Today’s hydraulic fractionation (fracing) is considered injurious to the environment by its opponents who prefer a state-of-nature and less energy to industrialization and more energy in free market settings. As with so many other technologies, today’s methods are far less invasive and safer than earlier-generation technology. A case in point is the 19th century’s oil-well torpedoing.
In the first years of oil production flowing wells were sometimes hindered by a waxy substance, paraffin, left by crude oil in the well tubing and well bottom. Early efforts to remove residue involved injecting steam, boiling liquids, and air down a well’s tubing. These mildly successful techniques were then replaced by a far superior alternative – oil well torpedoing. 
Gun powder explosions in water wells had been documented as early as 1808, and between 1860 and 1864, the technique was in use with oil wells as well. Despite such documented early use, Civil War Colonel E. A. L. Roberts claimed to have discovered the idea in 1862 at the Battle of Fredericksburg after witnessing the results of cannon fire into a water canal.
Government Monopoly Patent
On November 18, 1864, Roberts applied to the U.S. Patent Office for “a process of increasing the productiveness of oil-wells by causing an explosion of gunpowder or its equivalent at or near the oil-bearing point, in connection with superincumbent fluid-pampering.”  Despite similar patent applications from several well-shooting practitioners, two years later Roberts received “the patent that was to become a grievous monopoly.” 
In the same year his legal monopoly was issued, Roberts opened the Roberts Petroleum Torpedo Company in New York to manufacture bombs for use in the Pennsylvania oil region. He charged monopoly prices for his services. With production costs between $15 and $20 per torpedo, he charged from $100 to $200 per torpedo and a one-fifteenth royalty on increased output after the explosion.
Would-be competitors and disgruntled oil operators formed the Producers Union Association, raised $50,000 for legal expenses, and challenged the patent in U.S. District Court. Their challenge was denied in 1871.
Nevertheless, competition arose as Roberts’ exorbitant prices attracted a black market of moonlighters who risked their lives by strapping explosives to their backs to lower into wells for discharge under the cover of darkness. Not only was this done more cheaply, which forced Roberts to reduce his prices, new innovative techniques were introduced by the nocturnal monopoly breakers.
In response, Roberts hired a network of informants, which resulted in nearly two thousand arrests. Many were jailed, and settlements added to Roberts’ company coffers.
With his patent reissued in 1873 and again upheld in court despite a strong case documenting well-shootings prior to 1864, the scope of the government grant was narrowed and legal competition began to emerge by 1880.
A year later, E. A. L. Roberts – the man responsible for more litigation than any other person in U.S. history up until his time – died, leaving behind a great fortune memorialized by a torpedo-shaped tombstone above his grave.
The torpedo innovation represented a boon for oil production. Recognized in 1866 by the editor of Scientific American as the most beneficial technique known to enhance recovery, it not only rejuvenated pumping wells but turned near-miss dry holes into producing properties. 
Nonetheless, the Roberts patent was a government intervention in the petroleum market. Going beyond the legitimate bounds of common law copyright protection, it ignored the fact of independent discovery and prior use. Moreover, the patent was given for a general idea rather that a specific technological innovation. Thus when nitro-glycerin replaced gun powder and new drop methods were adopted, some of which originated with the moonlighters, Roberts was protected by the original wording of his patent.
The consequences of the torpedo monopoly were both subtle and pronounced. By unnecessarily increasing oil production costs, lower supply and higher prices resulted for consumers of petroleum products, and lower economic rents accrued to royalty owners and well operators. This was subtle compared to the other consequence – clandestine operations leading to deaths and injuries.
The precise number of fatalities between Roberts’ daytime operators and the nighttime black marketeers is not well documented. But available evidence suggests a greater incidence of mishap for the latter group than the former group. 
If so, this government intervention in the natural competitive market ranks among the most consequential of the 19th century.
 This discussion comes from John McLaurin, Sketches in Crude Oil (Harrisburg: John McLaurin, 1896), pp. 383-87; and Harold Williamson and Arnold Daum, The American Petroleum Industry, vol. 1, pp. 149-56.
 McLaurin, p. 385.
 Ibid., p. 386.
 Harold Williamson and Arnold Daum, vol. 1, p. 154.
 See McLaurin, pp. 390-98.
This post is taken from Robert Bradley, Oil, Gas, and Government: The U.S. Experience (1996), pp. 585–57. MasterResource will occasionally publish such historical material to add perspective on today’s industry and public-policy debate.