When Home Oil Company’s “Blue Goose” gusher came in at a reported 1,000 barrels a day near Coalinga, California, in 1898, a drilling frenzy soon followed.
Among those looking for “black gold” riches midway between San Francisco and Los Angeles was former California State Attorney General W.H.H. Hart, William Graham, and their associates, who incorporated the California Oil & Gas Company with capitalization of $2 million.
The new company opened offices in San Francisco and acquired leases north of Coalinga, near an old settlement in the hills called Oil City and in the area of the Blue Goose well, which produced oil from 1,400 feet.
As central California oil production peaked, a May 11, 1910, the San Francisco Call newspaper unabashedly promoted the industry’s success – but warned of rising drilling costs. “Much Greater Expense Lies Beneath Surface of Coalinga Oil Fields,” it reported, noting the average cost of a drilling rig was $2,240.
Other speculators and entrepreneurs rushed to find leases as well. California Oil and Gas secured leases in Fresno County’s Sections 19 and 20.
The company’s leases and other of Hart and Graham’s interests were almost sold to an “Eastern Syndicate” for almost $1.85 million in 1900, according to the Pacific Oil Reporter, but the deal fell through.
Increased and deeper production from the northern San Joaquin Valley’s Coalinga field – producing a viscous “heavy oil” – eventually resulted in an oil glut typical of many booming petroleum regions.
“Notwithstanding the low price of oil, which reached as low as 15 cents a barrel in 1905, drilling operations were carried on continuously throughout certain parts of the field from 1902 to 1906,” report the authors of Geology and Oil Resources of the Coalinga District, California, in 1910.
California Oil and Gas Company secured leases in Fresno County’s Sections 19 and 20, Township 19 South, Range 15 East, north of Coalinga’s main drilling area shown on this 1936 map of well sites.
By 1908, California Oil and Gas had drilled two dry holes. Their leasing area was then described by the United States Geological Survey as, “rather thoroughly tested and, though most of the wells have yielded more or less oil, they were not deemed profitable enough to warrant continuous operation.”
California Oil & Gas Company did not survive, but as a well-site map of Fresno County illustrates, other companies were more fortunate in finding commercial quantities of oil. The Coalinga field became California’s most productive by 1910.
Although production peaked a few years later, Coalinga made a comeback in the 1970s thanks to recovery technologies such as high-pressured water and steam injection.
Enhanced Oil Recovery Project
About a century after the Coalinga oilfield’s peak production, in 2008 Chevron partnered with BrightSource, a solar-power technology company, for a solar thermal enhanced oil recovery (EOR) demonstration.
Concentrated sunlight is focused to heat a boiler in a 327-foot tower in the Coalinga oilfield. Chevron’s enhanced oil recovery experiment recovered viscous (thick) oil that would have been left underground.
The test project, completed in September 2011, used hundreds of tracking mirrors, known as heliostats, to concentrate sunlight on a boiler atop a 327-foot tower. The boiler produced high-temperature, high-pressure steam pumped deep into the oil reservoir in order to heat it.
“This increases the pressure of the reservoir and reduces the viscosity of the oil, making it easier to bring to the surface,” explains a BrightSource EOR expert. “To conserve water use, the steam is then cooled and recycled.”
Extracting heavy-oil reserves, like the ones found at Coalinga, is a global challenge, according to Chevron. Industry studies report that conventional oil recovery methods are only able to extract about 10 percent to 30 percent of the original oil from any given reservoir.
Read about southern California petroleum history – and a major discovery made in 1921 – in Signal Hill brings California Oil Boom.
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The stories of exploration and production companies joining petroleum booms (and avoiding busts) can be found updated in Is my Old Oil Stock worth Anything? The American Oil & Gas Historical Society preserves U.S. petroleum history. Please support this AOGHS.ORG energy education website. For membership information, contact bawells@aoghs.org. © 2018 Bruce A. Wells.