& Natural Gas Industry
Source: The Handbook of Texas Online
OIL AND GAS INDUSTRY. Luis de Moscoso, a survivor of the DeSoto expedition, recorded the first sighting of oil in Texas. After the expedition was forced ashore in the area between Sabine Pass and High Island in July 1543, the explorers observed oil floating on the surface of the water. They collected the asphaltic substance and used it to caulk their vessels. Thereafter, settlers in Texas and visitors commonly observed seepages of crude oil. During his visit to Texas in 1854, Frederick Law Olmsted noted "a slight odor of sulphurreted hydrogen" at Sour Lake. The discovery and production of oil occurred sporadically during the second half of the nineteenth century. After the Civil War, encouraged by the growing national market for kerosene and other petroleum products, Lyne T. Barrett drilled and completed a well near Oil Springs in Nacogdoches County, but a decline in prices barred further financing of the venture.
In 1886, George Dullnig, a Bexar County
rancher, discovered a small quantity while drilling for
water, but it was not sufficient to justify additional
development. The first economically significant discovery
came in 1894 in Navarro County near Corsicana. The
Corsicana oilfield developed gradually and peaked in
1900, when it produced more than 839,000 barrels of oil.
The first relatively modern refinery in Texas, operated
by the J. S. Cullinan Company, opened at the field in
1898. The major importance of the Corsicana field lay in
establishing the potential for commercial oil production
in Texas. Its success prompted random exploration in
various parts of Navarro County, which led to the
discovery of the Powell oilfield in 1900. This field rose
to 673,221 barrels of oil a year in 1906 and peaked at
33,177,831 in 1924 after the Woodbine sand was found in
January of the previous year.
Following three shallow failures, the Gladys
City Oil, Gas, and Manufacturing Company hired Anthony F.
Lucas, who supervised the drilling activity of the Hamill
brothers of Corsicana. After several additional failures,
work resumed with the financial backing of Pittsburgh
investors. With improved equipment, Lucas spudded in a
well on October 27, 1900; it came in at 1,139 feet on
January 10, 1901, and produced more than an estimated
75,000 barrels of oil a day. The new Spindletop oilfield,
which produced the first oil boom in Texas, reached peak
production of 17,500,000 barrels in 1902, after which it
diminished to insignificance until it was reentered in
1925 and during the 1950s and 1960s. During the 1970s,
the field produced sizable quantities of sulfur.
In 1904 the total pipeline runs of the
Security (Standard Oil of New Jersey), Texas, Guffey, and
Sun pipelines was about 18,000,000 barrels. The largest
producer in Texas was the J. M. Guffey Petroleum Company,
which produced more than a third of the state's oil.
Texas was still the province of small producers in 1905,
when only three Texas companies produced more than
$45,000 worth of crude oil. The Rio Bravo Oil Company
(part of the Southern Pacific Railroad) and the Landslide
Oil Company were the only other firms to produce more
than $45,000 worth of crude during the third quarter of
Oil production in the upper Gulf Coast area
was boosted by numerous discoveries, the most prolific of
which were the Orange (1913), Damon Mound (1915), Barbers
Hill (1916), West Columbia (1918), Hull (1918), and Blue
Ridge (1919) oilfields. Thereafter, though exploration
was spread over more of Texas, large discoveries were
made in the Pierce Junction (1921), Thompson (1921; see
FRIO DEEP-SEATED SALT DOME FIELDS), High Island (1922),
and Sugarland (1928) fields during the 1920s.
Thereafter, the Burk field followed in 1912, Iowa Park in 1913, and the composite Wichita County Regular field in 1915. Major discoveries followed in the region, including the Ranger field, by the Texas Pacific Coal Company in 1917, Burkburnett Townsite and Desdemona in 1918, and K.M.A. (after the Kemp, Munger, and Allen Oil Company) in 1919. Further developments occurred in Archer, Coleman, and Young counties in 1921 and in Eastland, Stephens, and Shackelford counties in 1922. During this same period numerous smaller fields were discovered and developed and larger fields were extended and completed to greater depths, making the region of increasing importance in the industry. In 1924 about one-third of the new wells in Texas were completed in the Holliday-Archer area alone.
Much as in the Gulf Coast area, expanded oil production in North Texas brought further industrial development. Service and supply companies opened offices in Wichita Falls and, later, in Fort Worth. Gulf Oil Corporation opened a refinery in Fort Worth in 1911, followed by Pierce Oil Corporation in 1912 and Magnolia Petroleum in 1914. North Texas was integrated into the industry through pipelines constructed by the Texas and Gulf pipeline companies in 1912.
The Prairie Pipeline Company extended lines
from Ranger to Galveston and from Ranger to Cushing,
Oklahoma. Natural gas, produced in most of the fields in
the region, was commonly piped to nearby towns and
cities. With the construction of a carbon black plant in
Stephens County in 1923, the Texas petrochemical industry
was born. Wichita Falls, nearer early production, began
as the service and supply center in the region; its
population grew from 8,200 in 1910 to 40,079 in 1920.
However, as production moved southward and the Texas and
Pacific Railway extended spur lines to the new areas,
Fort Worth, served by the T&P, supported much of the
new exploration and development.
After the round of early drilling, additional gas wells were drilled for local consumption, and a line was laid to Amarillo in 1923. An oil discovery by Gulf in 1921 spurred activity briefly, but work in the region lagged until 1923, when J. C. Whittington's No. 1 Sanford well in Hutchinson County was completed as a flowing well. By 1926, the Panhandle was a major producing region. Most of the oil came from the Borger area and other parts of Hutchinson and Carson counties, though discoveries had also been made in Gray, Potter, Moore, and Wheeler counties.
Peak production during the era of exploration in the Panhandle was reached in 1927, at 39,431,789 barrels, principally from Hutchinson County. After several years of declining yields, the full development of discoveries in Gray County produced a rebound in production to 32,274,822 barrels in 1930. During 1926, seven oil companies constructed pipelines and storage facilities in the area, some connecting to systems that reached the Gulf Coast and Oklahoma. Related industrial activity began in 1922 with the construction of a gasoline stripper plant, the American Refining company (later the Phillips Panhandle Refinery); carbon black operations began with the Western Carbon Company operation in Carson County in 1926.
Amarillo grew with this activity, from 15,494 in 1920 to 43,142 in 1930, but much of the population growth occurred in such new settlements as Borger and in older shipping points such as Panhandle. The former, founded by A. P. "Ace" Borger in February 1926, grew rapidly during its first year, like boomtowns before and after it. Estimates place its population at between 10,000 and 20,000. After it developed the reputation of being a wide-open settlement sheltering legions of moonshiners, gamblers, prostitutes, and hijackers, the Texas Rangers arrived in force, and drove scores of miscreants out of town, much as they had done in other parts of the state; they repeated the performance in Wink in 1929.
In the Panhandle, oil and gas activity
diversified the regional economy, as it had already done
in other sections of the state. Repeating a pattern that
began in Beaumont, oil and gas also offered alternative
employment to sharecroppers and their sons, many of whom
left the land and followed drilling rigs to successive
booms over Texas. Model-T and Model-A Fords, with boxes
and suitcases strapped to their trunks, rear seats filled
with children and household goods, became familiar sights
in most parts of the Texas during the first three decades
of the twentieth century. Ragtowns, tent cities, and
shotgun houses were as common in the oil patch as dog-run
houses in the countryside and mail-order bungalows in
towns. Gushers and forests of drilling rigs replaced
herds of longhorn cattle as symbols of Texas life.
In random drilling near Laredo, Oliver W. Killam made small commercial discoveries in the Mirando City and Aviator fields beginning in 1921. Killam and his associates operated a medium-sized refinery in the area and built a pipeline to carry crude oil to the Texas and New Mexico Railroad. During the late 1920s, additional discoveries were made in Southwest Texas, including Government Wells in Duval County, adjacent to the Jennings gas field, and smaller gas production in the Agua Dulce, Kohler, and Three Rivers fields. Even after oil prices declined in 1929, exploration continued in the region, leading to the discovery of the Pettus Townsite field in Bee County in 1929.
The steady progress of geological mapping led to the discovery in 1929 of the Darst Creek oilfield, the region's first major oilfield. In view of the glut of crude oil, operators in the field negotiated an agreement to limit production, with the cooperation of the Railroad Commission, which supervised the operation of the pact. Natural gas discoveries of importance were made at White Point in 1914, and near Laredo in 1911 and Kingsville in 1920 and 1922. As was common in other areas of natural gas production, service was first extended to communities near the fields, beginning with Laredo in 1911 and San Antonio in 1922.
Completion of a gas well that produced 41,000,000 cubic feet per day in the Carolina field confirmed the presence of large quantities of natural gas in and around Webb County. During the 1920s, further important discoveries of gas were made in Southwest Texas. By 1927, natural gas production in the region passed four billion cubic feet a day. Natural gas pipelines were constructed from Live Oak County and from White Point and Refugio to Houston in 1926. Lines were also built from Mirando to the lower Rio Grande valley and from other fields to New Braunfels, Seguin, San Marcos, and Austin. Construction of trunk lines to deliver gas from the region to the Gulf Coast began in 1925 and connected to home and industrial distribution systems in Houston and Baytown during 1926 and 1927.
Thereafter, the pipeline system was upgraded and expanded, especially during the 1950s and 1960s, making this region a gas-producing province of great importance to the state. With the completion of these lines and those from the Panhandle to the Middle West, the natural gas industry in Texas was established as an important part of the state's economy. The comparatively modest oil production of Southwest Texas and the absence of sufficient outlets for petroleum products retarded related industrial development until the ship channel was completed in Corpus Christi in 1926. Thereafter, the city became attractive as a site for refinery location.
Humble built a small refinery at Ingleside,
and a large number of small plants opened in Corpus
Christi, Refugio, and Port Lavaca during the 1930s. Of
this group, the largest were in Corpus Christi, operated
by the Taylor Refining Company, the Pontiac Refining
Company, and the Southwestern Oil and Refining Company.
The Grayburg Oil Company of San Antonio extended the old
Somerset field with deeper drilling and produced about
1,000 barrels of oil per day, which the company ran to
its local refinery; products were sold in a dozen
Grayburg stations in the area.
The Luling field, about forty miles south of
Austin, was the scene of random drilling during the third
decade of the century. The United North and South Oil
Company of Edgar B. Davis brought in the first
significant production in the Edwards lime formation in
1922. In 1924 Magnolia ran a pipeline to Luling that
connected with its refinery at Beaumont. Two years later
the Lytton Springs field, twenty-eight miles south of
Austin, opened; it sustained interest in the prospects of
the region in part because it, like the Thrall field,
produced from the "serpentine plug," an altered
igneous-rock formation. The first big year for
exploration in the region came in 1928, with the
discovery of the Salt Flat field, the second major
Edwards lime production.
The cumulative potential production of these
fields made the thinly populated region of great
importance and led to the growth of Big Spring, San
Angelo, Midland, and Odessa and to the establishment of
new settlements in Upton, Crane, Howard, and Winkler
counties. With declining oil prices and limited pipeline
transportation to Gulf Coast refineries, however, the
region developed relatively slowly. Thus, producers in
the Yates and Hendrick fields negotiated voluntary
limitations of production, under the auspices of the
Railroad Commission. With increased production from
California, Oklahoma, and the Van field of Texas came
lower crude oil prices in 1929, and this region settled
into relative inactivity by the end of the year.
The approximate size of the field, about forty-three miles long and 12½ miles wide, was largely established during the next four months: in December, Ed Bateman and Associates' Crim No. 1 extended it nine miles, from the Joiner well to the vicinity of Kilgore; during January 1931, Moncrief-Faring-Arkansas Gas and Fuel Company's Lathrop No. 1 found oil twelve miles from Bateman's well. The giant East Texas oilfield ultimately extended into parts of Upshur, Gregg, Rusk, Smith, and Cherokee counties. The flood of production from the field depressed exploration in West Texas and Southwest Texas until the middle of the 1930s, and the economic impact of the discovery compounded the negative effects of the Great Depression.
By May, average daily production from the field reached 303,750 barrels; by June, crude oil in East Texas was selling for twenty-two cents a barrel, and higher gravity oil in the Mid-Continent area of Oklahoma, Kansas, and North Texas had fallen to twenty-seven cents. The field developed rapidly because more than three-quarters of the productive and prospective acreage was owned by independent operators and wells were relatively inexpensive to drill and complete. Operators had drilled 1,100 wells by mid-1931 and more than 2,000 more by the end of the year.
By mid-year, thirty-one refineries had been
completed and six more were under construction. Taylor
Refining Company, of Tyler, the East Texas Refining
Company, of Dallas, Central Refining Company, Dallas, and
Sinclair Refining Company, Fort Worth, were the largest
processors. One hundred one-barrel and two-barrel
"cookers" were also manufacturing gasoline and
kerosene in the field. Production in the field soared
from 109,561,000 barrels in 1931 to 156,109,346 in 1932
and 211,586,118 in 1933. During the latter year, the
posted price varied greatly, from $.75 in January to $.10
in April, back to $.75 in August and to $1.00 from
September 30 to the end of the year. "Hot" oil,
a term that meant, variously, oil produced in excess of
Railroad Commission orders and oil that was siphoned from
pipelines and otherwise dishonestly obtained, was
reported as selling for as little as $ .03 a barrel
during the year.
A partial remedy for illegal shipments came in the fall of 1933, when Section 9(e) of the National Industrial Recovery Act authorized federal interdiction of interstate shipments of oil produced in violation of state conservation regulations. Two years later, this provision was made a free-standing statute. In the meantime, continued improvement in production technologies, including instruments for measuring the bottom-hole pressure in oil wells, made it possible for the Railroad Commission to enforce allowable production levels through the legal system of the state. The increasing ownership position of major refiners and the decline of "edge" wells also facilitated limitation of production.
At the end of 1935, there were still more than
1,000 operators in the field, producing oil from 19,313
wells. Reported production for the year was 158,599,275
barrels. By 1937 major refiners processed half of the oil
from the field, and only half a dozen significant
independent refiners remained in the field. The Texas
Company operated the largest plants, in Neches and West
By the end of the decade the region had eleven refineries, the largest belonging to the Cosden Petroleum Company, in Big Spring, and the Col-Tex Refining Company, in Colorado City. Two carbon black and thirteen natural gasoline plants were also in operation at the time. In the Panhandle, oil discovered during the 1920s was developed more fully during the next decade, when it supported eight refineries, the largest of which was operated by the Phillips Petroleum Company in Borger in 1938. Thirty-one carbon black plants were in operation in the Panhandle during the same year, along with forty-two natural gasoline plants, which stripped liquid from the vast quantity of natural gas produced in the region.
Southwest Texas continued to be active during the 1930s, with a relatively large discovery, the Tom O' Connor field, in 1934. Other finds of regional significance included the Greta, Sam Fordyce, Loma Novia, Lopez, Placedo, Plymouth, Flour Bluff, Benavides (or North Sweden), and Premont fields. Additional refineries were constructed, bringing the number to twenty-six at the end of the 1930s. The largest installation was Humble Oil and Refining Company's expanded refinery at Ingleside. During this period, the continued construction of natural gas pipelines tied the growing volume of natural gas production to urban markets and to the growing petrochemical industry on the Gulf Coast.
The major find in Central Texas also occurred
during the depression, with the discovery of the Pearsall
field in the Austin Chalk of Frio County in 1936. East
Texas production was supplemented with oil from the Talco
field the same year. In 1931 Conroe oilfield set off
renewed exploration in the Gulf Coast area. Thereafter,
large production was found in the Tomball (1933), Old
Ocean (1934), and Anahuac (1935) fields, in addition to
smaller finds at Manvel (1931), Hastings (1935), and
Webster (1936). Natural gas resources in the region were
boosted with major discoveries in the Old Ocean field in
1936 and with the first of a long succession of gas
discoveries in the complicated and prolific Katy field in
The wartime system of price controls and rationing lasted until 1946. During the war years, 1939-46, Texas oilmen found seventy-seven new fields or producing horizons. Many of these discoveries, modest by prewar standards, were in older fields, but they made significant additions to reserves in Texas. New development occurred in most sections of the state, except the Panhandle, North Texas, and Central Texas. The Oyster Bayou field in Chambers County went into production in 1941 and was tied to upper Gulf Coast refineries. In the Seeligson field of Southwest Texas (Kleberg and Jim Wells counties), six new producing horizons were discovered; 19C produced nearly 100 million barrels by 1994.
In this same region, the TCB 21-B field (Tijerina-Canales-Blucher), brought significant gains in reserves. The discovery of the Hawkins Woodbine field in East Texas was the largest significant find in Texas during the entire period. Quitman Paluxy field also added significantly to the reserves of this region. In West Texas, Wasson 6000' (1940) and 7200' (1941), McElroy (1941), Fullerton (1941), Mabee (1943), Sandhills-McKnight (1944), Anton-Irish (1944), Fullerton 8500' (1944), TXL Devonian (1944), Midland Farms (1945), Fullerton San Andres (1945), Block 31 (Devonian) (1945), Levelland (1945), and Fullerton (Ellenburger) (1945) were important discoveries and continued the development of this prolific region.
Old production was extended on the Louisiana border with the Rodessa field. Major additions to natural gas reserves were made with the discovery of Carthage (Pettit, Lower Gas) and Opelika (Transpeak) fields in East Texas and the Headlee (Devonian) and Brown-Bassett (Ellenburger) fields in the Permian Basin.