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Rise of Oil Production


Oil Wells:
In 1859 when Colonel Drake drilled the first oil well in the United States in Pennsylvania, he established a more reliable method for obtaining oil. In 1861, Humboldt County possesed the first manually drilled oil well in California, but this first endeavor was unsuccessful. By 1865, 65 companies were drilling for oil in California with no success. In 1866, after repeated tries, the first commercially productive oil well in California was completed on Rancho Ojai and it produced 15-20 barrels of oil a day. Later in 1867, the first oil refinery opened in Newhall and in 1879, the first oil pipeline, spanning five miles, connected the refinery to Pico Canyon. The opening of this refinery was driven by California's switch from candles to kerosene lamps. The discovery of oil in Pico Canyon led to the formation of Pacific Coast Oil Co., which later became Standard Oil Co. of California and is today known as Chevron.

Growing Demand:
Most oil from Ventura County and Newhall fields was shipped to San Francisco, where it was in high demand, and companies faced high railroad transportation rates. To reduce costs, a pipeline was laid in 1886 from Newhall to the waterfront in Ventrua and two wooden steamers, with oil transport tanks built in 1888, transported oil up and down the coast from Ventrua to San Francisco. In 1890, another oil company, Union Oil Company of California, was founded in Santa Paula and is now known as Unocal. With these two major companies and many other smaller ones, California oil industry grew rapidly. Growth was also driven by events like California's first oil "gusher", which occured in February 1892 at Adams Canyon, near Santa Paula, at Union Oil's well No. 28. Upon hitting oil, the well blew out of control producing 1,500 barrels a day. This was the largest well in the state, but with no storage facilities available, most of the oil ran to the ocean.

Booming Business of the 1900's:
In 1896, the first United States offshore wells were drilled in Santa Barbara County, providing a new way to access oil. Oil production continued rising, and by 1905, California was producing 34 million barrels of oil a year. Drilling of new wells continued and current ones were made deeper. In 1910, Union Oil Company continued drilling a recently obtained well, called Lakeview, in the Midway-Sunset oil field to a depth of 2,225 feet. On March 15, the well flowed out of control and cotinued to do so for 18 months, producing an estimated 8.2 million barrels of oil during that time. After this disaster, no well in the United States has been drilled as deep as the Lakeview Gusher.

Signal Hill, north of Long Beach, covered in oil derricks in 1930.
By 1920, oil production was at 103.4 million barrels a year and by 1930, it was at 227.3 million barrels. Lowered oil prices due to the Great Depression brought oil production to 223.3 million barrels in 1940, but during the war years, oil production rose. As time passed, fewer new oil fields were discovered and during 1960 to 1970, the only new large oil discoveries occured offshore Santa Barbara County. During the 1970's steam-injection techniques as well as increased demand generated by the Arab oil embargo increased California oil production, and by 1985, California's oil production reached a historic all time high. A decline began in 1986, due to the collapse of worldwide oil prices, and continued into 2003.



Sources:

Department of Conservation. 2005. "Oil and Gas Production: History in California". California Department of Conservation-Division of Oil, Gas & Geothermal Resources.

Chevron Corporation. 2005. "Company Profile". Chevron.

Unocal. 2005. "A History of Unocal". Unocal-A Chevron Company.


     
     
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Last modifed January 9, 2006