by Bruce Wells | Sep 22, 2024 | Petroleum Companies
Learning hard lessons about wasteful overproduction and depleted reservoir pressures.
The discovery of oil along a small creek in Titusville, Pennsylvania, in August 1859 launched the American petroleum industry. Drilled just 69.5 feet deep at Oil Creek by former railroad conductor Edwin L. Drake, the well produced oil that could be refined into an inexpensive lamp fuel, kerosene.
Drake, who pioneered drilling technology, borrowed a local kitchen water pump to fill the first oil barrels. Early oil production from his and other northwestern Pennsylvania wells brought new refineries to Oil City and Pittsburgh on the Allegheny River.
Four acres close to the Sherman well sold for $220,000 as venture oil capitalists, entrepreneurs, and speculators tried their luck in the newly created petroleum industry.
Demand for kerosene quickly outpaced the inexpensive but volatile lamp fuel camphene. Kerosene also replaced expensive whale oil. A typical four-year whaling voyage returned with 40,000 gallons; New oilfields produced 10 million gallons of kerosene in 1860 alone.
Edwin Drake’s well, drilled for the first U.S. oil company established by George Bissell, brought the country’s first drilling boom as entrepreneurs rushed in. Farmers who leased their land were among the first to benefit.
“Oil Creek was soon taken up and within a relatively short time, the entire valley as far back as into the hillsides, had been leased or purchased,” author Paul Gibbons noted.
With the science of petroleum geology yet to debut, early oil explorers searched near oil seeps and the “rich territory was limited to flats along the streams,” Gibbons added. Natural gas discoveries would later arrive to the benefit of Pittsburgh industries.
Sherman Well of 1861
J.T. Foster’s farm on Pioneer Run hillside off Oil Creek was in “the dry diggings” where few were willing to gamble. Nonetheless, newly minted oil operators gathered investors to try to find oil. Capital was hard to come by.
On the 200-acre Foster farm, one struggling and almost cashless outfit had to trade a one-sixteenth interest for $80 and an old shotgun to continue drilling on its Sherman well.
Drilling along Oil Creek continued undiminished, but in September 1861 on the Funk farm, the Empire well began flowing a river of oil under its own pressure. They called it a “fountain well.” Some said it initially produced 2,000 barrels of oil a day. Other successful wells followed.
Back on the Foster farm lease, the Sherman well (saved earlier for $80 and a shotgun) in March 1862 was completed as the “best single strike of the year,” despite being “above all the other flowing wells” according to the Hornellsville Tribune. Leases became highly prized and, as historian Terence Daintith observed, “subleasing was also a money machine.”
Oilfield offices of the Shoe & Leather Petroleum company, David Harris Supply Company, and the Foster Farm Oil Company, which drilled an 1866 well that produced 300 barrels of oil.
The Venango Citizen reported, “Territory along the river above and below Franklin has been changing hands at high figures, and preparations are being made for active work.”
Just four acres close to the Sherman well sold for $220,000 as venture capitalists, entrepreneurs, and speculators tried their luck in the newly created petroleum industry. The Foster Farm Oil Company and the Shoe & Leather Petroleum Company were among many corporations formed to exploit exploration opportunities.
Foster Farm Oil Company
Foster Farm Oil Company incorporated in February 1865. Based in Philadelphia and capitalized at $1.5 million, the company offered 150,000 shares to the public. “The Foster Farm is owned by a company of ten gentlemen, and is known as the Foster Farm Oil Company,” reported the The Titusville Morning Herald. E.C. Bishop (Elisa Chapman ) was principal owner as well as one time general agent, treasurer, and superintendent.
The new company secured acreage on the Foster farm that already had 12 wells pumping 100 barrels of oil a day. Foster leased acreage in small tracts to several new companies vying for closest proximity to known producers. Oil prices had always fluctuated wildly, but a standard 42-gallon barrel of crude oil sold in 1865 for about $6.50, including a Civil War excise tax of $1 per barrel.
Foster Farm Oil Company continued drilling and subleasing small tracts. In April 1866, it drilled a well producing 300 barrels of oil a day from 612 feet deep. Then a second well produced at 310 barrels, a third at 100, and another at 350 barrels of oil a day. In 1867, Foster Farm Oil Company sold 1,000 barrels of oil at $2.10 each.
All over the Pioneer Run hillside, wooden derricks with steam engines pumped away even as overproduction drained the oilfield. Margins disappeared and companies began to fail.
Foster Farm Oil Company’s fortunes faded, as did the value of its stock. In 1869, total U.S. oil production topped 4 million barrels and oversupply drove many out of business. After 10 years in the oil patch, Elisha C. Foster departed to enter the banking business in Connecticut.
By 1871, shares of Foster Farm Oil were being auctioned off along with other “Stocks, Loans, etc.” The following year, 5,000 shares of Foster Farm Oil Company were offered at 11 cents a share. Litigation began to overtake the failing company in 1873; it would continue long after the drilling boom had moved on, finally being settled by the Connecticut Superior Court in 1886.
Shoe & Leather Petroleum
Shoe & Leather Petroleum Company incorporated in New York City in March 1865 to join the Pennsylvania oil rush. The company initially capitalized at $400,000, later reduced to $160,000. “Until the spring of 1865, the Foster Farm, Pioneer Run and vicinity were considered dry territory. Through the exertions of Mr. David Harris of this city, the Shoe & Leather Petroleum was formed,” reported the Titusville Morning Herald.
The company leased six acres on the Foster farm, then subleased them into 11 smaller tracts – the kind sought by smaller, speculative operations. “Substantial leaseholders could milk their leases by subleasing small lots for large premiums and high royalties,” historian Daintith later noted. “Far more money could be made this way than by actual production.”
By 1867, Shoe & Leather Petroleum had five producing wells, on five different tracts, with five different operators, yielding about 350 barrels of oil a day. But frantic production at Pioneer Run and Oil Creek, compelled land owners above oil reserves to drill, “regardless of price or market demand, in order to prevent his neighbor from draining his reserves.”
This traditional “law of capture” rendered an oily landscape thick with derricks, according to local accounts.
Overproduction and waste depleted reservoir pressures. Wells were pumped dry. Triumph Hill, and Pithole and other examples reinforced the precedent of oil discovery leading to drilling boom, and then to inevitable bust. By 1902, United States Investor reported Shoe Leather & Petroleum Company had “disappeared” and concluded, “The supposition is that the company has gone out of existence.”
In 1904, Smythe’s Directory of Obsolete American Securities and Corporations described Shoe & Leather Petroleum, “Extinct. Stock worthless.”
The stories of exploration and production companies can be found updated in Is my Old Oil Stock worth Anything?
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Recommended Reading: Cherry Run Valley: Plumer, Pithole, and Oil City, Pennsylvania
(2000); Myth, Legend, Reality: Edwin Laurentine Drake and the Early Oil Industry
(2009). Your Amazon purchase benefits the American Oil & Gas Historical Society. As an Amazon Associate, AOGHS earns a commission from qualifying purchases.
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The American Oil & Gas Historical Society preserves U.S. petroleum history. Please become an AOGHS annual supporter and help maintain this energy education website and expand historical research. For more information, contact bawells@aoghs.org. Copyright © 2024 Bruce A. Wells. All rights reserved.
Citation Information – Article Title: “Early Wells of Oil Creek.” Authors: B.A. Wells and K.L. Wells. Website Name: American Oil & Gas Historical Society. URL: https://aoghs.org/stocks/early-wells-of-oil-creek. Last Updated: November 1, 2024. Original Published Date: December 22, 2018.
by Bruce Wells | Sep 20, 2024 | Petroleum Transportation
Chicago Bridge & Iron Company in 1923 began erecting giant, spherical pressure vessels.
Seen from the highway, the spheres look like massive eggs or fanciful Disney architectural projects. A 19th-century iron bridge manufacturer from Chicago conceived the idea for these globes — at first made by riveting together wrought iron plates. Modern highly pressured vessels are vital for storing and transporting liquified natural gas (LNG).
Chicago Bridge & Iron Company (CB&I) officially named “Hortonspheres” — also called Horton spheres — after Horace Ebenezer Horton (1843-1912), the company founder and designer of water towers and rounded storage vessels. His son George would patent designs standing among the great innovations to come to the oil patch.
Hortonspheres, the trademarked name of massive containers for storing and transporting liquified natural gas (LNG), were invented by a bridge-building company.
Horace Horton grew up in Chicago, where he became skilled in mechanical engineering. He was 46 years old when he formed CB&I in 1889. His company prospered, building seven bridges across the Mississippi River.
Horton then expanded the company’s Washington Heights, Illinois, fabrication plant to begin manufacturing water tanks. It was a decision that would bring water towers to hundreds of towns.
Horace Ebenezer Horton (1843-1912) founded the company that would build the world’s first “field-erected spherical pressure vessel.”
CB&I erected its first elevated water tank in Fort Dodge, Iowa, in 1892, according to the company, which has noted that “the elevated steel plate tank was the first built with a full hemispherical bottom, one of the company’s first technical innovations.”
When Horton died in 1912, his company was just getting started. Soon, the company’s elevated towers were providing efficient water storage and pipeline pressure that benefited many cities and towns. CB&I’s first elevated “Watersphere” tank was completed in 1939 in Longmont, Colorado.
Improved Oilfield Structures
The company brought its steel plate engineering expertise to the oil and natural gas industry as early as 1919, when it built a petroleum tank farm in Glenrock, Wyoming, for Sinclair Refining Company (formed by Harry Sinclair in 1916).
Horace E. Horton’s company designed spherical storage vessels for his Chicago Bridge & Iron Company. Photo courtesy CB&I.
CB&I’s innovative steel plate structures and construction technologies proved a great success. The company left bridge building entirely to supply the petroleum infrastructure market.
A spherically bottomed water tower shown in the Chicago Bridge & Iron Company 1912 sales book.
Newly discovered oilfields in Ranger, Texas, in 1917 and Seminole, Oklahoma, in the 1920s were straining the nation’s petroleum storage capacity. A lack of pipelines and storage facilities in booming West Texas was a big problem.
In the Permian Basin, an exploration company’s executives were desperate to store soaring oil production. They hired engineers to design an experimental tank capable of holding up to five million barrels of oil at Monahans, Texas. Construction in early 1928 took three months working 24 hours a day.
Roxana Petroleum Company’s massive storage structure used concrete-coated earthen walls 30 feet tall. The oil reservoir was covered with a cedar roof to slow evaporation.
But when no solution could be found for leaking seams, the oil storage attempt was abandoned.The concrete oval, which briefly became a water park in 1958, later became home to Monahans’ Million Barrel Museum.
By 1923, CB&I’s storage innovations like its “floating roof” oil tank had greatly increased safety and profitability as well as setting industry standards. That year the company built its first Hortonsphere in Port Arthur, Texas.
Liquefied Natural Gas
Soon, spherical vessels of all sizes were being used for storage of compressed gases such as propane and butane. Hortonspheres also hold liquefied natural gas (LNG) produced by cooling natural gas at atmospheric pressure to minus 260 degrees Fahrenheit, at which point it liquefies.
As an iconic engineering example of form following function, the sphere is the ideal shape for a vessel that resists internal pressure.
In the first Port Arthur installation and up until about 1941, the component steel plates were riveted; thereafter, welding allowed for increased pressures and vessel sizes. As metallurgy and welding advances brought tremendous gains in Hortonspheres’ holding capacities, they also have proven to be an essential part of the modern petroleum refining business.
CB&I constructed fractionating towers for many petroleum refineries, beginning with Standard Oil of Louisiana at Baton Rouge in 1930. The company also built a giant, all-welded 80,000-barrel oil storage tank in New Jersey.
Since its first sphere in 1923, Chicago Bridge & Iron by 2013 fabricated more than 3,500 Hortonspheres for worldwide markets in capacities reaching more than three million gallons — reportedly the world’s top spherical storage container builder.
Poughkeepsie Hortonsphere
Fascinated by geodesic domes and similar structures, Jeff Buster discovered a vintage Hortonsphere in Poughkeepsie, New York. In 2012 he contacted the New York State Office of Parks, Recreation, and Historic Preservation.
A Hortonsphere viewed in 2012 from the “Walkway over the Hudson” in Poughkeepsie, New York. It was dismantled in 2013. Photo courtesy Jeff Buster.
Buster wanted the agency to save Horton’s sphere at the corner of Dutchess and North Water streets. He asked that an effort be made “to preserve this beautiful and unique ‘form following function’ structure, which is in immediate risk of being demolished.”
Buster posted a photo of the Poughkeepsie Hortonsphere on a website devoted to geodesic domes. “The jigsaw pattern of steel plates assembled into this sphere is unique,” he wrote.
“The layout pattern is repeated four times around the vertical axis of the tank,” Buster added. “With the rivets detailing the seams, the sphere is extremely cool and organic feeling.”
Although the steel tank, owned by Central Hudson Gas and Electric Company, was demolished in late 2013, Buster’s photo has helped preserve its oil patch legacy.
Liquified Natural Gas at Sea
Sphere technology became seaborn as well. On February 20, 1959, after a three-week voyage from Lake Charles, Louisiana, the Methane Pioneer — the world’s first LNG tanker — arrived at the world’s first LNG terminal at Canvey Island, England.
Ships began transporting liquified natural gas as early as 1959. Modern LNG tankers are many times larger and protected with double hulls.
The Methane Pioneer, a converted World War II liberty freighter, contained five, 7,000-barrel aluminum tanks supported by balsa wood and insulated with plywood and urethane. The 1959 successful voyage across the Atlantic demonstrated that large quantities of liquefied natural gas could be transported safely across the ocean.
Most modern LNG carriers have between four and six tanks on the vessel. New classes have a cargo capacity of between 7.4 million cubic feet and 9.4 million cubic feet. Each ship is equipped with its own re-liquefaction plant.
In 2015 — about 100 years after Horace Ebenezer Horton died — Mitsubishi Heavy Industries announced constructing of the next-generation LNG carriers to transport the shale gas produced in North America. Rapid growth of U.S. natural gas production came from hydraulic fracturing (“fracking”) of shale formations in North Dakota and other states.
In 2023, there were 772 LNG storage vessels worldwide, according to Statista.
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Recommended Reading: The Extraction State, A History of Natural Gas in America (2021); Sheer Will: The Story of the Port of Houston and the Houston Ship Channel 
(2014). Your Amazon purchase benefits the American Oil & Gas Historical Society. As an Amazon Associate, AOGHS earns a commission from qualifying purchases.
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The American Oil & Gas Historical Society (AOGHS) preserves U.S. petroleum history. Please become an AOGHS annual supporter and help maintain this energy education website and expand historical research. For more information, contact bawells@aoghs.org. Copyright © 2023 Bruce A. Wells. All rights reserved.
Citation Information – Article Title: “Horace Horton’s Spheres.” Authors: B.A. Wells and K.L Wells. Website Name: American Oil & Gas Historical Society. URL: https://aoghs.org/transportation/hortonspheres/. Last Updated: September 17, 2024. Original Published Date: December 14, 2016.
by Bruce Wells | Sep 19, 2024 | Petroleum Pioneers
Pico Canyon oilfield brought pipelines, refineries and Chevron.
Following the 1859 first commercial U.S. oil discovery in Pennsylvania, the earliest petroleum exploration companies were attracted to California’s natural oil seeps. Small but promising discoveries after the Civil War led to the state’s first gusher in 1876 — and the launching of a new California industry.
Pico Canyon, less than 35 miles north of Los Angeles, produced limited amounts of oil as early as 1855, but there was no market for the petroleum found near natural oil seeps. The first California drilling boom arrived a decade later in the northern part of the state with an oilfield also found near seeps.
Humboldt County Oil
Completed in 1865 by the Old Union Matolle Oil Company, the Humboldt County well produced oil near the aptly named Petrolia. The oilfield discovery quickly attracted some of America’s earliest exploration companies.
Detail of a 1908 “Map of Humboldt County Oil Lands” includes post-Civil War commercial oil wells that attracted more drilling to northern California. Map courtesy Humboldt County Map Collection, Cal Poly Humboldt Library Special Collection.
A California historical marker (no. 543) dedicated on November 10, 1955 declared:
California’s First Drilled Oil Wells — California’s first drilled oil wells producing crude to be refined and sold commercially were located on the north fork of the River approximately three miles east of here. The Old Union Mattole Oil Company made its first shipment of oil from here in June 1865 to a San Francisco refinery. Many old wellheads remain today.
Although the “Old Union well” initially yielded about 30 barrels of high-quality oil, production declined to one barrel of oil per day and the prospect was abandoned, according to K.R. Aalto, a geologist at Humboldt State University.
The Humboldt County well in what became the oilfield, “attracted interest and investment among oilmen because of the abundance of oil and gas seeps throughout that region,” Aalto noted in his 2011 article in Oil-Industry History. But the California petroleum industry truly began to the south, at Pico Canyon Oilfield, a few miles west of Newhall.
Pico Canyon Well No. 4
In Pico Canyon of the Santa Susana Mountains, Charles Mentry of the California Star Oil Works Company drilled three wells in 1875 and 1876 that showed promise. The first West Coast oil gusher arrived with his fourth well and helped establish a major oil company.
The steam boiler and cable tools, including the “walking beam,” of Pico Well No. 4 in 1877. Photo by Carleton Watkins courtesy Los Angeles Public Library Photo Collection.
Drilling with a steam-powered cable-tool rig in an area known for its many oil seeps, Mentry discovered the Pico Canyon oilfield north of Los Angeles. California’s first truly commercial oil well, the Pico Well No. 4 gusher of September 26, 1876, prompted more development, including pipeline construction and an oil refinery for producing kerosene.
According to an article in the Los Angeles Times, the well initially produced 25 barrels a day from 370 feet. Mentry improvised many of his cable tools, including making a drill stem out of old railroad car axles he welded together.
“The railroad had not then been completed, there was no road into the canyon, water was almost unattainable, and there were no adequate tools or machinery to be had,” noted the Times article.
First Refinery
California Star Oil Works deepened the well to 560 feet, increasing daily production by 125 barrels, and constructed its pipeline from Pico Canyon to the newly built refinery in Newhall, just south of Santa Clarita.
By 1880, California’s first commercial refinery processed oil from its first commercial oil well to make kerosene and other products. Photo courtesy the Santa Clarita Valley Historical Society.
Producing kerosene and lubricants, Newhall’s Pioneer Refinery on Pine Street would become the first successful commercial refinery in the West. Giant stills set on brick foundations included two capable of producing 150 barrels a day each. The city of Santa Clarita received California’s first successful refinery as a gift from Chevron in 1997.
The Santa Clarita refinery, today preserved as a tourist attraction, is among the oldest in the world. The major oil company can trace its beginnings to the 1876 Pico Canyon oil well, which has been designated a historic site by the California Office of Historic Preservation.
Birth of Chevron
Chevron, once the Standard Oil Company of California, in 1900 acquired Pacific Coast Oil Company. Pacific Coast had become majority owner of California Star Oil Works in 1879.
Santa Clarita acquired California’s first refinery as a gift from Chevron in 1997. It is one of the oldest existing oil refinery sites in the world. Photo by Konrad Summers.
Charles Mentry is remembered by a small town a short distance from the 1876 Pico Canyon discovery well, Mentryville. Visit the Santa Clarita Valley Historical Society website to learn more history about Pico Canyon oil production. About 35 miles south of Pico Canyon, a gold prospector discovered the massive Los Angeles field in 1892.
Learn more in Discovering Los Angeles Oilfields.
Refining Kerosene for Lamps
California’s commercial refineries were among the first in America, where the industry began with small refineries in Pittsburgh, Pennsylvania, producing kerosene for lamps. The oil came from Titusville area oilfields — and a giant 1871 field discovered at Bradford, about 70 miles to the northeast.
The Bradford oilfield, which became known as America’s “first billion-dollar oilfield,” launched many Pennsylvania refineries, including the still-operating American Refining Group. The field’s first well produced just 10 barrels a day from 1,110 feet.
By 1875. Bradford leases reached as high as $1,000 per acre. A decade later, a sudden decline in the oilfield’s production led to a technological breakthrough. Pioneers in the new science of petroleum geology suggested that water pressure on oil sands could be used to increase oil production — “waterflooding” the geologic formation.
The oldest operating U.S. oil refinery began in 1881 in Bradford, Pennsylvania.
In Neodesha, Kansas, the Norman No. 1 well of 1892 well revealed a petroleum-rich geologic region that would extend across Oklahoma, Texas and Louisiana. Standard Oil built a refinery in Neodesha in 1897 that refined 500 barrels of oil a day. Standard was the first to process oil from the giant Mid-Continent field (learn more in Kansas Well reveals Mid-Continent).
As of January 1, 2022, there were 130 operable petroleum refineries in the United States, according to the Energy Information Administration (EIA), down from 141 refineries in 2017.
Built in 1897, a Standard Oil refinery in Neodesha, Kansas, refined 500 barrels of oil per day – the first to process oil from the Mid-Continent field. From “Kansas Memory” collection of the Kansas Historical Society.
For an investigation into which California oil well was the first, see this 2011 SearchReSearch blog of Dan Russell.
Learn more California petroleum history in the Signal Hill Oil Boom.
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Recommended Reading: California State University, Dominguez Hills
(2010); Pico Canyon Chronicles: The Story of California’s Pioneer Oil Field
(1985). Your Amazon purchase benefits the American Oil & Gas Historical Society. As an Amazon Associate, AOGHS earns a commission from qualifying purchases.
_______________________
The American Oil & Gas Historical Society (AOGHS) preserves U.S. petroleum history. Please become an AOGHS annual supporter and help maintain this energy education website and expand historical research. For more information, contact bawells@aoghs.org. Copyright © 2024 Bruce A. Wells. All rights reserved.
Citation Information: Article Title: “First California Oil Well.” Authors: B.A. Wells and K.L. Wells. Website Name: American Oil & Gas Historical Society. URL: https://aoghs.org/petroleum-pioneers/first-california-oil-well. Last Updated: September 18, 2024. Original Published Date: September 9, 2015.
by Bruce Wells | Sep 18, 2024 | Petroleum Pioneers
Giant oilfield discovery in 1928 at Hobbs launched the New Mexico petroleum industry.
“It was desolate country – sand, mesquite, bear grass and jack rabbits. Hobbs was a store, a small school, a windmill, and a couple of trees.” — New Mexico roughneck.
Although the Hobbs discovery came six years after the first oil production (seven years after the first natural gas well), petroleum geologists soon called it the most important single oil find in New Mexico history.
The Midwest State No. 1 well — spudded in late 1927 using a standard cable-tool rig — saw its first signs of oil from the giant oilfield at a depth of 4,065 feet on June 13, 1928. It had been a long journey. (more…)
by Bruce Wells | Sep 18, 2024 | Petroleum Pioneers
Humble Oil and Refining Company discovered an oilfield in 1943 — and earned a $50,000 state bounty.
Among its petroleum history records, Florida’s first — but not last — unsuccessful attempt to find commercially viable oil reserves began in 1901, not far from the Gulf Coast panhandle town of Pensacola. Two exploratory wells, the first drilled to a depth of 1,620 feet and the second reaching 100 feet deeper, were abandoned. (more…)
