A Lesson in History – Rockefeller’s Pipeline

Go Lean Commentary

This book Go Lean…Caribbean was written in 2013 in Omaha, Nebraska, in the shadow of one of the world’s richest men, Warren Buffett. The book posits that location is very important for the proper perspective when developing an empowerment plan. The book quotes the Bible scripture at Proverbs 22:29: “Have you beheld a man skillful in his work? Before kings is where he will station himself”. (Page 137). If this was the time of the Roman Empire, an empowerment roadmap like Go Lean would have to be written in Rome.

On the other hand, if this roadmap was written in 1885, at the start of the American Industrial domination, the author would have to be in the shadow of Industrialist John D. Rockefeller in New York City. See VIDEO below.

The Go Lean book posits that one person can make a difference and positively impact their society; so the book advocates for a community ethos of investment in the “gifts” that individuals “bring to table”. The book identifies the quality of geniuses and relates worthwhile returns from their investments. This mode of study allows us to consider this example of contributions from the industrial role model of Mr. Rockefeller and his prudent implementation of pipelines:

JCU Blog - A Lesson in History - Rockefeller Pipeline - Photo 1ohn Davison Rockefeller, Sr. (July 8, 1839 – May 23, 1937) was an American business magnate and philanthropist. He was a co-founder of the Standard Oil Company, which dominated the oil industry and was the first great U.S. business trust. Rockefeller revolutionized the petroleum industry, and along with other key contemporary industrialists such as Andrew Carnegie, defined the structure of modern philanthropy. In 1870, he co-founded Standard Oil Company and actively ran it until he officially retired in 1897.[3]

Rockefeller founded Standard Oil as an Ohio partnership with his brother William along with Henry Flagler, Jabez A. Bostwick, chemist Samuel Andrews, and a silent partner, Stephen V. Harkness. As Kerosene and Gasoline grew in importance, Rockefeller’s wealth soared and he became the world’s richest man and the first American worth more than a billion dollars.[a] Adjusting for inflation, he is often regarded as the richest person in history.[4][5][6][7]

His fortune was mainly used to create the modern systematic approach of targeted philanthropy. He was able to do this through the creation of foundations that had a major effect on medicine, education and scientific research.[8] His foundations pioneered the development of medical research and were instrumental in the eradication of hookworm and yellow fever.

Rockefeller was also the founder of both the University of Chicago and RockefellerUniversity and funded the establishment of Central Philippine University in the Philippines. He was a devoted Northern Baptist and supported many church-based institutions. Rockefeller adhered to total abstinence from alcohol and tobacco throughout his life.[9] He was a faithful congregant of the Erie Street Baptist Mission Church, where he taught Sunday school, and served as a trustee, clerk, and occasional janitor.[10][11] Religion was a guiding force throughout his life, and Rockefeller believed it to be the source of his success. Rockefeller was also considered a supporter of capitalism based in a perspective of social Darwinism, and is often quoted saying “The growth of a large business is merely a survival of the fittest”.[12][13]
Wikipedia Online Encyclopedia  (Retrieved October 18, 2014) –

Living for almost 98 years and accumulating vast wealth, Mr. Rockefeller was highly accomplished. He was an early adoptor of Kerosene oil and earned his initial fortune by fostering entrepreneurship and Research & Development (R&D) around the then-cutting-edge product; see VIDEO below. One accomplishment that aligns with this Go Lean roadmap is Mr. Rockefeller’s strategic, tactical and operational applications of pipelines; see Appendix below. He used pipelines to spur his production, acquire raw materials, deliver finished goods to customers, mitigate against threats, and neutralize competition and opposition.

The book Go Lean … Caribbean also asserts that pipelines can be strategic, tactical and operationally efficient for building community wealth in the Caribbean region. They can mitigate challenges from Mother Nature, create jobs and grow the economy at the same time. The book purports that a new technology-enhanced industrial revolution is emerging, in which there is more efficiency for installing-monitoring-maintaining pipelines. Caribbean society must participate in these developments, in order to “survive with the fittest”. This point is pronounced early in the book with this Declaration of Interdependence (Page 14), with these statements:

xxvi.      Whereas the Caribbean region must have new jobs to empower the engines of the economy and create the income sources for prosperity, and encourage the next generation to forge their dreams right at home, the Federation must therefore foster the development of new industries, like that of … pipelines …

xxvii.      Whereas the region has endured a spectator status during the Industrial Revolution, we cannot stand on the sidelines of this new economy, the Information Revolution. Rather, the Federation must embrace all the tenets of Internet Communications Technology (ICT) to serve as an equalizing element in competition with the rest of the world. The Federation must bridge the digital divide and promote the community ethos that research/development is valuable and must be promoted and incentivized for adoption.

This book Go Lean… Caribbean, serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU) to elevate the 30 Caribbean member-states. This Federation will assume jurisdiction for the 1,063,000 square-mile Caribbean Sea, in an Exclusive Economic Zone. This approach allows for cooperation and coordination for pipelines among the member-states; this will thusly effectuate change in the region by allowing these 3 prime directives:

  • Optimization of the economic engines in order to grow the regional economy to $800 Billion GDP and create 2.2 million new jobs.
  • Establishment of a security apparatus to protect the resultant economic engines.
  • Improve Caribbean governance to support these engines.

The subject of pipelines has been addressed and further elaborated upon in these previous blog/commentaries:

http://www.goleancaribbean.com/blog/?p=1817 Caribbean grapples with intense new cycles of flooding & drought
http://www.goleancaribbean.com/blog/?p=1516 Floods in Minnesota, Drought in California – Why Not Share?

The Go Lean book itself details the economic principles and community ethos to adopt, plus the executions of strategies, tactics, implementations and advocacies to forge pipelines, Research & Development and industrial growth in the Caribbean:

Economic Principles – People Choose because Resources are Limited Page 21
Economic Principles – All Choices Involve Costs Page 21
Economic Principles – People Respond to Incentives Page 21
Economic Principles – Economic Systems Influence Individual Choices Page 21
Economic Principles – Voluntary Trade Creates Wealth Page 21
Community Ethos – Job Multiplier Page 22
Community Ethos – “Crap” Happens Page 23
Community Ethos – Lean Operations Page 24
Community Ethos – Return on Investments (ROI) Page 24
Community Ethos – Cooperatives Page 25
Community Ethos – Ways to Help Entrepreneurship Page 28
Community Ethos – Ways to Promote Intellectual Property Page 29
Community Ethos – Ways to Impact Research & Development Page 30
Community Ethos – Ways to Improve Negotiations Page 32
Community Ethos – Impact the Greater Good Page 37
Anecdote – Pipeline Transport – Strategies, Tactics & Implementations Page 43
Strategy – Vision – Confederating 30 Member-states in a Union Page 45
Strategy – Agents of Change – Technology Page 57
Tactical – Fostering a Technocracy Page 64
Tactical – Growing Economy – New High Multiplier Industries Page 68
Separation of Powers – Interstate Commerce Administration Page 79
Separation of Powers – Interior Department – Exclusive Economic Zone Page 82
Implementation – Assemble – Pipeline as a Focused Activity Page 96
Implementation – Ways to Pay for Change Page 101
Implementation – Benefits from the Exclusive Economic Zone Page 104
Implementation – Ways to Develop a Pipeline Industry Page 107
Implementation – Ways to Deliver Page 109
Planning – 10 Big Ideas – Pipeline Projects Page 127
Planning – Ways to Improve Interstate Commerce Page 129
Planning – Lessons from New York City Page 137
Planning – Lessons from Omaha Page 138
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Create Jobs Page 152
Advocacy – Ways to Better Manage the Social Contract – Infrastructure Page 170
Advocacy – Ways to Ways to Impact Public Works – Ideal for Pipelines Page 175
Advocacy – Ways to Foster Cooperatives Page 176
Advocacy – Ways to Better Manage Natural Resources – Water Resources Page 183
Anecdote – Caribbean Industrialist & Entrepreneur Role Model Page 189
Advocacy – Ways to Impact Extractions – Pipeline Strategy Alignment Page 195
Advocacy – Ways to Improve Emergency Management Page 196
Advocacy – Ways to Foster Technology Page 197
Advocacy – Ways to Impact Wall Street – Adopt Advanced Financial Products Page 200
Advocacy – Ways to Improve Monopolies – Foster Cooperatives Page 202
Advocacy – Ways to Improve Transportation – Pipeline Options Page 205
Appendix – Interstate Compacts Page 278
Appendix – Pipeline Maintenance Robots Page 283

The economic principles of pipelines are sound. Pipelines can be used to bring resources from a source to a destination in a steady consistency, fulfilling the economic supply-demand conundrum. The Go Lean roadmap envisions pipelines solutions for resources like water, natural gas, electricity cables, and telecommunication cables – above ground and underwater.

We have the pipeline example of the prudence and success of one of the world’s richest men (ever) as a model, that of John D. Rockefeller. He also provides a role model for us in the Caribbean in other endeavors of life:

Research & Development (Kerosene & Gasoline)
Cooperatives & Trusts
Creative Financing & Securities Oversight
Fostering Genius
Philanthropic Foundations
Educational Empowerments
Spiritual Guidance

The contributions of a committed person can be impactful indeed in this vision for the elevation and empowerment of the Caribbean homeland. The Go Lean … Caribbean roadmap invites these contributions; (the roadmap mitigates the threats of corporate abuse of a plutocracy). Like Mr. Rockefeller’s model describes, we also invite pipelines, with their strategic, tactical and operational implementations. With the right applications from people, tools and techniques any movement can have an impact in a changing society.

Change has come to the Caribbean. Everyone is hereby urged to lean-in to this roadmap to make the Caribbean a better place to live, work and play. 🙂

Download the book Go Lean…Caribbean now!


Video: Rockefeller’s Standard Oil

John D. Rockefeller built an oil empire by guaranteeing a uniform quality for his Standard Oil Kerosene – History Channel.



APPENDIX – Rockefeller and his Pipeline Reality

In 1877, Standard Oil clashed with the Pennsylvania Railroad, its chief hauler. Rockefeller had envisioned the use of pipelines as an alternative transport system for oil and began a campaign to build and acquire them.[40]

At this stage the company did not actually drill for oil; it merely refined it. In 1879 an association of producers completed the Tidewater Pipeline, running from oil fields in Bradford to the Reading Railroad at Williamsport, Pennsylvania. This innovation demonstrated that crude oil could be shipped cheaply over long distances by pipeline – much more cheaply than by rail, in fact. Standard Oil quickly responded by beginning construction of its own network of pipelines, [installing over 4,000 miles]. Before Tidewater, Standard Oil had made good profits refining oil in Cleveland and other points and shipping it by rail. But the cost-efficiency of pipeline transport made it imperative to ship crude oil to shipping points and refine it there.[39]

The railroads, seeing Standard’s incursion into the transportation and pipeline fields, struck back and formed a subsidiary to buy and build oil refineries and pipelines.[41] Standard countered and held back its shipments and, with the help of other railroads, started a price war that dramatically reduced freight payments and caused labor unrest as well. Rockefeller eventually prevailed and the railroad sold all its oil interests to Standard. But in the aftermath of that battle, in 1879 the Commonwealth of Pennsylvania indicted Rockefeller on charges of monopolizing the oil trade, starting an avalanche of similar court proceedings in other states and making a national issue of Standard Oil’s business practices.[42]

Monopoly – Cause and Effect

CU Blog - A Lesson in History - Rockefeller Pipeline - Photo 2Standard Oil gradually gained almost complete control of oil refining and marketing in the United States through horizontal integration. In the Kerosene industry, Standard Oil replaced the old distribution systems with its own vertical system. It supplied Kerosene by tank cars that brought the fuel to local markets, and tank wagons then delivered to retail customers, thus bypassing the existing network of wholesale jobbers.[43] Despite improving the quality and availability of Kerosene products while greatly reducing their cost to the public (the price of Kerosene dropped by nearly 80% over the life of the company), Standard Oil’s business practices created intense controversy; [this is typical plutocratic behavior]. Standard’s most potent weapons against competitors were underselling, differential pricing, and secret transportation rebates.[44] The firm was attacked by journalists and politicians throughout its existence, in part for these monopolistic methods, giving momentum to the antitrust movement. By 1880, according to the New York World newspaper, Standard Oil was “the most cruel, impudent, pitiless, and grasping monopoly that ever fastened upon a country.”[45] To the critics Rockefeller replied, “In a business so large as ours….. some things are likely to be done which we cannot approve. We correct them as soon as they come to our knowledge.”[45]

At that time, many legislatures had made it difficult to incorporate in one state and operate in another. As a result, Rockefeller and his associates owned dozens of separate corporations, each of which operated in just one state; the management of the whole enterprise was rather unwieldy. In 1882, Rockefeller’s lawyers created an innovative form of corporation to centralize their holdings, giving birth to the Standard Oil Trust.[46] The “trust” was a corporation of corporations, and the entity’s size and wealth drew much attention. Nine trustees, including Rockefeller, ran the 41 companies in the trust.[46] The public and the press were immediately suspicious of this new legal entity, but other businesses seized upon the idea and emulated it, further inflaming public sentiment. Standard Oil had gained an aura of invincibility, always prevailing against competitors, critics, and political enemies. It had become the richest, biggest, most feared business in the world, seemingly immune to the boom and bust of the business cycle, consistently racking up profits year after year.[47]

Standard Oil’s vast American empire included 20,000 domestic wells, 4,000 miles of pipeline, 5,000 tank cars, and over 100,000 employees.[47] Its share of world oil refining topped out above 90% but slowly dropped to about 80% for the rest of the century.[48] In spite of the formation of the trust and its perceived immunity from all competition, by the 1880s Standard Oil had passed its peak of power over the world oil market. Rockefeller finally gave up his dream of controlling all the world’s oil refining, he admitted later, “We realized that public sentiment would be against us if we actually refined all the oil.”[48] Over time foreign competition and new finds abroad eroded his dominance. In the early 1880s, Rockefeller created one of his most important innovations. Rather than try to influence the price of crude oil directly, Standard Oil had been exercising indirect control by altering oil storage charges to suit market conditions. Rockefeller then decided to order the issuance of certificates against oil stored in its pipelines. These certificates became traded by speculators, thus creating the first oil-futures market which effectively set spot market prices from then on. The National Petroleum Exchange opened in Manhattan in late 1882 to facilitate the oil futures trading.[49]

The invention of the light bulb gradually began to erode the dominance of Kerosene for illumination. But Standard Oil adapted, developing its own European presence, expanding into natural gas production [and distribution] in the U.S., then into Gasoline for automobiles, which until then had [only] been considered a waste product.[52]

In 1887, Congress created the Interstate Commerce Commission which was tasked with enforcing equal rates for all railroad freight, but by then Standard Oil depended more on pipeline transport.[54]

– (Retrieved October 18, 2014 from: http://en.wikipedia.org/wiki/John_D._Rockefeller)

Cited References:
a.      Fortune Magazine lists the richest Americans not by the changing value of the dollar but by percentage of GDP: Rockefeller is credited with a Wealth/GDP of 1/65.
3.             “John D. and Standard Oil”. Bowling   GreenStateUniversity. Retrieved 2008-05-13.
4.             “The Richest Americans”. Fortune (CNN). Retrieved May 6, 2010.
5.             “Top 10 Richest Men of All Time”. AskMen.com. Retrieved 2007-05-29.
6.             “The Rockefellers”. PBS. Retrieved 2007-05-29.
7.             “The Wealthiest Americans Ever”. The New York Times. July 15, 2007. Retrieved 2007-07-17.
8.             Fosdick, Raymond Blaine (1989). The story of the Rockefeller Foundation. Transaction Publishers.
9.             Martin, Albro (1999), “John D. Rockefeller”, Encyclopedia Americana Page 23
10.         Chernow, Ron (1998). Titan: The Life of John D. Rockefeller, Sr. Random House, Page 52.
11.         “The 9 most amazing facts about John D. Rockefeller”. Oil Patch Asia.
12.         Richard Hofstadter et al. Sep 1, p. 45.
13.         Schultz, Duane P; Schultz, Sydney Ellen, A History of Modern Psychology, p. 128
39.         Enclycopedia.com Online Resource. “Standard Oil Company – Pipelines. Retrieved October 19, 2014 from: http://www.encyclopedia.com/topic/Standard_Oil_Company.aspx
40.         Chernow 1998, p. 171.
41.         Segall, Grant (2001). John D. Rockefeller: Anointed With Oil. OxfordUniversity Press., p. 57.
42.         Segall 2001, p. 58.
43.         Chernow 1998, p. 253.
44.         Chernow 1998, p. 258.
45.         Segall 2001, p. 60.
46.         Segall 2001, p. 61.
47.         Chernow 1998, p. 249.
48.         Segall 2001, p. 67.
49.         Chernow 1998, p. 259.
50.         Chernow 1998, p. 242.
51.         Chernow 1998, p. 246.
52.         Segall 2001, p. 68.
53.         Segall 2001, pp. 62–63.
54.         Rockefeller, John D (1984) [1909]. Random Reminiscences of Men and Events. New York: Sleepy Hollow Press and Rockefeller Archive Center, Page 48.

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