Universal Oil Products

I was prompted to write this article after the recent death of Don Nichols, who owned the Shadow Formula 1 team in the 1970s. I remember from my youth, the F1 cars with UOP sponsorship.

UOP is short for Universal Oil Products, a company founded in 1914 on the back of inventions in chemical cracking developed by Jesse Dubbs and his son Carbon. Cracking is the process by which complex organic molecules are broken down into single organic molecules. In the oil industry, that means taking crude oil and effectively splitting it into usable products.

Dubbs Senior was born in Pennsylvania where oil was found and named his son after the basic ingredient of the black stuff! The Dubbs family were descendants of Dutch chemists and there was a logical career path in the State! In 1909, Jesse Dubbs had developed a way to demulsify crude oil making heavy fuel oil and asphalt – useful for road building. However, the byproduct was gasoline (petrol) and lots of it, about 4 times the amount from the refining processes of the day!

Needing money to finance a business venture, Carbon Dubbs met with a US meatpacking magnate, J. Ogden Armour, who was heavily involved in power generation and the usage of that power through bankrolling several aviation and railway projects. Things get murky now. Armour gave the design paperwork to his patent attorney, Frank Belknap who saw a big opportunity to help Armour beat his arch rival, John D. Rockefeller, the founder of Standard Oil.

In 1912, William M. Burton, a chemist at Standard Oil had patented a similar process, however the Dubbs process could be proven to have been been in place prior to that patent being granted. This gave Armour the ability to demand payments from Standard Oil for using a process that he had the patent for.

Armour bought the rights to the Dubbs research, created the National Hydrocarbon Company and promptly launched the first of many lawsuits! Jesse Dubbs retired immediately, however Carbon stayed with the company secretly evolving his father’s work. Up to this point, the company was simply fighting patent rights and demanding money from the oil companies who used the Burton process. When Carbon showed his developments – moving some refined fuel back into the crude oil and using a higher temperature for the thermal cracking producing a dramatic increase in the output – it changed the focus of the company.

The National Hydrocarbon Company was renamed Universal Oil Products and became a refining licenser where they sold royalty licences to the oil companies based on production quantity. This was good because the global sale of licences from the “Clean Circulation” refining process helped fund more lawsuits against the companies using the older processes – a win/win situation for UOP!

The lawsuits ultimately caused another big change in the company. After gaining a judgment in their favour, UOP were bought by the defendants! The Shell Oil Company in conjunction with the Standard Oil Company of California created a consortium called the United Gasoline Corporation and spread the ownership to include the Standard Oil Company of Indiana, the Standard Oil Company of New Jersey, the Texas Company, the Atlantic Refining Company and Gulf Oil. To stop antitrust lawsuits – remember all those Standard Oil companies used to be one entity until the Government broke it up – UOP continued to develop the refining process for many other oil companies. However the litigation that underpinned UOP’s revenues now stopped.

During the early 1930s a Russian scientist was employed – Vladimir Ipatieff. His first claim to fame was that before he fled from Russia, he was a buddy of Czar Nicholas II and it was in his old house that the royal family met their deaths. His second claim to fame was the development, at UOP, of ever higher quality fuels, higher outputs from the refining process and even synthetic rubber. During the Second World War, Ipatieff’s work and the Government’s decision to pool patents under UOP meant that the oil companies were getting jittery again, so to alleviate their concerns, the consortium put UOP into a trust fund that supported the American Chemical Society (ACS).

After the war, UOPs researchers took yet another step forward in the amount of high quality fuel produced from the refining process and this lead to new licences being sold – at a time when countries were breaking away from the old imperial shackles and starting their own national oil companies, subsequently buying ever more licences from UOP!

This caused another problem – the revenues being created meant that the ACS was in danger of losing its non-profit status! So they created a public offering and sold UOP off, still retaining some shares though. With this freedom, UOP ran around gobbling up all sorts of non-core businesses and products to try and diversify and protect themselves against the fluctuations of the oil market – mostly caused by geopolitical instability.

By the mid 1970s, the company was acquired in two stages by the Signal Company, whose foundation was also in the oil industry. Signal sold off most of the non core businesses to get UOP back to concentrating on researching oil refining technologies. In the mid 1980s, Signal merged with the Allied Chemical Corporation and put UOP into one of its materials divisions only to sell off part of the ownership to Union Carbide.

AlliedSignal, as it had become, then gobbled up Honeywell (retaining that name) and Union Carbide was taken by Dow Chemicals. This lead to an agreement in 2005 for Honeywell to buy out Dow from UOP and bring it under their full control.
All the while that the ownership was bouncing around, UOP continued to develop refining techniques for the oil and natural gas industries and is now researching and developing bio fuels as well. They are one of the unsung heroes of the automotive and aviation industries – without their constant research we wouldn’t have had the expansion of personal transportation and we certainly wouldn’t have the choices of which clean fuels to use as carbon based fuels get slowly squeezed out of the market.