Standard Oil and environmental law

The October 2014 issue of Environmental History has a lot of law in it. We'll start with Jonathan Wlasiuk's "A Company Town on Common Waters: Standard Oil in the Calumet". Wlasiuk writes:

Although the twentieth-century American environmental movement was punctuated by the voices of critics within the modernist state, from Aldo Leopold to Ed Abbey, the predominant narrative focuses on calls for federal management of ecosystems that had been controlled by corporations and local governments since the advent of the industrial era. Environmental historians have engaged the debate over whether private or public forces bear responsibility for environmental decline by examining what Christine Meisner Rosen calls “industrial ecology” in search of the business roots of environmental degradation or, less often, rehabilitation. The federal regulatory framework of the EPA and the raft of antipollution legislation that emerged in the 1960s and 1970s was the culmination, not the beginning, of both federal investigations of public health concerns related to industry dating back to the New Deal era and the failure of a cluster of state oversight, local control, and free market solutions. Betsy Mendelsohn has argued that these regulatory precursors are important because they “established the legal setting for the modern environmental law movement that culminated in NEPA in 1969.” A significant chapter in this transition occurred on the Great Lakes in the twentieth century. The industrial ecology of Lake Michigan reveals the failure of market solutions and local control over the environment: corporations found little incentive to protect the quality of common waters and Lake Michigan collected the ecological consequences from polities severed by state boundaries.

This article examines the growth of federal regulatory power by analyzing a turning point in the ecology of the Calumet region on the Illinois-Indiana border and Lake Michigan. In 1889 Standard Oil transferred the heart of its domestic manufacturing empire from Cleveland, Ohio, to Whiting, Indiana, where it constructed the largest oil refinery in the world. Along the lakeshore of northwest Indiana, Standard Oil began an experiment to reorganize its petroleum empire on the principles of scientific management. For nearly eighty years, the company lived the libertarian dream of freedom from government regulation and extended the logic of scientific efficiency to the control of labor and the environment. In private interviews Rockefeller revealed the guiding ethos of his empire: “I shall hail the day when our watchword shall be efficiency, as applied to labor, to people in all positions.” As industry flocked to the Calumet region and reached a critical mass in the early twentieth century, the consequences of industrial efficiency washed down the Calumet River and into the ecology of Lake Michigan.

Chicago Park District employee Philip Saeli sprays
deodorant on dead alewives at Montrose harbor in July 1967.
Bob Langer, photographer. Courtesy of Sun-Times Media.

When water pollution drifted over state boundaries, a growing awareness of the inability of local and even state governments to control industry developed into calls for wholesale reform by midcentury. As Hugh Gorman has argued, postwar federal government mandates redefined corporate efficiency “from a guiding ethic rooted solely in the efficient use of resources to one that recognizes the need to comply with regulations based on environmental objectives.” The corporate ecology of Standard Oil on Lake Michigan reveals how a commitment to technological control and efficiency produced an environmental collapse that transformed Lake Michigan and threatened the public health of millions of Americans. Although the federal government intervened by the late 1960s, their caution in deferring to local, state, and interstate solutions challenges [James] Scott’s characterization of an aggressive “administrative ordering of nature and society.” In the Calumet region, this description better fits the actions of industrial corporations. 

Among other interesting points, here is Wlasiuk putting a renowned court decision on the public trust in context:

Chicago won stringent protection of public riparian rights in the landmark US Supreme Court decision Illinois Central Railroad Company v. Illinois (1892), but with corporations firmly in control of Calumet politics, development of the lakeshore continued unabated on the Indiana side of the border. In 1907 the General Assembly of Indiana passed an act declaring “the owner … of land bordering upon the waters of Lake Michigan shall have the right to fill in, reclaim and own the submerged land adjacent to and within the width of his land … and may build docks, wharves and other structures thereupon for industrial … purposes.” The lakeshore had now been legally severed from its ecological role and remade into property as “sandsuckers,” and steam shovels belched out new real estate in the now crowded Calumet region.

There's lots more here, but I'll skip to an excerpt from the Conclusion:

The problem of the commons remains a critical challenge to the environmental stability of industrial economies. Free market environmentalists such as Jonathan Adler and Pierre Desrochers argue that so long as corporations are “free to indulge in creative experiments,” the profit motive will encourage them to “create wealth out of waste.” But as the Frasch process for sweetening sulfuric Lima crude proved, closing industrial waste loops can introduce new hazards to the workplace and the environment. The price of economic growth and increased efficiency was the degradation of common resources that required cities such as Chicago and Hammond to expend significant public funds to protect: Chicago’s two record-shattering filtration plants cost taxpayers $460 million when completed in 1964.

The federal government did not save the environment from the mess industry and local governments made of it in the twentieth century. Instead an “environmental management state,” in the words of Adam Rome, formed in the second half of the twentieth century. Like the partnership between the military, universities, and corporations that fused, according to Ellis Hawley, the “philosophies of laissez-faire and welfare statism,” an environmental regulatory-industrial complex emerged that challenges the stark dichotomies of political rhetoric. The conferences held by the federal Department of Health, Education, and Welfare on pollution in the Great Lakes in the 1960s brought together sanitary engineers, politicians, citizen activists, and corporate representatives. Only when they failed to meet growing public expectations for clean water and air did the more aggressive EPA emerge as the solution to reform the social contract between business and communities. Before he became the first administrator of the EPA, William D. Ruckelshaus had been assigned to Indiana’s board of health as a deputy state attorney general. Despite only pursuing “flagrant pollution,” Ruckelshaus discovered the limits of state power: “But whenever we pushed a major company very hard, there was always the threat that they would move to the south where the governors said, in effect, ‘Come on down here, we don’t care, we need your business, we need jobs.’” The shift in power from local to federal oversight was neither complete nor a demonstration of wholesale reform.