by Bruce Wells | Jul 11, 2020 | Petroleum Pioneers
Commercial production began with a 1902 oilfield in a region known for natural oil seeps. The real boom came in 1957.
Alaska’s petroleum history began long before statehood in 1959 and the major oilfield discovery two years earlier.
The truly first Alaskan oil well with commercial production was completed in 1902 in rugged, coastal territory where oil seeps had been known for years. Despite limited cable-tool technologies of the day, the Alaska Steam Coal & Petroleum Syndicate produced oil near the remote settlement of Katalla on Alaska’s southern coast. The small oilfield also led to construction of Alaska Territory’s first refinery.
The Katalla discovery well, drilled on private land owned by the Alaska Development Company, marked the first unsteady steps of Alaska’s petroleum industry.
Drilled using cable tools in 1902, the first Alaska oil well proved production was possible in the territory – but difficult and costly to transport. Photo courtesy University of Alaska Fairbanks Archives.
“Among Alaska’s vast resources, gold and oil were the rich twins that put the territory on the map near the turn of the last century,” noted Tricia Brown in a 2012 article, “Katalla: Alaska’s First Oil Well.”
“Gold discoveries had been made in the interior and at Nome when, in September 1902, the Alaska Development Company, known as the English Company, made the first commercial oil discovery at Katalla, 47 miles southeast of Cordova,” she explained.
Enthusiastic reporting about Alaska Steam Coal & Petroleum Syndicate’s success brought investors and competing exploration companies. Newspaper articles – often wildly exaggerating the Katalla discovery – encouraged a rush of entrepreneurs looking for opportunities similar to the famous gold rush. “A special dispatch from Valdez announces an immense oil gusher was struck at Cotella [Katalla], on the Southern Alaska Coast, at a depth of 200 feet, reported the New York Times in a vivid (but inaccurate) article. “The gusher took everything away with it, rising nearly 200 feet before it could be capped.”
Adding that the Alaska Steam Coal & Petroleum Syndicate had announced its intention of “refining the oil on the spot,” the Times article concluded that an important new industry had arrived in the territory. A January 1903 article in the St. Paul Globe gushed even more.
Harsh winters at the Katalla oilfield frequently challenged men and equipment. Photo courtesy University of Alaska Fairbanks Archives.
“Oil experts who have just returned to Tacoma from the oilfields of southern Alaska declare that they will rival the fields in Pennsylvania in the matter of production within a short time,” exclaimed the Minnesota newspaper. Such accounts of Alaska Steam Coal & Petroleum Syndicate’s success attracted new companies, including the Alaska Petroleum and Coal Company (1903), Amalgamated Development Company, and the Alaska Oil & Refining Company.
The oil fever centered on Alaska Development Company’s 826-acre Katalla patent along Oil Creek and Arvesta Creek as cable-tool rigs multiplied there. “I expect to see, next year, a dozen big outfits actively at work developing the oil fields surrounding the city,” wrote John F.A. Strong, publisher of the Katalla Herald, in 1907.
“I gave it out that the Alaska Petroleum and Coal Company stood ready to give every encouragement to oil men to come here, and we are ready to let oil developers have from 40 to 80 acres each to begin work upon, on the most liberal terms,” added the future governor of the Alaska Territory.
Territory Boom Town – Where Rails meet Sails
Katalla was on Controller Bay and accessible by water if the weather was right. This was rough country, but planned railroad service from Alaska’s prolific interior copper mines promised new opportunities.
Unloading supplies at the dock in Katalla, Alaska Territory. Photo courtesy Alaska Digital Archives.
As the Alaska Pacific Railway and Terminal Company started building its line, Katalla promoted the venture by declaring, “Katalla, Where the Rails Meet the Sails!” Drilling on the original patent continued and a number of successful wells continued to produce “Pennsylvania quality” crude oil.
And yet before the year ended, Katalla residents would be reduced to subsisting on salt pork and porcupine after storms cut off supplies from the outside. “Ship After Ship Undertakes to Land Relief but in Vain – Six Weeks of the Roughest of Weather,” reported the The Marshfield, Oregon, newspaper.
A view of Katalla’s Front Street not long after the town’s historic 1902 oil discovery. The population would later peak at about 5,000 resident before a dramatic decline. Photo courtesy Alaska Digital Archives.
Violent storms in late 1907 isolated Katalla and destroyed the breakwater along with an 1,800-foot dock under construction by the Copper River and Northwestern Railroad. The village of Cordova about 50 rugged miles west of Katalla was was chosen to be the new terminus and thereby the Katalla oilfield’s nearest railhead.
Katalla was further isolated when the Army’s Washington to Alaska Military Cable and Telegraph System also changed its destination to Cordova. Without a railroad or telegraph, Katalla’s population dropped from a peak of 5,000 residents to 770 residents. Then prospects for Alaska’s first oil boom town got even worse.
Concerned that over development of oil supplies on federal lands would diminish the United States’ petroleum reserves, President William Howard Taft intervened. On November 2, 1910, he issued an executive order preventing further exploration and drilling in the Alaska Territory. Only Katalla’s privately owned 826-acre patent remained open amidst all of Alaska’s vast petroleum potential of almost 425 million acres. Despite this setback, the Alaska Oil & Refining Company rebounded by building Alaska’s first refinery.
Alaska Territory’s First Oil Refinery
The refinery on Katalla Slough serviced local needs for gasoline, kerosene and lubricants. Once a week, the company shipped 60 100-gallon drums to Cordova. Products traveled to markets by boat, barge – or towed in floating tanks. Alaska Oil & Refining operated the refinery until 1915, when the St. Elias Oil Company took over the company’s assets. Petroleum exploration was still limited to the original 826 acres permitted by Taft’s executive order.
St. Elias Oil advised investors of expansion plans to “increase the output of the refinery…pumping four wells, anticipating four more within the year. Will install tanks at Katalla to facilitate immediate shipment.” The company drilled three successful wells (and three dry holes) that helped keep the refinery running as the rest of Alaska imported in excess of 732,000 gallons of illuminating oil and 373,000 gallons of lubricants.
Nonetheless, Katalla’s population dropped to 87 hardy souls by 1920. Congress then passed the Mineral Leasing Act to finally open the rest of Alaska to petroleum exploration. “All the Alaska oil lands were withdrawn in 1910, and patent has been granted to only one claim, which is in the Katalla field,” noted a 1921 report of the U.S. Geological Survey.
“This condition persisted until the passage of the recent oil and gas leasing act of February 25, 1920,” the report explained. “The provisions of this law applying to Alaska appear to be liberal and will permit prospecting the fairly accessible localities near the Pacific where seepages have been found.”
Oil from the Katalla field was processed at Alaska’s first refinery – until it burned down on Christmas eve in 1933. Photo courtesy Alaska Digital Archives.
The 1921 report, “Preliminary report on petroleum in Alaska,” also noted areas with oil seeps “now give promise of being of commercial importance. There are, however, some indications of oil in the extreme northern part of Alaska, a region at present almost inaccessible.”
That same year St. Elias Oil sold out to Chilkat Oil Company and the federal government issued about 400 new exploration permits. But few came to Alaska and none to the Katalla oilfield for the next 65 years. The Alaskan Crude Corporation drilled briefly there in 1985 but suspended operations.
While Alaska’s oil industry struggled, California’s had been booming; by 1921 annual oil production exceeded 77 million barrels with oil selling for just $1.73 per barrel (oil prices would stay below $2 a barrel until 1948). At those prices, transporting oil from Alaskan oilfields made no economic sense. Chilkat Oil’s refinery continued to deliver Katalla oilfield products to nearby customers.
Alaska’s first refinery burned on Christmas eve of 1933, taking with it the fortunes of Chilkat Oil Company and the town of Katalla. The refinery had produced a total of about 6.5 million gallons of distillates, but there would be no more. With no economic engine, Katalla was soon abandoned – with only 12 residents by the 1940s.
When a 9.2 magnitude earthquake raised the land around Katalla by eight feet in 1964, the town’s old waterfront disappeared. “It put the last nail in the coffin,” according to the Anchorage Press. Katalla became a ghost town.
A rare photo of the Swanson River Unit No. 1 well, which in 1957 revealed a major oilfield in Alaska Territory and helped pave the way to statehood in 1959. The image, courtesy retired geologist Doug Baily of Arkansas, should be upside down. The historic rig is seen reflected on reserve mud pit.
Although Katalla’s heritage as home of the first Alaska oil well and refinery was acknowledged in 1974 by the National Register of Historic Places, the town’s 30 years of oil production actually amounted to less than what Alaska’s North Slope would yield in a single day.
Despite its fate, Katalla proved petroleum production was possible in Alaska Territory – but transporting oil to market was difficult and expensive. In 1946, the U.S. Geological Survey and U.S. Navy began an eight-year exploration program, but found only two minor oil deposits after drilling 36 wells.
Swanson River Oil Discovery
In 1957, a remote exploratory well drilled by Richfield Oil Corporation, a predecessor of ARCO, tested at 900 barrels of oil a day, the first significant commercial discovery in Alaska since 1902.
The July 19, 1957, discovery of oil north of Sterling at Swanson River provided, according to Alaska’s first governor William Egan, “the economic justification for statehood for Alaska,” noted a 2017 article, “Oil workers celebrate 60 years of Swanson river.”
Atlantic Richfield had sent geologists Bill Bishop and Ray Arnett to explore the 50,000 acres the company had leased. “Bishop and Arnett drilled a successful oil well at Swanson River, in the northwest Kenai Peninsula. Their announcement of the well on July 23 set off a flurry of economic activity that some compared to the gold rush.”
By 1959, Unocal discovered a major natural gas field near the Swanson River oilfield. When Atlantic Richfield and Humble Oil companies discovered the North Slope’s Prudhoe Bay field in 1968, the largest oilfield in North America inspired the industry’s modern engineering marvel, the Trans-Alaska Pipeline. Outstanding images can be found at the University of Alaska’s Digital Archives.
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The American Oil & Gas Historical Society preserves U.S. petroleum history. Join AOGHS and help maintain this energy education website, expand historical research, and extend public outreach. For annual sponsorship information, contact bawells@aoghs.org. © 2020 Bruce A. Wells.
Citation Information – Article Title: “First Alaska Oil Well.” Author: Aoghs.org Editors. Website Name: American Oil & Gas Historical Society. URL: https://aoghs.org/petroleum-pioneers/first-alaska-oil-well. Last Updated: July 11, 2020. Original Published Date: March 23, 2015.
by Bruce Wells | Jun 28, 2020 | Petroleum Pioneers
Oil discoveries at El Dorado and Smackover brought 1920s drilling booms.
Wildcat wells created two Arkansas oil and natural gas boom towns, boosted the young career of H.L. Hunt, and launched the state’s petroleum industry.
Surrounded by 20 acres of woodlands, the Arkansas Museum of Natural Resources, seven miles north of El Dorado – in equally historic Smackover – exhibits the state’s petroleum history.
The first Arkansas well that yielded “sufficient quantities of oil” was the Hunter No. 1 of April 16, 1920, in Ouachita County, according to the Arkansas Geological Survey. Natural gas was discovered a few days later by Constantine Oil and Refining Company north of the present-day El Dorado field in Union County. But it was January 1921 well in the same field that marked the true beginning of commercial oil production in Arkansas.
When the Busey-Armstrong No. 1 well struck oil in 1921, it catapulted the population of nearby El Dorado, Arkansas, from 4,000 to 25,000. The discovery, 15 miles north of the Louisiana border, was the state’s first commercial oil well.
“Twenty-two trains a day were soon running in and out of El Dorado,” noted the Arkansas Gazette. An excited state legislature announced plans for a special railway excursion for lawmakers to visit the oil well in Union County. Meanwhile, Haroldson Lafayette Hunt arrived from Texas with $50. He joined the crowd of lease traders and speculators at the Garrett Hotel – where fortunes were being made and lost.
H.L. Hunt, who had borrowed the $50, got his start as an independent oil and natural gas producer in El Dorado. Many people said it was his expertise at the poker table that earned him enough to purchase a one-half acre parcel lease. He drilled his Hunt-Pickering No. 1 well, which at first produced some oil, but ultimately was not profitable.
Hunt persevered and in four years had acquired substantial El Dorado and Smackover oilfield holdings. By 1925, he was a successful 36-year-old oilman with wife Lyda and three young children living comfortably in a fine three-story El Dorado home. He will add to his oil patch successes a decade later in East Texas. See East Texas Oilfield Discovery.
Giant Oilfield revealed at El Dorado
Located on a hill a little over a mile southwest of El Dorado, the derrick was plainly visible from the town, according to historians A.R. and R.B. Buckalew. They write that three “gassers” had been completed in the general vicinity, but did not produce oil in commercial quantities. There was no market for natural gas at the time, the authors explained in their 1974 book, The Discovery of Oil in South Arkansas, 1920-1924.
The Garrett Hotel, where H.L. Hunt checked in with 50 borrowed dollars – and launched his career as a successful independent producer.
Yet Dr. Samuel T. Busey was convinced “there was oil down there somewhere.”
The authors added, “among those who gambled their savings with Busey at this time were Wong Hing, also called Charles Louis, a Chinese laundry man, and Ike Felsenthal, whose family had created a community in southeast Union County in earlier years.”
With no oil production nearby, investing in the “wildcat” well was a leap of faith. Chal Daniels, who was overseeing drilling operations for Busey, contributed the hefty sum of $1,000.
On January 10, 1921, the well had been drilled to 2,233 feet and reached the Nacatoch Sand. A small crowd of onlookers and the drilling crew after moving a safe distance away watched and listened.
“The spectators, among them Dr. Busey, watched with an air of expectancy,” noted the historians. “Drilling had ceased and bailing operations had begun to try to bring in the well. At about 4:30 p.m., as the bailer was being lifted from its sixth trip into the deep hole, a rumble from deep in the well was heard.”
The rumbling grew in intensity, “shaking the derrick and the very ground on which it stood as if an earthquake were passing,” the authors report. “Suddenly, with a deafening roar, ‘a thick black column’ of gas and oil and water shot out of the well,” they added.
The gusher blows through the derrick and “bursts into a black mushroom” cloud against the January sky. The Busey No. 1 well produced 15,000,000 to 35,000,000 cubic feet of gas and from 3,000 to 10,000 barrels of oil and water a day.
Petroleum brings Prosperity to Arkansas
Thanks to the El Dorado discovery, the first Arkansas petroleum boom was on. By 1922, there were 900 producing wells in the state.
Civic leaders raised funds to preserve El Dorado’s historic downtown – and add an Oil Heritage Park at 101 East Main Street.
“Three months after the Busey well came in, work was under way on an amusement park located three blocks from the town that would include a swimming pool, picnic grounds, rides and concessions,” notes the Union County Sheriff’s Office. “Culture was not forgotten as an old cotton shed in the center of town near the railroad tracks was converted to an auditorium.”
The 68-square-mile field will lead U.S. oil output in 1925 – with production reaching 70 million barrels. “It was a scene never again to be equaled in El Dorado’s history, nor would the town and its people ever be the same again,” the authors conclude. “Union County’s dream of oil had come true.”
In 2002, El Dorado gathered 40 local artists to paint 55 oil drums donated by the local Murphy Oil Company. Preserving the town’s historic assets, including boom-era buildings, remains a major goal of the local group, Main Street El Dorado, which was the “2009 Great American Main Street Award Winner” of the National Trust Main Street Center.
Second Oil Boom: The Smackover Discovery
Incorporated in 1922, Smackover, Arkansas, had been a small agricultural and sawmill community. Today, the town celebrates its petroleum heritage with the annual “Oil Town Festival” in June.
Prior to the January 1921 El Dorado discovery, the region’s economy relied almost exclusively on the cotton and the timber industries “that thrived in the vast virgin forests of southern Arkansas.”
Six months after the Busey-Armgstrong No. 1, another giant oilfield discovery 12 miles north will bring national attention – and lead to the incorporation of Smackover. A small agricultural and sawmill community with a population of 131, Smackover had been settled by French fur trappers in 1844. They called the area “Sumac-Couvert”, meaning covered with sumac or shumate bushes.
According to historian Don Lambert, by 1908 Sidney Umsted operated a large sawmill and logging venture two miles north of town. He believed that oil lay beneath the surface. “On July 1, 1922, Umsted’s wildcat well (Richardson No. 1) produced a gusher from a depth of 2,066 feet,” Lambert reports. “Within six months, 1,000 wells had been drilled, with a success rate of ninety-two percent. The little town had increased from a mere ninety to 25,000 and its uncommon name would quickly attain national attention”
The oil-producing area of the Smackover field covered more than 25,000 acres. By 1925, it had become the largest-producing oil site in the world. The field will produce 583 million barrels of oil by 2001.
Roughnecks photographed following the July 1, 1922, discovery of the Smackover (Richardson) field in Union County. Courtesy of the Southwest Arkansas Regional Archives.
Visit the Arkansas Natural Resources Museum in Smackover – the heart of the Smackover field. The museum includes a five-acre Oilfield Park with operating examples of oil producing technologies used in south Arkansas oilfields from the 1920s to today.
The Fayetteville Shale brought more drilling to Arkansas.
About one-third of Arkansas’ 75 counties produce oil natural gas. As of 2010, more than 40,800 wells have been drilled since 1921’s Busey-Armstrong No. 1 well in Union County.
According to geologists, the Fayetteville Shale, a 50-mile-wide formation across central Arkansas, promises large quantities of natural gas – and a new petroleum boom for the state. But the unconventional natural gas reservoir requires hydraulic fracturing.
Unlike traditional fields containing hydrocarbons in porous rock formations, shale holds natural gas in a fine-grained rock or “tight sands.” Until recently, most shale formations were not considered profitable areas for production.
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The American Oil & Gas Historical Society preserves U.S. petroleum history. Become an AOGHS supporting member and help maintain this energy education website and expand historical research. For more information, contact bawells@aoghs.org. © 2020 Bruce A. Wells.
Citation Information – Article Title: “First Arkansas Oil Wells.” Author: Aoghs.org Editors. Website Name: American Oil & Gas Historical Society. URL: https://aoghs.org/petroleum-pioneers/arkansas-oil-and-gas-boom-towns. Last Updated: June 28, 2020. Original Published Date: April 21, 2013.
