Imperial Standard: Imperial Oil, Exxon, and the Canadian Oil Industry from 1880 by Graham D. Taylor (review)

Despite the dominant role foreign multinational corporations and their domestic subsidiaries have played in Canada’s economic development, relatively few have been the subject of scholarly historical monographs. Graham D. Taylor’s comprehensive and engaging business history of the Imperial Oil Company is therefore a welcome addition to an otherwise surprisingly sparse literature. Taylor claims, not unreasonably, that Imperial Oil, which became the country’s largest petroleum company and remains “among the top ten non-financial companies in Canada, ranked by revenues and assets” (1) was as integral to national economic development in the twentieth century as the Canadian Pacific Railway and the Hudson’s Bay Company had been in earlier eras.

Founded in 1880, Imperial Oil was acquired by the Rockefeller-controlled Standard Oil Company in 1899. When the Standard Oil Trust was dissolved in 1911, Imperial Oil became a subsidiary of Standard Oil of New Jersey (renamed Exxon in 1972). Taylor details Imperial Oil’s evolution as an integrated oil company in Canada and its supporting role in Jersey Standard’s aggressive campaign of continental, and, eventually, global, expansion. Documenting how Imperial Oil and Jersey Standard each navigated the oil industry’s recurring booms and busts over the span of a century, Taylor’s principal historiographical contribution is in advancing our understanding of the extent to which multinational enterprises either impeded or empowered their Canadian subsidiaries.

Taylor demonstrates that, on balance, Jersey Standard’s influence over Imperial Oil was positive and beneficial. At times, such as during the Great Depression of the 1930s, Jersey Standard’s persistent demand for dividends hindered Imperial’s ability to reinvest profits in new growth opportunities. The parent company also kept Imperial dependent on it for accessing some developing technologies and appears to have been responsible for delaying Imperial’s expansion into petrochemicals. Yet, by the end of the Second World War, when Imperial boasted a nation-wide refinery and distribution system and controlled half of the Canadian petroleum market, Jersey Standard had stabilized dividend payments in accordance with Imperial’s reinvestment needs. Moreover, in time, it provided Imperial Oil with access to technological improvements in refining and product development as well as with assistance in sales and marketing, including substantial investments while establishing the Esso brand in Canada.

Although Imperial Oil was, by any corporate measure, a Canadian success story, Taylor is not effusive in dispensing praise. He characterizes Imperial as “big, cautious, bureaucratic, [and] risk-averse”; in other words, “the quintessential ‘Canadian’ business enterprise” (11). Nor was it “the best managed” or “the most entrepreneurial company in the industry” (106). Taylor attributes Imperial’s rise, resiliency, and dominance in the Canadian oil industry in large part to its ties with Standard Oil/Exxon, which, as the world’s most powerful energy company, kept Imperial closely and cautiously bound to its own strategic goals. But he also credits Imperial Oil with exercising sufficient autonomy as a vertically integrated Canadian corporation that it could credibly refute any critics who hoped to expose it “as a satrap of Rockefeller’s oil empire or an agent of American economic imperialism” (271).

One of Canada’s foremost business historians, Taylor has produced a meticulously detailed and well-illustrated book that is useful to scholars and accessible to a general readership. Particularly noteworthy are his concise portrayals of how Jersey Standard and Imperial Oil facilitated knowledge transfers throughout their respective managerial hierarchies – the cast of characters in this story is large – by shifting senior executives between the two organizations. Taylor is also effective at explaining to a lay audience the evolving technologies of oil extraction. Especially relevant to contemporary debates in Canada over oil sands extraction and pipeline construction is Taylor’s account of how Imperial Oil’s generally positive relationship with the federal government deteriorated by the 1960s and 1970s once politicians and their bureaucrats ceased viewing the oil industry primarily through the...