal combustion engine and the automobile industry shape not only modern capitalism, production, consumption, and transportation but the very landscape in which we live.

The story of Imperial Oil forces us to think deeply about the existential issue of our time.

Karsten Petrat

More than any other artifact, the automobile represents a conspicuous question mark hanging over human sustainability on this planet — given its profound ubiquity and immense social, cultural, and economic impact, to say nothing of its production processes and the externalities of its entire energy-­burning and environment-shaping life cycle. Feeding the automobile beast as its handmaiden is the multinational oil company, whose role in shaping modern global political economy has been as profound as the car’s imprint upon society. Without exaggeration, oil has been nothing less than the lifeblood of modernity since the nineteenth century.

Which brings us to Graham D. Taylor’s comprehensive and important Imperial Standard: Imperial Oil, Exxon, and the Canadian Oil Industry from 1880, a book that places one of the largest and most consequential oil firms front and centre. Taylor is among Canada’s leading scholars of business hist­ory. His previous works include the influential The Rise of Canadian Business and a study of Du Pont’s international activities. In this latest book, he connects Imperial Oil to Canada’s business, economic, social, and political past, as well as the country’s present and future, providing the definitive picture of the company’s birth, operations, and impact on the world. This is no small task, given Imperial’s 130-year-long journey from a sixteen-­partner local producer in the 1880s to a massive firm with 2018 revenues of $35 billion and some 5,700 employees.

In researching Imperial’s history, Taylor gained access to its extensive archives, held at the Glenbow Museum in Calgary. That rich perspective results in fruitful insights into the oil sector, business practices, entrepreneurship, corporate formation, and a host of other issues and themes. With an extensive background and knowledge of North American business history, Taylor deftly describes the complex landscape of Imperial — and its contours of public policy, corporate strategy, organizational behaviour, and government relations.

Imperial Oil began in 1880 as an independent Canadian concern, firmly rooted in its Britishness, but it quickly came under the umbrella of the robber baron John D. Rockefeller’s Standard Oil. The quintessential Gilded Age trust — often likened to a nefarious, all-­controlling octopus by the muckraking press — Standard Oil was the “S.O.” in what became “Esso.” Over the years, Imperial came to benefit from Standard’s giant reach, its vast scale, and its innovations, yet it chafed at the confines and compromises the U.S. company forced upon it. All the while, Standard’s leadership often saw Imperial as little more than a pawn in a much larger chess match against Dutch Shell, British Petroleum, and other competitors.

But this is not a simple case study that narrowly analyzes how yet another Canadian firm was swallowed by a U.S. colossus. Imperial Standard reveals a legacy of complicated dynamics — between subsidiary and parent, between corporation and state — and helps us understand the inception of fossil-­fuelled industrial capitalism in this country. Indeed, as Taylor shows, the huge Canadian subsidiary operated within Standard’s intricate structure and Byzantine international entanglements, and within shifting federal politics and questions of political economy. In telling this story, Taylor employs a brisk narrative structure, complete with a Game of Thrones–like cast of characters — from Rockefeller himself to the legendary driller Vern “Dry Hole” Hunter and the “blue-­eyed sheiks” of post-war Alberta.

The book opens with the dawn of the oil industry, moving from its roots in kerosene to the beginnings of modern oil and the origins of Imperial itself. In such places as Petrolia and Oil Springs, in southwestern Ontario, we witness the volatile emergence of the sector, coaxed into existence by a virtual rogues’ gallery of operators, speculators, investors, and mercenaries. We also see how its cyclical boom-and-bust nature was baked in from the start.

Taylor effectively shows how Imperial’s rise in Canada parallels that of Rockefeller’s Standard Oil Trust in the United States; the growth of both ventures was intimately tied to booming railways, to tariff questions (like those we continue to face today), and to evolving extraction technologies. At first, Imperial was a competitor to Standard in Canada, but just as Rockefeller instituted his acquisition and centralization schemes in the United States, he did so internationally. Inevitably, perhaps, Imperial succumbed to the Standard octopus in 1898. Within a decade, anti-trust measures, prompted by predatory practices and bad publicity, broke up Standard’s monopoly in the United States, but Imperial remained a part of Standard Oil of New Jersey, the largest piece left standing by regulators.

Shortly after the First World War, the imperious Walter Teagle, an American brought in to revitalize Standard’s northern operation (and Rockefeller’s eventual successor at Standard), used the Canadian subsidiary to acquire and manage the New Jersey behemoth’s wholly owned enterprises in Peru and Colombia. In this strategy, Standard was similar to the Ford Motor Company, which also used its Canadian subsidiary, Ford of Windsor, to own and operate holdings in countries as far-flung as South Africa and Malaysia. Multinational enterprise and degrees of separation offered tax advantages, tariff advantages, and the advantage of putting a friendly Canadian face on an American firm’s territorial ambitions. Canadian minority shareholders, in both Imperial and Ford, happily and profitably went along with the arrangement.

In June 1907, the very first Imperial gas station opened, on the corner of Cambie and Smythe in Vancouver. Taylor details Imperial’s subsequent full-scale shift to gasoline production and sales over the next decade, along with the company’s increasing integration into the U.S. firm, its labour practices, its operations during the Great Depression, and its role during the Second World War. (He does all of this with a curt, economical tone that suits the company’s buttoned-­down conservatism.)

Then on February 13, 1947, crude oil was discovered near Leduc, Alberta, a find that would transform the province’s economy over the next thirty years. The Leduc strike ushered in a golden age for Imperial, already the largest integrated producer, refiner, and distributor in Canada. It paralleled the country’s post-war baby- and car-­oriented suburban prosperity booms that continue to reverberate in policy and planning decisions today.

Subsequent discoveries revealed more than one billion barrels of oil in Alberta, ushering in a flood of investment and development, pipeline building, and profit-­fuelled diversification. Eventually, in 2004, Imperial would move its headquarters from its commanding modernist tower in Toronto to Calgary. Along the way, the company found ways to survive and flourish, despite the federal-­provincial resource wars of the 1970s, the battle over the National Energy Program, and the regional cleavages of the 1990s and 2000s epitomized by the slogan “The West wants in.” In describing it all, Taylor keeps a tight focus on Imperial’s delicate balancing act between its relations with various governments, its connections to its parent company, and the increasingly competitive domestic and international landscape.

The rough-­and-­tumble details of the company’s northern exploratory adventures and oil sands exploitation, in particular, shed light on current debates over pipelines — all the more relevant following Jason Kenney’s United Conservative Party sweep in the Alberta election in April. Though pipeline proposals and protests have become central features of political discourse in North America, the battles over Keystone, Northern Gateway, and Energy East are just the latest chapter in a much longer dispute. Oil pipelines have been a flashpoint since the first one, thirty kilometres long, was laid between Petrolia and Sarnia in 1862, and more so since the 1940s and 1950s, when they became a major aspect of oil infrastructure.

While the terms of debate have shifted from questions of nationalism, ownership, and political accountability to those of safety, the environment, and sustainability, pipeline politics continues to bedevil governments. In an eerie historical ­parallel, this is especially true for Liberals: the current government’s woes over its 2018 purchase of the Kinder Morgan pipeline echo the 1956 Pipeline Debate that helped topple a previous Liberal dynasty.

Indeed, business history like this can be especially instructive in shaping society’s understanding of current debates and issues, and of the intersection of policy and personality. Consider Sun Oil, the Pennsylvania firm that became Syncrude. Taylor shows how it solidified its interest in the oozing Athabasca tar sands, in part, by drawing on the commonalities between Alberta’s Social Credit premier, Ernest Manning, and Sun’s chief executive, J. Howard Pew, both religious and political conservatives. Elsewhere, he shows how executives and officials in both countries seriously considered atomic explosions to “free” the tar sands oil. Dubbed Operation Cauldron, the plan ultimately foundered because Prime Minister John Diefenbaker’s government was cool to the idea of nuclear weapons.

In an era utterly dominated by the power of multinationals, Imperial Standard provides useful insights into how corporate octopuses function. It also reminds us that governments can impose limits on their power, if only they’re brave enough.

In the book’s final section, on the period since 1980, Taylor tackles the difficult problems faced by the sector and Imperial itself as a part of the wider ExxonMobil multinational structure — including the ongoing volatility of oil prices and the industry’s role in climate change. He does not spare Imperial or its modern parent, ExxonMobil, from his critical gaze, as he details the companies’ brutal practices, from oil field operations around the world to ocean disasters, including the relatively unknown 1970 SS Arrow spill off the coast of Nova Scotia.

He also returns to the oil sands, which represent a particular challenge for Imperial — one “in some respects greater” than its parent company has had to face. The Canadian subsidiary has made a huge capital commitment in a business that has a visibly destructive impact on the landscape and environment, not to mention its easy symbolism as a reflection of everything that’s wrong with the carbon-­based economy and the oil industry itself.

Of course, broader questions remain — questions we will no doubt be asking in the months leading up to the federal election.

Imperial Standard is a corporate history that forces us to think deeply about the existential issue of our time: climate change. How do we deal with a company like Imperial? With its employment of thousands and thousands of Canadians, and with its responsibility for our current predicament? It is easy to take a holier-­than-thou approach and condemn all oil companies for getting us into this mess. And as Taylor makes clear, Exxon was well aware of the impacts of fossil fuels as early as 1979, when it actually conducted major experiments to determine the capacity of oceans to act as carbon sinks. In the early 1980s, Exxon even developed computer simulations to show the effect of carbon upon global temperatures. These companies have ignored their own destructive behaviour in pursuit of profit — and we have to account for that in the decisions we make today.

But all Canadians are, to some degree, complicit in creating and enjoying the oil economy. Ours is a love affair with the car and all that it bestows as our magic carpet ride to work, life, education, and leisure. Are we — as citizens, politicians, industry executives, and shareholders — willing to make the hard choices and take the painful steps necessary to mitigate the consequences of our worst excesses? The history of Imperial Oil in Canada shows us that the innovations of global capital and the modern multinational firm are indeed impressive, and that the world can be utterly transformed in the span of a single century. But it remains to be seen whether the same forces that once gave rise to creative destruction can now save us from ourselves.

Dimitry Anastakis wrote, most recently, Re-Creation, Fragmentation and Resilience: A Brief History of Canada since 1945.

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