This Week in Petroleum History, April 1 to April 7
April 1, 1911 – First Well of “Pump Jack Capital of Texas”
South of the Red River border with Oklahoma, near Electra, Texas, the Clayco Oil & Pipe Line Company’s Clayco No. 1 well launched an oil boom that would last decades. “As news of the gusher spread through town, people thought it was an April Fools joke and didn’t take it seriously until they saw for themselves the plume of black oil spewing high into the sky,” reports one Electra historian.
The well on cattleman William Waggoner’s lease settled into production of 650 barrels per day from about 1,600 feet deep. Hundreds of producing wells followed, leading to the Electra oilfield’s peak production of more than eight million barrels in 1913. North Texas oil fever would again soar when “Roaring Ranger” erupted in 1917 in neighboring Eastland County. A third major discovery arrived with the Burkburnett oil boom in 1918.
Thanks to a campaign by dedicated community activists, in 2001 Texas legislators designated Electra the Pump Jack Capital of Texas. The 2,800 residents today host an annual Pump Jack Festival celebrating their 1911 oil discovery.
April 1, 1986 – Crude Oil Price hits Modern Low
World oil prices fell below $10 a barrel – a modern low for the petroleum industry. Causes included excessive OPEC production, worldwide recession (increasing supplies with declining demand) and a U.S. petroleum industry regulated by production and price controls. “Saudi Arabia, tiring of cutting output to support prices, flooded the market,” noted Mark Shenk of Bloomberg News in 2015. “West Texas Intermediate (WTI), the U.S. oil benchmark, tumbled 69 percent from $31.82 a barrel in November 1985 to $9.75 in April 1986.” Oil prices recovered by 1990 and set a record peak of $145 per barrel in July 2008, before another price collapse to below $32 by the end of the year. For 2020, the Energy Information Administration has forecasted WTI oil prices to average about $58 per barrel, compared with an average of $65 in 2018 and $56.13 in 2019.
April 2, 1978 – First Episode of “Dallas” airs on CBS
Marketed as a prime-time soap opera, “Dallas” debuted as a miniseries on the CBS network. The show featured the Ewing family and the independent oil company, Ewing Oil. The U.S. petroleum industry’s image would suffer for 14 seasons. J.R.’s shady business schemes and “unapologetic commitment to self-interest” attracted loyal viewers, noted show creator David Jacobs in a 1990 New York Times article. The cliffhanger, “Who shot J.R.?” mystery, the show’s third-season finale, led to the “Who Done It?” episode, which at the time was the highest-rated television episode in U.S. history, watched by 83 million people.
April 2, 1980 – President Carter signs Crude Oil Windfall Profit Tax
One year after lifting price controls on oil, President Jimmy Carter signed the Crude Oil Windfall Profit Tax (WPT) into law. The controversial WPT imposed an excise tax on oil production. “From 1980 to 1988, the nation levied a special tax on domestic oil production,” explains historian Joseph Thorndike. Policymakers “imposed an excise levy on domestic oil production, taxing the difference between the market price of oil and a predetermined base price.”
The base price was derived from 1979 oil prices and required annual adjustments for inflation. A remnant of President Richard Nixon’s wage and price controls of 1971, WPT was meant to limit jumps in oil prices. But after eight years of the tax, domestic oil production fell to its lowest level in 20 years as dependence on imported oil increased, according to the Congressional Research Service. The depressed state of the U.S. oil industry after 1986 also compelled Congress to repeal the tax in 1988.
April 4, 1951 – First North Dakota Oil Well taps Williston Basin
After eight months of difficult drilling and severe snowstorms, Amerada Petroleum discovered oil in North Dakota – revealing the Williston Basin two miles beneath the farm of Clarence Iverson near Tioga. About 30 million acres were under lease within two months of the discovery as petroleum companies rushed to the region. The giant basin would prove to extend into Montana, South Dakota and Canada.
According to historian James Key, in March 1951 the well had reached 10,500 feet deep before a blizzard ended operations. After resuming drilling on April 4, the well was perforated from 11,630 feet to 11,640 feet (using shaped charges, four holes per foot). Later that evening, “a new industry was born in North Dakota,” Key says. “This was the first major discovery in a new geologic basin since before World War II.”
The U.S. Geological Survey in 2008 estimated undiscovered resources within the Williston Basin’s Bakken Formation alone could be as high as 3.65 billion barrels of oil and 1.85 trillion cubic feet of natural gas. A 2013 USGS estimate doubled those figures.
April 5, 1976 – Strategic Oil Reserves
President Gerald R. Ford signed the Naval Petroleum Reserves Production Act, which for the first time allowed full commercial development of the nation’s three Naval Petroleum Reserves. The legislation was a result of oil shortages created by the Arab oil embargo of 1973-74. Oil, natural gas, and liquid products produced from the Naval Petroleum Reserves were sold by the Department of Energy at market rates. According to DOE, one of the federal properties, the Elk Hills field in California, produced its one billionth barrel of oil in September 1992. While managed by DOE (until privatized in 1998), Elk Hills generated more than $17 billion in profits for the U.S. Treasury.
April 7, 1902 – Texas Company founded during Spindletop Boom
Of the hundreds of companies founded during the Spindletop drilling boom, the Texas Company was one of the few that rose to the top of the petroleum industry. In April 1902, Joseph “Buckskin Joe” Cullinan and Arnold Schlaet formed the company in Beaumont to transport and refine oil from the booming oilfield. They constructed a kerosene refinery in Port Arthur.
A January 1903 oil discovery – the Fee No. 3 well at nearby Sour Lake Springs – would erupt and begin producing 5,000 barrels of oil a day, launching the company’s success in exploration and production operations.
The telegraph address of the Texas Company’s New York office was “Texaco” – a name soon applied to its products. In 1909 the company registered its first trademark, a red star with a green capital letter “T” superimposed on it. By 1928 the company had more than 4,000 gasoline stations in 48 states. The Texas Company officially renamed itself Texaco Inc. in 1959. Learn more in Sour Lake produces Texaco.
April 7, 1966 – Cold War Accident boosts Offshore Technology
A robotic technology soon adopted by the offshore petroleum industry was first used to retrieve an atomic bomb. America’s first cable-controlled underwater research vehicle (CURV) attached cables to recover the weapon lost in the Mediterranean Sea.
The 70-kiloton hydrogen bomb, which had been lost when a B-52 crashed off the coast of Spain in January, was safely hoisted from a depth of 2,850 feet. “It was located and fished up by the most fabulous array of underwater machines ever assembled,” proclaimed a Popular Science magazine article.
During the Cold War, the Navy developed deep-sea technologies that the offshore petroleum industry would adopt and continue to advance. Learn more in Swimming Socket Wrenches.
Recommended Reading: Dallas: The Complete Story of the World’s Favorite Prime-Time Soap (2005); The Bakken Goes Boom: Oil and the Changing Geographies of Western North Dakota (2016); The Texaco Story: The First Fifty Years, 1902-1952 (2012); Mapping the Deep: The Extraordinary Story of Ocean Science (2000).
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