Paul Sabin. Crude Politics: The California Oil Market, 1900-1940. Berkeley, CA: University of California Press, 2005.
xxii + 307 pp. ISBN 0-520-24198-3 (cloth).
Champions of the oil industry have long claimed that oil is the cheapest form of energy. Why is it so cheap? The conventional
answer emphasizes oil’s natural abundance and the wonders of market supply and demand. Most historians who study the
industry at least implicitly accept this explanation. But is not resource abundance a socially constructed concept? Can we so
easily isolate market forces from politics and government policy in explaining the cost and price of oil? These are the big questions
posed by Paul Sabin in his expertly researched and cleverly titled study, Crude Politics.
Based on a wide-ranging investigation into industry periodicals, court cases, manuscript collections, government archives, and
corporate records, Sabin highlights California’s importance to scholarship on the political economy of oil. During the first several
decades of the twentieth century, California led the nation in oil production and consumption. The evolution of the state’s oil
economy was distinctive compared to other oil states, such as Texas, but also indicative of the nation’s growing dependence
on oil and automobile-based transportation. As Sabin contends, California’s unique petroleum and transportation policy set it
apart from other states, while federalism and the national political framework favored rapid oil development in California and elsewhere.
He organizes his book into four parts, the first three on the supply side of the issue and the fourth on the demand side. Part one
examines federal administrators’ struggle to retain control over public oil lands. During the 1910s, political representatives of the
oil industry helped pry open access to newly reserved federal oil lands in Southern California through fraudulent land claims that
federal courts eventually sanctioned. California oil operatives then won passage of the Mineral Leasing Act of 1920, which
accelerated oil development on federal lands, despite an ostensible federal commitment to slowing it.
Part two examines the political maneuvering to open up state-owned property to drilling. Sabin offers a marvelous narrative
of the battles in the 1930s over oil development on coastal lands, from the draining of state tidelands oil by upland drilling at
Santa Barbara to the slanted drilling controversy at Huntington Beach. The referendum process distinguished California’s
petroleum politics from other states, strengthening the position of the smaller independent oil companies and their desire for
greater access and drilling, compared to majors such as Standard Oil of California, who were more concerned with long-term
price stability and thus production restraints. Without the referendum, Sabin asserts, the legislature would have resolved the
tidelands oil question more favorably toward the major oil companies. Likewise, as he discusses in part three, state political
contests among majors, independents, and allied forces in the 1930s blocked legislative attempts to regulate production. As a
result, California oil fields were depleted faster than those of Texas and Oklahoma, which implemented stricter state regulations.
Part four turns to how California’s transportation and tax policies fortified the “infrastructure of consumption” (159) for oil.
The rapid growth of gasoline consumption is often attributed to the American consumer’s individualism, love of movement,
and quest for social status, all afforded by the automobile. Sabin, however, convincingly argues that corporate-influenced state
policies shaped consumption choices. The user-financing system, under which motorists paid separate taxes and fees to fund
highway development, along with numerous other fiscal policies, funneled financial resources to roads. Jealously guarded by
motorist advocates and the oil industry, these policies disadvantaged streetcars and private railroads, and facilitated the
replacement of mass transit by highways throughout the state. Curiously, Sabin does not bolster his argument by discussing how
in the 1940s companies representing oil, auto, and tire firms systematically purchased and scrapped electric transit systems in
Los Angeles, San Francisco and elsewhere across the nation, replacing them with diesel-powered buses.
For some readers, Sabin’s broad claim that politics structures markets will be more convincing for the demand side than for supply.
Market apologists would interpret the failure to limit drilling on public lands or impose restrictions on oil production, although the result
of a political process, as a demonstration of the triumph of the free market, rather than as an intervention that shaped it. Furthermore,
one could question whether oil production on public lands was as significant as that on private lands in determining the price of California
oil. Finally, Sabin acknowledges that federal tax incentives and U.S. property law greatly influenced petroleum supply and “framed
the state’s options” (206), but he seems to avoid the implications of this observation for his argument about the primacy of state politics.
These reservations aside, Crude Politics establishes the crucial importance of state-level political forces in directing the development
of California oil. It stands as an exemplary work of business, legal, and environmental history.
Tyler Priest is the Director of Global Studies in the Bauer College of Business at the University of Houston and faculty affiliate of the UH Department of History’s Institute for Public History.