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The Discovery of Oil
When Oil Was First Discovered and the Products Made From It: Fuels, Gasoline, By-Products, and a Visual Timeline
Oil (petroleum) has been known and used for thousands of years from natural seeps, but the modern commercial petroleum industry began in the mid-19th century. This page covers the history of discovery and use, the refining process that turns crude oil into gasoline, heating oil, and other products, the by-products that result, and a visual timeline. It connects to water heater history because distillate fuel oil (heating oil) has been used in oil-fired boilers and water heaters (especially in the U.S. Northeast), while propane (a hydrocarbon gas liquid from refining or natural gas processing) fuels many water heaters today. Early kerosene production also shaped the energy landscape that later supported modern fuel-based heating.
Ancient and Early Uses of Oil
People observed and collected oil and bitumen (asphalt) from surface seeps long before drilled wells. Archaeological evidence shows bitumen used as an adhesive on stone tools as early as ~40,000–70,000 years ago. In Mesopotamia more than 5,000 years ago, Sumerians, Assyrians, and Babylonians used bitumen from Euphrates seeps for waterproofing boats, mortar in construction, and roads. Egyptians used it in mummification and boat sealing. In China, oil wells were drilled by AD 347 (or earlier) using bits on bamboo poles, reaching depths of hundreds of feet; the oil served for fuel, lighting, and salt evaporation. Baku (present-day Azerbaijan) and other sites had long-known seeps used for medicine, lighting, and fuel. These were opportunistic uses of surface deposits, not a large-scale industry.
The Start of the Modern Commercial Industry
Demand for a cheaper, cleaner lamp fuel than whale oil drove commercial development in the mid-19th century. Canadian geologist and chemist Abraham Gesner developed and demonstrated a process for distilling illuminating oil (which he named kerosene) from coal, shale, and bituminous materials in the 1840s–1850s; he patented related methods and is often called a founder of the petroleum industry for this work.
In North America, James Miller Williams established the first commercial oil production in 1858 at Oil Springs, Ontario, Canada. While digging a water well, he struck free oil, refined it into illuminating oil, and developed an integrated production and refining operation—the earliest commercial oil well and boom in North America.
The well most often cited as launching the modern U.S. petroleum industry is Edwin L. Drake’s near Titusville, Pennsylvania. On August 27, 1859, Drake’s crew struck oil at a depth of 69.5 feet using cable-tool drilling adapted from salt wells, a steam engine, a wooden derrick, and a drive pipe to keep out water from Oil Creek. The well produced roughly 15–25 barrels per day initially. Its success proved oil could be extracted in commercial quantities by drilling, triggered an oil rush, and supplied existing coal-oil refineries with feedstock for kerosene. Earlier incidental oil from brine wells and surface seeps existed, but Drake’s targeted, successful drilled well and the resulting investment boom mark the conventional start of the modern industry.
The 1901 Spindletop gusher near Beaumont, Texas (the Lucas well at ~1,139 feet), produced an estimated 100,000 barrels per day for nine days before being controlled. This massive salt-dome discovery shifted the center of U.S. production to the Gulf Coast, made oil abundant and cheap enough for widespread fuel use, and helped create companies such as Gulf and Texaco.
How Crude Oil Becomes Products
Crude oil is a mixture of hydrocarbons refined primarily by fractional distillation in a distillation tower (with additional processes such as catalytic cracking, reforming, and hydrotreating). Heated crude vaporizes; as vapor rises and cools, different fractions condense at different heights and are collected. Lighter fractions yield gasoline and naphtha; middle fractions yield kerosene, jet fuel, and distillates (diesel and heating oil); heavier fractions yield lubricants, residual fuel oil, asphalt, and petroleum coke. Cracking breaks larger molecules into smaller ones to increase yields of gasoline and lighter products. A 42-gallon barrel of crude typically yields about 45 gallons of finished products due to processing gain (lower-density outputs).
Products from a Barrel of Oil (Approximate U.S. Averages)
U.S. Energy Information Administration data for recent years show roughly these yields from a 42-gallon barrel (totals exceed 42 gallons because of processing gain):
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Finished motor gasoline: ~19.5–20 gallons (largest share; ~43–46% of U.S. petroleum consumption).
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Distillate fuel oil (diesel + heating oil): ~12–12.5 gallons.
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Kerosene-type jet fuel: ~4.4 gallons.
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Hydrocarbon gas liquids (propane, butane, etc.): ~1.5+ gallons.
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Petroleum coke: ~2 gallons.
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Asphalt and road oil: ~0.8 gallons.
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Residual fuel oil, lubricants, naphtha feedstocks, and miscellaneous products make up the remainder.
Gasoline was initially a hazardous by-product of kerosene refining—highly volatile and flammable, it was often burned off or discarded. It gained value with the automobile in the 1890s–1910s. Thermal and later catalytic cracking processes (commercialized around 1913 and afterward) greatly increased gasoline yields. Today it is the dominant transportation fuel.
Heating oil (a distillate fuel oil, closely related to diesel) is used for space heating and, in smaller amounts, water heating in some residential and commercial systems, particularly in the Northeast United States. Propane (an LPG/hydrocarbon gas liquid) is a common fuel for water heaters in many areas. Residual fuel oil and other heavy fractions have industrial heating uses. These petroleum-derived fuels joined coal, wood, and later natural gas and electricity in the evolution of water heating systems.
By-Products and Petrochemicals
Refining also produces co-products and feedstocks rather than pure “waste.” Petroleum coke is used in aluminum smelting and as industrial fuel. Sulfur is recovered and sold. Naphtha and other streams feed the petrochemical industry, which produces plastics, synthetic rubber, solvents, fertilizers, pharmaceuticals, clothing fibers, and thousands of everyday items (aspirin, tires, packaging, detergents, etc.). Not every product is a minor by-product—many are intentionally maximized co-products.
Visual Timeline of Oil Discovery and Use
The following is a concise vertical timeline suitable for webpage implementation (CSS vertical line with dated markers works well; public-domain images of the Drake well derrick or Spindletop gusher can illustrate key points).
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~40,000–70,000 BCE — Bitumen used as adhesive on tools (early human/Neanderthal evidence).
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~5,000+ years ago — Mesopotamian (Sumerian, Assyrian, Babylonian) use of seeps for waterproofing boats, mortar, and construction; Egyptian uses in mummification and sealing.
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AD 347 (or earlier) — Chinese drilled oil wells with bamboo poles for fuel and salt production (depths to hundreds of feet).
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Medieval–early modern period — Continued local use of seeps (e.g., Baku “eternal fires,” medicinal and lighting uses); Marco Polo and others noted oil collection.
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1840s–1850s — Abraham Gesner develops and demonstrates kerosene distillation from coal/bituminous materials; patents and early commercial kerosene production for lamps (replacing whale oil).
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1858 — James Miller Williams strikes commercial oil while digging a water well at Oil Springs, Ontario; first commercial oil production and refining in North America.
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August 27, 1859 — Edwin Drake’s well at Titusville, Pennsylvania, strikes oil at 69.5 feet; launches the U.S. petroleum boom and supplies kerosene refineries. (Often called the birth of the modern industry due to scale and investment.)
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1860s–1890s — Rapid expansion of oil fields and refining; kerosene dominates lighting; gasoline remains largely a discarded or low-value fraction; early oil-fired heating equipment appears.
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1901 — Spindletop gusher (Lucas well) near Beaumont, Texas, produces ~100,000 barrels/day; abundance of cheap oil enables widespread fuel use and shifts industry center of gravity.
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1910s–1930s — Automobiles create massive gasoline demand; thermal cracking (Burton process ~1913) and later catalytic cracking increase gasoline and distillate yields; heating oil and residual fuels expand for boilers and heating.
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Mid-20th century onward — Modern refining maximizes transportation fuels and petrochemical feedstocks; heating oil and propane remain relevant for certain water heating and space heating applications; shift toward natural gas and electricity for most new water heaters in many regions.
Sources and Notes
Primary and reliable secondary sources include the U.S. Energy Information Administration (refinery yields and product use statistics), the American Oil & Gas Historical Society (Drake well and industry origins), Britannica and historical accounts of ancient seeps and Chinese wells, Parks Canada/Oil Museum of Canada records for the 1858 Williams well, and standard petroleum history references on Gesner, Spindletop, and refining technology. Drake’s 1859 well is the conventional marker for the start of the modern commercial U.S. industry even though earlier seeps, Chinese wells, and the 1858 Canadian commercial production existed; the distinction lies in the scale, technology, and economic boom that followed.
65,000-Year-Old Hearth Reveals Evidence That Neanderthals Produced Tar for Stone Tools in Iberia
1. Bitumen / Asphalt (the Heavy, Sticky End of the Barrel)
What it is: The thickest, heaviest material left after lighter fuels are removed. It can also appear naturally as seeps (called bitumen or asphalt).
Ancient to modern uses:
People have used natural bitumen for at least 5,000 years, and in some places as far back as 40,000+ years. In Mesopotamia (modern Iraq area), Sumerians, Assyrians, and Babylonians collected it from seeps along the Euphrates and used it to waterproof boats and baskets, glue bricks together as mortar, seal roofs and storage pits, and pave processional roads. Egyptians used it in mummification and to seal structures. Chinese and other cultures used similar sticky materials for waterproofing.
In the modern era, petroleum refineries produce large amounts of asphalt as a co-product. It is the binder that holds crushed stone together to make roads and parking lots. It also waterproofs roofs, dams, and pipes. Natural bitumen deposits (such as those in Trinidad or California seeps) were used before petroleum refining made the material cheap and abundant.
Connection to water heating:
Bitumen itself is not a fuel for water heaters. Its ancient waterproofing role, however, protected water storage vessels, irrigation channels, and baths long before modern tanks existed. Today, asphalt and related sealants help protect outdoor water pipes, tanks, and foundations from moisture.
2. Kerosene (the Early Star of Refining)
What it is: A middle-weight liquid fuel that boils between the very light fractions and the heavier oils. It was the main product early refiners wanted.
History of use:
Canadian geologist Abraham Gesner developed a practical way to distill a clean-burning illuminating oil (he named it kerosene) from coal, shale, and bituminous materials in the 1840s–1850s. Before that, people mostly used expensive whale oil, candles, or smoky alternatives for light. Kerosene lamps quickly replaced whale oil in many homes because the fuel was cheaper, cleaner-burning, and did not spoil.
After Drake’s 1859 well in Pennsylvania made crude oil widely available, refiners switched from coal/shale to petroleum as the cheaper raw material. Kerosene remained the dominant lamp fuel until electric lighting spread in the late 19th and early 20th centuries. It was also used in early portable stoves and heaters.
Connection to water heating:
Kerosene was used in some early water heaters and bath heaters, especially in areas without gas or electricity. Historical examples include small kerosene bath heaters that heated water on demand for bathing (popular in places such as Australia into the mid-20th century) and simple lamp-stove arrangements that could warm water for shaving or other household needs. Today kerosene is less common for water heating in most developed countries, but some portable or specialized heaters still accept it or closely related No. 1 fuel oil.
3. Gasoline (Once Thrown Away, Now the Biggest Product)
What it is: The light, highly flammable liquid fraction that vaporizes easily. Early refiners called it naphtha or “essence” and often treated it as a dangerous nuisance.
History of use:
When refiners distilled crude oil to make kerosene for lamps, the lightest material that came off first was too volatile to use safely in lamps. Many burned it off or dumped it. The word “gasoline” appeared in the 1860s.
The automobile changed everything. By the 1890s–1910s, inventors such as Karl Benz and others showed that this light fraction made an excellent engine fuel. Demand soared. Refiners invented cracking processes (thermal cracking around 1913, later catalytic cracking) that break heavier molecules into lighter ones, dramatically increasing the amount of gasoline obtained from each barrel. Today gasoline is the single largest product from U.S. refineries (roughly 19–20 gallons from a 42-gallon barrel).
Connection to water heating:
Gasoline is not used to heat water in normal household systems because it is too volatile and hazardous. Its historical role is indirect: the rise of automobiles and gasoline refining expanded the entire petroleum industry, which also produced the heating oils and propane later used in water heaters. Early experimental or small “oil” heaters sometimes used various light distillates, but modern safety standards keep gasoline out of water-heating equipment.
4. Distillate Fuel Oil / Heating Oil (Diesel’s Close Relative)
What it is: A middle-to-heavier liquid fraction. In practice, heating oil (especially No. 2 fuel oil) is very similar to diesel fuel; the main differences are sulfur content, dye (heating oil is often dyed red so it cannot be used tax-free on highways), and the exact specifications of the appliance that burns it.
History of use:
Once kerosene demand fell with the spread of electricity, refiners found growing markets for these heavier distillates as fuel for trucks, trains, ships, and heating. Oil burners for home furnaces and boilers became practical in the early 20th century and were widely adopted, especially in the U.S. Northeast, as a cleaner and more convenient alternative to coal.
Oil-fired water heaters (direct-fired units that burn oil under or around a tank, and indirect systems that use hot water from an oil boiler) became common in oil-heated homes. They offer high recovery rates—meaning they can reheat a large volume of water quickly—which was attractive for households that used a lot of hot water.
Connection to water heating:
This is one of the most direct links. Oil-fired water heaters heat domestic water by burning heating oil (or a closely related distillate). In a direct-fired unit, the oil flame heats the tank; in an indirect system, the home’s oil boiler heats water that then transfers heat to the domestic hot-water tank. Many oil-heat companies still market oil-fired or oil-boiler-linked water heating for its rapid recovery and reliability. Use has declined in new construction as natural gas and electricity became more common, but existing systems remain in service, particularly in the Northeast. Manufacturers’ manuals specify exact approved fuels (No. 1, No. 2, ultra-low-sulfur heating oil, or certain diesel grades); the wrong fuel can damage the burner or create safety issues.
5. Propane and Other Hydrocarbon Gas Liquids (LPG)
What it is: Light gases (mainly propane and butane) that are compressed into liquid form for storage and transport. They come from both oil refining and natural-gas processing.
History of use:
Chemist Walter Snelling identified and isolated propane around 1910 while investigating vapors from a gasoline tank. By 1912 he had made early domestic installations. Commercial growth was slow at first; early uses included metal-cutting torches. By the late 1920s and 1930s, appliances (ranges, water heaters, refrigerators) appeared. The 1932 Los Angeles Olympics used propane for cooking and water heating in the Olympic Village. An odorant was added so leaks could be smelled. Sales grew rapidly after World War II as rural and suburban homes without natural-gas pipelines adopted propane for cooking, space heating, and water heating.
Connection to water heating:
Propane is a major fuel for water heaters today, especially in areas without natural-gas service. Both storage-tank and tankless (on-demand) propane water heaters are widely available. They heat water quickly, recover fast, and are often more economical than electric resistance heating. Many manufacturers offer models that can be converted between natural gas and propane with the proper orifice and regulator kit. Propane water heaters appear in homes, RVs, cabins, and commercial settings. Historical records show propane water heaters were already being sold and installed by the 1930s–1940s, and sales of propane water heaters rose sharply in the postwar years.
6. Lubricants and Residual Fuel Oil
Lubricants are refined oils used to reduce friction in engines, pumps, and machinery. Early petroleum lubricants replaced animal and vegetable oils for many industrial uses. Residual fuel oil (also called bunker fuel or heavy fuel oil) is a thick leftover used in large boilers, ships, and some power plants.
Connection to water heating:
Lubricants do not heat water directly, but they keep the pumps, burners, and circulating equipment in heating systems running smoothly. Residual fuel oil has been burned in large commercial and industrial boilers that supply steam or hot water for building heat and domestic hot water. Smaller residential systems almost never use it because of its thickness and the specialized burners required.
7. Petrochemical Feedstocks and Other Co-Products
Naphtha and other streams from refining are turned into plastics, synthetic rubber, solvents, fertilizers, pharmaceuticals, and thousands of everyday materials. Petroleum coke is a solid carbon-rich material used in aluminum production and as industrial fuel. Sulfur is recovered and sold.
Connection to water heating:
These materials do not fuel water heaters, but they appear in the equipment itself—plastic tanks or components in some modern units, insulation, pipes, valves, and the vast supply chain that supports the industry. The same refining system that produces heating oil and propane also produces the chemicals that make modern water-heater manufacturing possible.
Summary: How Oil Products Serve Hot Water
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Ancient bitumen waterproofed vessels and structures that held or carried water.
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Kerosene powered early lamps and some small water heaters and bath heaters.
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Heating oil (distillate) directly fuels many oil-fired water heaters and boilers that supply hot water, especially in the Northeast.
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Propane is a leading modern fuel for both tank and tankless water heaters in homes without natural gas.
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Gasoline expanded the industry that later supplied the heating fuels.
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Other products support the machinery, infrastructure, and manufacturing around water-heating systems.
Oil’s story is therefore both a fuel story and a materials story. From sticky seeps used to seal boats thousands of years ago to the propane tank or oil burner that heats a family’s shower water today, petroleum products have helped people obtain and use hot water more conveniently and at larger scale.
Sources for these sections include the U.S. Energy Information Administration (product yields and uses), the American Oil & Gas Historical Society, historical accounts of Gesner, Drake, Williams, and Snelling, oil-heat industry materials on water heaters, and standard references on bitumen archaeology and refining history. For related site content, see the master timeline and pages on gas and oil heating technologies.