The Birth of Oil

Warm Up

• Listen to the “Beverly Hillbillies” Theme Song• Answer the following questions:

What were the 2 names given to oil?

Why was it called Black Gold ? Why was it called Texas Tea ?

Search for Oil• The demand for oil had risen dramatically

after scientists had developed kerosene in the mid-1800’s.

• 19th Century – oil was found, but there was little demand for it

• Petroleum is a dark thick liquid fossil fuel• Fossil fuel is a fuel formed underground

from plant and animal remains.

The Search for Oil

• Drake’s success led others to search for oil.

• 1866: Melrose Petroleum Oil Company drilled the first successful oil well in East Texas

• Lyne T. Barret, a Civil War veteran, drilled for oil outside Nacogdoches and struck oil at 106 feet.

• George Dullnig accidentally struck oil while drilling for water in Bexar County.

The Search for Oil

• 1894: Oil is found in Corsicana & drilling is encouraged in East Texas.

• drillers searching for water in Corsicana struck oil.

• Corsicana was now dotted with oil derricks and produced 1,450 barrels of oil in 1896.

• To process the oil, business leaders constructed refineries.

Spindletop

A discovery that changed Texas forever

The Spindletop Strike• Patillo Higgins, a brick factory

owner believed that oil would be found under a salt dome on Spindletop Hill (or Big Hill)

• A salt dome is an underground formation that often traps oil and natural gases.

The Spindletop Strike

• Higgins ran an advertisement calling for a drilling engineer and Anthony Lucas responded.

• He agreed that oil was probably beneath Spindletop Hill.

• He started drilling there in June 1900 and found traces of oil, but his equipment was not strong enough to continue

The Spindletop Strike

• After finding business leaders willing to invest in new equipment, Lucas continued drilling.

• On January 10, 1901, Lucas struck oil, Texas was changed forever

• Jan. 10, 1901 - Spindletop• Over the next nine days some

800,000 barrels of oil shot out of Spindletop until workers could cap the gusher.

• It could be seen 10 miles away.

News of the gusher spread around the world.

New people and new industries came to Texas almost overnight.

Analyze Data What was the most significant result of the discovery of oil at Spindletop? Cite Evidence What data supports your evaluation?

Boom and Bust after Spindletop• Discovery at Spindletop led to a boom in

the Texas economy and created jobs• Oil drillers rushed to the area• Population of Beaumont swelled by

nearly 40,000• 1902- 20% of the oil produced in the

U.S. came from Spindletop• Spindletop began the first of many oil

booms in Texas• Large quantities of oil produced, the

supply outpaced the national demand; prices dropped

Boom and Bust after Spindletop.

• The discovery of this huge oil field soon affected oil prices

• With large quantities of oil being produced the supply of oil outpaced the national demand.

• As a result the price of oil dropped.

• The rush of oil companies drilling oil at Spindletop also drained its oil reserves.

Boom and Bust at Spindletop• Most companies formed went out of

business when their wells dried up.• Of those companies that survived, several

grew into major businesses. • The Texas Company became Texaco• The Magnolia Petroleum Company and the

Humble Oil Company were bought by the Standard Oil Company.

• J.M. Guffey, A.W. Mellon and R.B. Mellon founded the Gulf Oil Company.

• These companies employed thousands of Texans and boosted the state’s economy

• Natural gas was also produced by the oil fields

Boom and Bust Cycles

• Agriculture was the leading industry• Expansion of urban areas created demand of agricultural products• The value of agricultural products increased• Farmers increase production by using new machines • Prices dropped because too many agricultural products flooded the market

MAJOR OIL AND NATURAL GAS DISCOVERIES, 1900–1940

Wildcatters and New Oil Fields

• The Spindletop strike lured thousands to Beaumont.

• Some of these companies were owned by wildcatters

• Wildcatters: independent oil operators who searched for new fields.

Wildcatters and New Oil Fields

• These entrepreneurs saved and borrowed money to invest in the oil business.

• Wildcatters competed with each other to find salt domes in the Gulf Coast Plains.

• Oil was found at Sour Lake, 20 miles outside of Beaumont.

Wildcatters and New Oil Fields

• Overdrilling led to a drop in underground pressure, making further oil drilling difficult.

• By the end of 1903, more than half of the wells at Sour Lake were abandoned

• Oil production extend beyond the Gulf Coast to North Texas.

Wildcatters and New Oil Fields• After success was found in North Texas,

oil companies began drilling in the Texas Panhandle. Oil was found in 1921.

• Oil was also discovered in the Permian Basin region of West Texas also in 1921.

• An oil strike in East Texas gave the oil industry its biggest surprise.

• Geologists had claimed that there was little oil in East Texas north of the Gulf Coast.

• 1920s: New oil fields were found in East & West Texas

Oil Business is Big Business

• As more oil and gas fields were discovered, the Texas oil industry grew into a big business.

• Some Texas oil companies began to use a business strategy called vertical integration – owning the businesses involved in each step of the manufacturing process

• Oil companies might expand into drilling production and refining..

• They also bought items needed for business such as barges and railroad tanker cars.

Oil Business is Big Business

• Most oil companies also practiced horizontal integration- owning many businesses in a particular field.

• The larger oil companies would own refineries, sharing supplies and resources to make their businesses run more efficient.

Equipment of Oil Drilling

•Derricks are the towers that support drilling equipment.

Oil Well well or shaft drilled through rock, from which petroleum is drawn.

Once you get it out of the ground, then what?

Storage

Then ya gots ta’ MOVE IT!Transportation!

Now, move it where?

Where is crude oil turned into gasoline?

• A refinery is a factory where crud oil from the ground is refined and made into products.

Off Shore Drilling

Pipeline

A long pipe, typically underground, for moving oil, gas, etc., over long distances.

The Process in a nutshell