- This Week in Petroleum History June 29 – July 5
June 29, 1956 – Interstate Highway System enacted
The Federal-Aid Highway Act of 1956, popularly known as the National Interstate and Defense Highways Act, becomes law.
Passed at the urging of President Dwight Eisenhower, the act provides 90 percent federal funding for a “system of interstate and defense highways” – in case of the need to flee cities during a nuclear attack.
The original network of controlled-access highways is designed to reach every city with a population of more than 100,000.
June 30, 1864 – First Oil Tax funds Civil War
The federal government taxes oil for the first time when it levies a $1 per barrel tax on production from Pennsylvania oilfields.
As early as 1862 – needing revenue to fund the Civil War – Treasury Secretary Salmon Chase has advocated a $6.30 tax per barrel on crude oil and $10.50 per barrel on refined products.
Angry oil producers rally against the tax in Titusville and Oil City, Pennsylvania – and send delegates to Washington, where they ultimately negotiate a tax of $1 per barrel.
Visit the Drake Well Museum in Titusville.
July 1, 1919 – Leading Oilmen join Mid-Continent Association
The two-year-old Mid-Continent Oil & Gas Association establishes its Kansas-Oklahoma Division in Tulsa. Members are a “who’s who” of top independent producers.
Kansas-Oklahoma members include Frank Phillips of Phillips Petroleum; E.W. Marland, whose company will become Conoco; W.G. Skelly, founder of Skelly Oil; H.H. Champlin, founder of Champlin Oil; and Alf Landon, who will become governor of Kansas and the Republican presidential candidate in 1936.
Robert S. Kerr, co-founder of Kerr-McGee Oil Company (later to be Oklahoma’s governor and U.S. Senator), is president of the Oklahoma-Kansas Division from 1935 through 1941.
July 1, 1922 – Gusher brings Second Oil Boom to Southern Arkansas
First settled by French fur trappers in 1844, Smackover, Arkansas, has a population of just 90 people in 1922 when a wildcat well erupts oil.
The well, drilled to 2,066 feet by sawmill owner Sidney Umsted, discovers the 25,000-acre Smackover field. Within six months, 1,000 wells have been drilled with a success rate of 92 percent.
The town’s population grows to 25,000 and its uncommon name quickly attains national attention. Read more in Arkansas Oil and Gas Boom Towns.
Nearby just a year and a half earlier, the first commercial oil well in Arkansas, the Busey-Armstrong No. 1, had revealed the El Dorado field and launched the state’s first drilling boom (and the career of a young H.L. Hunt).
Surrounded by 20 acres of woodlands between El Dorado and Smackover, the Arkansas Museum of Natural Resources preserves the state’s rich heritage. An annual “Smackover Oil Town Festival” has taken place every June since 1971.
July 1, 1924 – Halliburton founded in Oklahoma
Erle P. Halliburton incorporates a new well servicing company in Duncan, Oklahoma. In 1921 he had received a patent for a cementing process that isolated down-hole production zones, prevented collapse of the casing, and greatly extended production from a well.
By 1926 the Halliburton Company will sell five cementing trucks to an English company in Burma on the way to becoming an international giant. In 1993, the city of Duncan dedicates an Erle Halliburton statue in Memorial Park.
Read more in Halliburton cements Wells.
July 1, 1938 – Major Illinois Oil Discovery
The Texas Company – later Texaco – strikes oil in Marion County near Salem, Illinois. By January 1939 the field is ranked seventh in U.S. daily production.
In just one year the Salem oilfield will produce more than 20 million barrels of oil. Standard derricks, including one today on display for tourists in Olney, Illinois, dotted the landscape during the oil boom years that started in 1938.
Natural gas production in Illinois began as early as 1853 when marsh or “drift gas” was produced from two water wells drilled near Champaign. See Illinois Oil Field Museum.
July 2, 1910 – President Taft establishes Naval Petroleum Reserves
As the U.S. Navy rapidly converts from coal to oil burning ships, President William Howard Taft establishes three Naval Petroleum Reserves in 1910.
National security concerns about an assured oil supply in the event of war or a national emergency has resulted in the Pickett Act of 1910, which authorizes the president to set aside large areas of potential oil-bearing lands in California and Wyoming as sources of fuel for the Navy.
President Taft notes in a December 1910 message to Congress:
“As a prospective large consumer of oil by reason of the increasing use of fuel oil by the Navy, the federal government is directly concerned both in encouraging rational development and at the same time insuring the longest possible life to the oil supply.”
Within 15 years, the properties that make up the Naval Petroleum and Oil Shale Reserves include the three Naval Petroleum Reserves and three Naval Oil Shale Reserves. A Naval Petroleum Reserve Number Four on the north slope of Alaska is added in 1923.
The last American battleship to be built with coal-fired boilers, the U.S.S. Texas, is launched in 1912 and converted to oil-fired boilers in 1926. Sailors no longer had to shovel 2,900 tons of coal to fill the battleship’s bunkers. Read more in Petroleum and Sea Power.
July 2, 1913 – “Dan Patch” will bring End to Steam Locomotives
While most locomotives are still steam-powered, General Electric lays claim to producing the first commercially successful internal combustion gasoline engine locomotive in the United States.
The Electric Line of Minnesota purchases Locomotive Number 100 for $34,500. Two General Motors 175-horsepower V-8 gasoline engines drive two 600-volt, direct current generators to propel the 57-ton locomotive to a top speed of 51 miles per hour.
This new gas-powered electric hybrid is named “Dan Patch” in honor of a famed race horse. In 1918, it is converted to streetcar operations by removal of its novel G.E. gas-electric system. By 1930, 600-horsepower diesel engines with G.E .generators will launch a new era of train travel – streamliners. See Adding Wings to the Iron Horse.
July 4, 1906 – Louisiana conserves Natural Gas
Joining a growing number of states, Louisiana enacts conservation measures to prevent waste. The Louisiana State Legislature passes an act “to protect the natural gas fields of this state.”
The conservation law imposes penalties for “failure to cap out of control wells, doing injury to pipe lines, or wastefully burning natural gas from any well into the air.”
The measure is a result of lessons learned from Indiana and other early natural gas producing states. See Indiana Natural Gas Boom.