History

The Start of the U.S. Oil Industry: A Gusher on This Day in 1901

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More than 100 years ago on this very day, the United States’s Oil Industry was born. In 1901, a derrick was drilling just outside of Beaumont, Texas on Spindletop Hill. During this process, a large amount of crude oil began gushing out of the ground, billowing into the air. It coated the landscape in all directions for hundreds of feet. With this celebratory burst, the oil industry was born. This oil geyser was buried about 1,000 feet underground and began putting out 100,000 barrels per day. It took more than a week for the workers to regain control of the situation. From this oil, the refineries got their start. Petroleum, which had been used as a lubricant in the past, started to be used for gas. This gasoline would go on to power numerous modes of transportation including trains, ships, cars, and planes.

What is Crude Oil?

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From this geyser, often termed “black gold,” crude oil would become the first industry in the world to be valued at more than one trillion dollars. This valuable liquid is a mixture of a variety of hydrocarbon molecules and compounds. It is trapped deep underneath the surface of the earth in rocks. This liquid forms over the course of millions of years. During this time, small plants and animals died and settled on the bottom of various waterways. As this material was buried and placed under a large amount of pressure, it began to heat up. Then, it melted into a liquid that became the petroleum we know as crude oil today.

The Rise of the Crude Oil Industry

The search for crude oil began decades prior to this first geyser. During the 1890s, a geologist and businessman from Texas named Patillo Higgins believed that there was oil underneath the hill outside of Beaumont. He gathered up several business partners and founded a business that set out drilling throughout the area looking for this black gold. He named his company the Gladys City Oil, Gas, & Manufacturing Company. Although his company had made a variety of unsuccessful drilling attempts, he was persistent. Just before 1900, Higgins leased a small amount of land on Spindletop to an engineer in the mining industry named Anthony Lucas. On January 10, 1901, Lucas hit his mark and the liquid billowed into the air.  Although at this point Higgins had surrendered his stake in the business, he had made his mark on history.

Rapid Growth for the Crude Oil Industry

Thanks to the discovery, Beaumont exploded. It became known as a boomtown thanks to the discovery of crude oil and the business that came with it. During the three months after the discovery by Lucas and Higgins, the population of the small town would triple. There were all sorts of people flooding the town ranging from merchants, oil workers, engineers, investors, and even con men. The con and scam problems became so bad that many people nicknamed the hill Swindletop. By 1902, there were close to 300 wells that were active on that fateful hill that were being run by more than 500 companies specializing in oil. Many of these companies are still active today including Exxon (called Humble), Texaco (called the Texas Company), and Mobil (called the Magnolia Petroleum Company). Spindletop would go on to experience a handful of booms as more and more oil was discovered. A second discovery took place in the 1920s and then a sulfur discovery gave rise to another boom in the 1950s. By this time, only a few scattered oil wells are still active in the Spindletop area.

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