This Week June 18 to June 24
June 18, 1889 – Standard Oil Company of Indiana Incorporated
John D. Rockefeller’s Standard Oil Company establishes an Indiana-based subsidiary when Standard Oil Company of Indiana is incorporated. The company will begin processing oil the next year at a new refinery at Whiting, Indiana, southeast of Chicago.
“By the mid-1890s, the Whiting plant had become the largest refinery in the United States, handling 36,000 barrels of oil per day and accounting for nearly 20 percent of the total U.S. refining capacity” notes the Encyclopedia of Chicago. “By 1910, when it was connected by pipeline to oil fields in Kansas and Oklahoma, as well as Ohio and Indiana, the Whiting facility had about 2,400 workers.”
In 1911, when Rockefeller is forced to break up his oil holdings, Standard of Indiana, with its main offices in downtown Chicago, emerges as an independent company.
Amoco-branded stations begin opening in the late 1950s. By 1982, its refineries will produce 1.2 million barrels of gasoline daily and serve 18,000 domestic gasoline retail outlets. That year Standard’s two largest refineries are located in Whiting and Texas City, Texas.
Standard Oil of Indiana will become Amoco Corporation in 1985, which merges with British Petroleum (BP) in 1998 – the world’s largest industrial merger at that time.
June 18, 1946 - Truman creates National Petroleum Council
The National Petroleum Council, a federally chartered and privately funded advisory committee, is established by the Secretary of the Interior at the request of President Harry S. Truman to make recommendations with respect to any matter relating to oil and natural gas.
“President Truman stated in a letter to the Secretary of the Interior that he had been impressed by the contribution made through industry/government cooperation to the success of the World War II petroleum program,” notes the council’s website. “He felt that it would be beneficial if this close relationship were to be continued and suggested that the Secretary of the Interior establish an industry organization to advise the Secretary on oil and natural gas matters.”
Today the council is chartered by the Secretary of Energy, under the provisions of the Federal Advisory Committee Act of 1972. A membership of approximately 200 is selected and appointed by the Secretary of Energy. Individual members “serve without compensation as representatives of their industry or associated interests as a whole, not as representatives of their particular companies or affiliations.”
June 20, 1977 - Oil flows in Trans-Alaskan Pipeline
After three years of construction, the Trans-Alaska Pipeline begins carrying oil 789 miles from Prudhoe Bay to Prince William Sound. The oil arrives 38 days later, culminating the world’s largest privately funded construction project at the time. A deciding vote in the U.S. Senate by Vice President Spiro Agnew had passed the Trans-Alaska Pipeline Authorization Act on July 17, 1973.
The 48-inch diameter pipeline system costs $8 billion, including terminal and pump stations. Its annual flow will account for about 20 percent of U.S. oil production. Oil production tax revenues will earn Alaska $50 billion by 2002. Above-ground sections of the pipeline (420 miles) are built in a zigzag configuration to allow for expansion or contraction of the pipe because of temperature changes. The design also allows for pipeline movement caused by an earthquake.
By 2009, the pipeline will have carried almost 16 billion barrels of oil from the giant Prudhoe Bay field, which was discovered on March 12, 1968, by Atlantic Richfield (ARCO) and Exxon 250 miles north of the Arctic Circle. Discovery of Alaska’s first commercial oilfield took place near Katella in 1902.
June 21, 1893 – Birth of Electric Submersible Pump Inventor
Armais Arutunoff, inventor of a revolutionary oilfield electric submersible pump, is born to Armenian parents in Tiflis, Russia. He will develop an electrical centrifugal submersible pump in 1916. But after emigrating to America in 1923, Arutunoff cannot find financial support for his down-hole oil production technology.
In 1928, with the help of Phillips Petroleum Company, Arutunoff moves to Bartlesville, Oklahoma, and forms a manufacturing company. A 1936 Tulsa World article describes his idea as “an electric motor with the proportions of a slim fencepost which stands on its head at the bottom of a well and kicks oil to the surface with its feet.”
According to an online electrical submersible pump history, which further profiles the remarkable career of Arutunoff (1893-1976), his “study of power transmission showed that electrical transmission of power can be efficiently applied at nearly all conditions. His ambition was to apply the results of his study to oil drilling and improve the antiquated methods he saw in use in the early 1900s in Russia.”
At Bartlesville, the REDA Pump Company demonstrates a working model of Arutunoff’s oilfield electric submersible pump for down-hole drilling and launches his company into decades of success.
The name REDA – Russian Electrical Dynamo of Arutunoff – is the cable address of the company that the inventor originally operated in Germany. REDA submersible pumping systems today are provided by Schlumberger.
June 21, 1932 – Oklahoma “Hot Oil” Controversy
Thirty National Guardsmen march into the Oklahoma City oilfield when Governor William H. “Alfalfa Bill” Murray takes control of production by creating a proration board he controls.
In March 1933, Murray declares martial law to enforce his regulations limiting the field’s oil production — and prevent the sale or transport of oil produced in excess of the quota, often referred to as “hot oil.”
The controversy ends in April 1933 when the Oklahoma Legislature passes House Bill 481, giving the Oklahoma Corporate Commission authority to enforce its rules — and taking away much of Governor Murray’s power to regulate the oil and natural gas industry.
June 23, 1921 – Signal Hill reveals Prolific California Oilfield
A discovery at Signal Hill, California – one of the world’s most famous oil strikes – launches a drilling boom 20 miles south of Los Angeles. The wildcat well reveals the Long Beach oilfield, which eventually will produce one billion barrels of oil.
When the Alamitos No. 1 well erupts “black gold,” it announces discovery of one of California’s many prolific oilfields. The natural gas pressure is so great that the gusher rises 114 feet. The well, drilled to 3,114 feet, produces almost 600 barrels a day when it is completed on June 25.
“Signal Hill is the scene of feverish activity, of an endless caravan of automobiles coming and going, of hustle and bustle, of a glow of optimism,” reports California Oil World. “Derricks are being erected as fast as timber reaches the ground. New companies are coming in overnight. Every available piece of acreage on and about Signal Hill is being signed up.”
Today, Signal Hill’s Discovery Well Park hosts a community center. Historic photos and descriptions can be found at six viewpoints along the Panorama Promenade. There are the remaining oil wells throughout the hill – with the historic “Discovery Well, Alamitos Number 1″ at the corner of Temple Avenue and East Hill Street. A monument, dedicated on May 3, 1952, serves “as a tribute to the petroleum pioneers for their success here, a success which has, by aiding in the growth and expansion of the petroleum industry, contributed so much to the welfare of mankind.”
The Long Beach field still produces 1.5 million barrels annually. Read more in “Signal Hill brings California Oil Boom.”
June 23, 1947 – Federal Control of Continental Shelf
The U.S. Supreme Court rules that California cannot claim rights to the continental shelf beyond three miles.
California and other coastal states litigation resulted from President Harry S. Truman’s September 28, 1945, Continental Shelf Proclamation, which noted that “aware of the long range world-wide need for new sources of petroleum and other minerals, (the federal government) holds the view that efforts to discover and make available new supplies of these resources should be encouraged.”
The Supreme Court ruling affirms federal jurisdiction “with respect to the natural resources of the subsoil and seabed of the continental shelf.” Similar court decisions affecting Louisiana and Texas are made on June 8, 1950.
June 24, 1893 – Early Petroleum Pipeline
The United States Pipeline Company delivers its first throughput of both crude and refined oil to Wilkes-Barre, Pennsylvania — proving that petroleum products can be moved over long distances without damage.
June 24, 1937 – Trace of Oil found in Minnesota
Oil is discovered in Minnesota. The wildcat well (Fee No. 1) in Traverse County in the western part of the state produces just three barrels a day from 864 feet. The discovery prompts leasing — but no commercial quantities of oil are found. This reaffirms State Geologist Newton H. Winchell’s 1889 conclusion that the geologic conditions for significant deposits of oil and natural gas do not exist in Minnesota.
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