Why you should care

Because the Spindletop Gusher kicked off the petrochemical industry. You use plastic, right?

After months of drilling into the cold, hard, East Texas dirt, a handful of tired workers gathered around a hole and saw something strange: what appeared to be mud bubbling up from the earth. “Run!” they shouted. What happened next looked like Mother Nature blowing Coca-Cola out of a straw.

The pipe they had drilled more than a thousand feet into the ground shot sky-high. Behind it came a blast of oil, spraying 100 feet into the air and raining down on the scattering men. They were soon covered in black gold, but the only color the men saw that day was green.

For nine days, the Spindletop well drenched the area with 900,000 barrels of oil.

When the Spindletop Gusher — named for the modest hill it sprang out of — started flowing on Jan. 10, 1901, so too did the modern petroleum industry. Spindletop was the most productive oil field the world had ever seen. And just as experts did back then, forecasters are once again training their eyes on where the price of oil is headed. Down from $100 a barrel last summer, some now predict it will drop as low as $40, according to Goldman Sachs. So it’s worth remembering where it all got started.

For nine days, the Spindletop well drenched the area with 900,000 barrels of oil. It became known as the Lucas Gusher, named after the mining engineer who manned the project. The roughnecks at the site could never have imagined the scale of the industry their work would yield. Within a year, the closest town to the site, Beaumont, grew fivefold, and 500 corporations moved in to the area. (You might recognize a few: Sun Oil, Gulf Oil and Exxon.) More than $200 million in oil-related investment poured into Texas that year. And U.S. crude production jumped from 57 million barrels in 1899 to 126 million barrels in 1905 — with the Lucas Gusher producing 17.4 million barrels in 1902 alone.

Spindletop wasn’t significant just for the quantity of its oil, but also for the kick in the pants it gave petroleum technology, a sector that had been stagnating as electricity slowly replaced kerosene, once the primary use for crude oil. To stop the flow at Spindletop, engineers had to create an on-the-fly blowout preventer, the first of its kind — and notably the predecessor to the device that failed in the 2010 BP oil spill in the Gulf of Mexico. The gusher also led to the creation of what’s known today as the Christmas Tree, the scaffolding-type structure built around drill sites. And it was there that workers first experimented with a powerful rotating drill, a major improvement on the cable system that until then had been relatively meek at tapping the Earth.

It also did wonders for the automotive industry. Steam, electric and internal combustion engines were featured at the U.S. National Auto Show in 1900, but “the combustion engines were the least popular because they were too loud,” says American Oil & Gas Historical Society President Bruce Wells. Fate fixed that. After Spindletop, oil prices dropped to just 3 cents a barrel; three years later, Henry Ford founded the Ford Motor Company, and suddenly all that cheap oil had a new use.

According to Ryan Smith, executive director of the Texas Energy Museum in Beaumont, Spindletop was a real “game changer.” Not only did it launch the petroleum and car industries, it also helped spawn an entire petrochemical industry, which now produces everything from plastic to crayons.

And those men who ran for cover back in 1901? They kept running — all the way to the bank.

This OZY encore was originally published in February 2015.

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