This Week in Petroleum History, June 18 – 24
June 18, 1889 – Birth of Standard Oil Company of Indiana
The Standard Oil Company of New Jersey incorporated a new subsidiary in Indiana in 1889. Standard Oil of Indiana processed oil at a growing refinery at Whiting, Indiana, southeast of Chicago.
By the mid-1890s, the Whiting refinery was the largest in the country. It began by producing axle grease for industrial machinery, paraffin wax for candles, and kerosene for home lighting. When John D. Rockefeller was forced to break up his oil holdings in 1911, Standard Oil of Indiana emerged as an independent company. Its Amoco service stations began opening in the 1950s. Amoco merged with British Petroleum (BP) in 1998 – the largest foreign takeover of an American company up to that time. Learn more in Standard Oil Whiting Refinery.
June 18, 1946 – Truman creates National Petroleum Council
The National Petroleum Council, a federally chartered advisory committee, was established in 1946 by President Harry Truman to advise him about oil and natural gas issues.
“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 NPC website.
Today, 200 members are appointed by the Secretary of Energy. They “serve without compensation as representatives of their industry…not as representatives of their particular companies or affiliations.”
June 18, 1948 – Service Company celebrates 100,000th Perforation
Fifteen years after its first perforation job, Lane-Wells Company returned to the same well near Motebello, California, and performed its 100,000th perforation. The return to Union Oil Company’s La Merced No. 17 well included a special ceremony; Walter Wells, chairman of Lane-Wells, was present for both events.
In 1930, Wells and another enterprising oilfield tool salesman, Bill Lane, envisioned a downhole gun that could shoot steel bullets through casing. They created a multiple-shot perforator that fired bullets individually by electrical detonation of the powder charges. After many tests, success came at the La Merced No. 17 well.
By late 1935 Lane-Wells had established a small fleet of trucks to become a leading provider of well-perforation services. The company, which merged with Dresser Industries in 1956, later became part of Baker-Atlas and continues today as a division of Baker Hughes, a GE Company. Learn more in Lane-Wells 100,000th Perforation.
June 20, 1977 – Oil begins Flowing in Trans-Alaska Pipeline
After three years of construction, the Trans-Alaska Pipeline began carrying oil 800 miles from Prudhoe Bay to the Port of Valdez at Prince William Sound. The oil arrived 38 days later, culminating the world’s largest privately funded construction project at the time.
The 48-inch-diameter pipeline cost $8 billion, including terminal and pump stations. Its annual flow accounted for about 20 percent of U.S. oil production. Tax revenues earned Alaska $50 billion by 2002. Above-ground sections of the pipeline (420 miles) were built in a zigzag configuration to allow for expansion or contraction of the pipe because of temperature changes. In some permafrost areas the supports included special two-inch “heat pipes.”
Prudhoe Bay field was discovered in 1968 by Atlantic Richfield and Exxon about 250 miles north of the Arctic Circle. Learn more in Trans-Alaska Pipeline History.
June 21, 1893 – Submersible Pump Inventor born
Armais Arutunoff, inventor of the electric submersible pump for oil wells, was born to Armenian parents in Tiflis, Russia. He invented the first electrical centrifugal submersible pump in 1916. But after emigrating to America in 1923, Arutunoff could not find financial support for his down-hole oil production technology.
Thanks to help from his friend Frank Phillips, president of Phillips Petroleum, in 1928 Arutunoff moved to Bartlesville, Oklahoma, and established a manufacturing company. His REDA Pump Company manufactured pump and motor devices (and employed hundreds during the Great Depression).
A 1936 Tulsa World article described his invention 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.”
The name REDA, which stands for Russian Electrical Dynamo of Arutunoff, was the cable address of the company he originally formed in Germany. REDA submersible pumping systems today are part of Schlumberger. Learn more about Arutunoff in Inventing the Submersible Pump.
June 23, 1921 – Signal Hill Discovery brings California Oil Boom
A discovery at Signal Hill, California – one of the world’s most famous oil strikes – launched another southern California drilling boom.
When the Alamitos No. 1 well erupted with a geyser of oil, the discovery revealed of one of California’s most prolific oilfields. The natural gas pressure was so great that a gusher rose 114 feet. The well produced about 600 barrels of oil a day when it was completed two days later.
Soon known as “Porcupine Hill,” the town’s oilfield 20 miles south of Los Angeles was producing almost 260,000 barrels of oil every day by 1923. Combined with the historic 1892 Los Angeles Oilfield discovery and the 1920 oilfield at Huntington Beach, southern California produced one-fourth of the world’s oil.
Today, Signal Hill’s Discovery Well Park hosts a community center with historic photos and descriptions. A monument dedicated in 1952 serves “as a tribute to the petroleum pioneers for their success here.” Learn more in Signal Hill Oil Boom.
June 23, 1947 – Continental Shelf
The U.S. Supreme Court ruled that the state of California could not claim rights to the continental shelf beyond three miles. California and other coastal states litigation had resulted from President Harry Truman’s 1945 Continental Shelf Proclamation, which placed control with the federal government.
The Supreme Court ruling affirmed federal jurisdiction “with respect to the natural resources of the subsoil and seabed of the continental shelf.” Similar rulings affecting Louisiana and Texas would be made in 1950.
June 24, 1937 – Very Little Oil found in Minnesota
Oil was discovered in Minnesota by a wildcat well drilled in Traverse County in the western part of the state. The well produced three barrels of oil a day from 864 feet deep. Although the discovery prompted more leasing, no commercial quantities of oil were found. This reaffirmed geologists’ conclusions since 1889 that the conditions for significant oil deposits did not exist in Minnesota.
“Not much oil and gas is obtain from Precambrian rocks, with which Minnesota is very amply blessed,” noted Richard Ojakangas in his 1984 book, Minnesota’s Geology. “Oil and gas form by the decay of animal and plant matter, and animals and plants were nearly nonexistent during the Precambrian time.” Although Minnesota today ranks fourth in the nation in ethanol production capacity, its oil production peaked that summer of 1937.
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