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Then and now: The evolution of energy over the years

In this article:
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Yahoo Finance's Jared Blikre reports on how the energy industry has evolved since Standard Oil in 1870.

Video Transcript

BRIAN CHEUNG: Sky high gas prices means oil companies are in the spotlight now more than ever. Exxon, Shell, BP, and Marathon dominate the energy market, but before there were those four majors, there was just one-- Standard Oil. Jared Blikre joins us with a new edition of "Then and Now." Whoa, look at those "Great Gatsby"-like graphics. [INAUDIBLE] all the way back to the turn of the century. And Jared, you don't have to do your old-timey 1910s accent.

JARED BLIKRE: Oh, I can--

BRIAN CHEUNG: Tell us about what you're looking at.

JARED BLIKRE: What does a 1910 accent sound like?

BRIAN CHEUNG: Hey, you know.

JARED BLIKRE: Yeah? Old-timey?

BRIAN CHEUNG: That was the worst accent.

JARED BLIKRE: All right, I'm going to get a top hat, just like JP Morgan himself. We're not going to talk about JPMorgan.

BRIAN CHEUNG: There we go.

JARED BLIKRE: We're here to talk about someone else. That's right, 1911 to be precise. That's because the dominant oil companies of today can trace back their roots to a titan of the early 1900s, John D. Rockefeller's own Standard Oil. And Rockefeller founded the company in 1863, the true wildcat days of what would become known as black gold. And by 1904, Standard Oil controlled 91% of the oil market and 85% of final sales. Can anybody say monopoly?

Through a web of acquisitions, Standard Oil Trust eventually would govern around 40 corporations in total, with 14 being owned by Standard Oil completely. Standard Oil also holds the title of being the first billion dollar company in history, with Rockefeller's own fortune eventually reaching $900 million. Guess what? Today, that would be around $24.7 billion. That's right, Elon Musk would still be richer than John D. Rockefeller.

But despite it being the biggest company in the world, at its height, Standard Oil was never listed on the New York Stock Exchange. Shares were only ever traded over the counter or on the New York curb. Unfortunately for John D. Rockefeller, Standard Oil never got to see the automobile of-- excuse me, the automobile boom of the 1920s. The US government stepped in and forced the company to break up in 1911 under the Sherman Antitrust Act.

And here's how that shook out. Standard Oil was split into 34 separate companies. And those included Standard Oil of New Jersey, New York, Ohio, Indiana, California, and Kentucky. As you can see here, through a series of mergers and acquisitions, those companies eventually combined into the four major oil companies we have today. And Brian, that is ExxonMobil, BP, Marathon, and Chevron. So here's how the descendants of Standard Oil are trading today. Look at this green on the screen.

BRIAN CHEUNG: That's a lot of green.

JARED BLIKRE: Yeah, Exxon.

BRIAN CHEUNG: That's a lot of green.

JARED BLIKRE: I mean, the original, the OG. That's up--

BRIAN CHEUNG: Yeah, take the OG, if you will.

JARED BLIKRE: Yeah, well, let's take a 20-year view because we can see Exxon was actually-- it's right back up to its highs, which we had in 2014. You go to a max chart. Now, Exxon used to be one of the biggest companies in the world. Apple took that over in 2013.

BRIAN CHEUNG: 1,400% higher. That's kind of hard to process here.

JARED BLIKRE: All you had to do was invest in 1987, I think.

BRIAN CHEUNG: What are the other-- so, as you mentioned, it was kind of fragmented into a number of other companies as well. So is Exxon the best of them or--

JARED BLIKRE: The best? I mean, they're up 62%. Maybe that's the best. We have Chevron here, too. This is a max chart. You can see, it broke to record highs. Exxon is still trying to do that, I believe. I don't think it's gotten quite there yet. We also have Shell. That's up 37% this year alone. And you can see, it's been going-- it's pretty much been trading sideways for the last 25 years. Finally, I do want to take a look at BP, British Petroleum. And that has been trending down.

So a lot of these companies just kind of still trending down. We can look at another one. This is not one of the majors, but this is Warren Buffett's favorite oil company, I think. That is up 395%, just reclaiming the territory it lost about 10 years ago.

BRIAN CHEUNG: Right. You know what I was going for earlier? I was going for, like, that pre '19, roaring 20s type of accent.

JARED BLIKRE: OK.

BRIAN CHEUNG: You know, why, I ought to-- you know?

JARED BLIKRE: Oh, "Great Gatsby."

BRIAN CHEUNG: Yeah, yeah.

JARED BLIKRE: I love the Great--

BRIAN CHEUNG: You know, old sport, you know, with the newspaper caps?

JARED BLIKRE: You got it. I was going to say old sport, but you beat me to it.

BRIAN CHEUNG: Yeah, we don't do impressions here on Yahoo Finance.

JARED BLIKRE: I do them terribly. So that's why I don't do them.

BRIAN CHEUNG: We'll stick with that for at least right now. Coming up--