Unit Ten: The Age of Oil

1. Unit Ten: The Age of Oil Section One Notes: Oil in Texas and Continued Reform

2. Leading Industries in the Late 1800’s Some of the most important and profitable industries in Texas continued to be ones that were linked to agriculture, like flour milling, cottonseed oil production, and meat packing. In the 1890’s, the lumber industry increased due to the railroads, as trains used wood for fuel. Near the end of the 1800’s, the mining industry began to develop in Texas when trains began using coal instead of lumber, which made them faster and more efficient.

3. The Search for Oil in the 1800’s The demand for oil rose significantly after scientists invented kerosene in the mid-1800’s, which was a fuel for lighting that was made from coal or petroleum. Kerosene was less expensive and dangerous to use, so it was in great demand. The first major oil strike in the U.S. occurred in the late 1850’s in northwest Pennsylvania. Many Texans began looking for oil. Some found oil wells, but they were not big enough to pay for the cost of drilling.

4. Important Dates in Oil History • Melrose Petroleum Oil Company – drilled the first successful oil well in 1866 in Texas. • In 1894, oil was found in Corsicana, Texas, which encouraged more drilling in East Texas. • In 1909, Howard Hughes developed a new type of drill bit called a rotary drill bit. It could penetrate medium and hard rock while going ten times faster than previous drill bits. It allowed for drilling in areas with very hard rock so they could reach the oil underground.

5. The Automobile and Petrochemical Industries Just as the oil business began to grow, electricity replaced kerosene for lighting. Luckily for oil companies, new uses for petroleum were being discovered. Oil began to replace coal to run ships and trains. After the internal combustion engine was invented, gasoline became used to run cars. Soon, the demand for gasoline grew. Oil was also used for the making of petrochemicals, such as rubber, plastics, and carbon black, which is used to make ink, tires, and other products.

6. The Spindletop Strike A man named Pattillo Higgins believed that he could find oil under a salt dome at a place called Spindletop Hill, or Big Hill, near Beaumont, Texas. Drilling began there in June of 1900 but at first, very little oil was found. He asked other people to invest in new machinery so that he could drill deeper. The big oil strike occurred on January 10, 1901. The plume of oil shooting into the air could be seen more than 10 miles away. Over the next nine days, over 800,000 barrels of oil shot out before workers could cap it.

7. Boom and Bust after Spindletop The discovery of oil at Spindletop led to the Texas oil boom and an increase in jobs in Texas. In 1902, Spindletop produced over 17 million barrels of oil. Wildcatters, or independent oil operators, came searching for new fields, and hundreds of people created oil companies and began drilling wells. With so many barrels being produced, the supply exceeded demand and the price of oil went down to 3 cents a barrel.

8. Boom and Bust Continued… Then, Spindletop began to dry up. Many companies went out of business. Some companies that survived became major oil tycoons, like J.S. Cullinan’s Texas Fuel Company, which later became Texaco. Though many companies went out of business, the early oil boom was important to the Texas economy. They employed thousands of Texans and helped to boost other businesses throughout the state.

9. Oil Business Expansion in Texas Though Spindletop dried up, many people began drilling for oil in other parts of the state, such as East Texas, North Texas, and into the Panhandle. In 1915, Texans sold more than 13 million dollars worth of oil. Some companies began to practice vertical integration – meaning that they owned businesses in each step of the manufacturing process. For example, the Texas Company began to drill, transport, and refine their own oil. Other business owners stuck with horizontal integration instead.

10. Boomtowns Before Spindletop, Beaumont had about 9,000 residents. Within two years of the strike, 50,000 people called Beaumont home. The discovery of oil led to an increased population in almost all towns nearby. Many towns also boomed with economic success, and these were called boomtowns. They were usually dirty, crowded, and rough places where everyone was looking to make money.

11. The Effects of the Oil Boom • Boosted the state’s economic growth • Provided many jobs to people of all ethnicities throughout the state • Laws were passed to protect the environment, prevent the wasting of oil, and regulate the railroad industry • Education programs began to be funded by taxes on oil production • People who became very wealthy became philanthropists and began giving money to schools, hospitals, and other institutions

12. Drilling Technology (Just in Case!) • Rotary Drill Bits – penetrates medium to hard rock, allowing for deeper drilling on land and in the ocean. • Directional drilling – the practice of drilling non-vertical wells. Allows drilling to occur in different landforms. • Deep Sea Drilling – drilling that can occur in the depths of the ocean. New oil reserves have been found and the industry has continued to grow.

13. Progressive Era (1880 – 1920) While all of this was occurring, the progressive movement continued. Legislative reforms were passed in the areas of labor, child labor, education, prisons, banking, and public safety. These reforms continue protecting Texans today, but back then, most reforms ignored the needs of minorities.

14. Populism The populist movement continued to fight for the rights and benefits of farmers and rural citizens of the state of Texas. The Farmer’s Alliance, the Grange, the Texas Farmer’s Union and other populist groups fought for the government regulation of business, such as railroad, telephone, and later, oil companies.

15. Movements • Women’s Suffrage Movement – Fought for the right of women to vote. On August 18, 1920, the 19th Amendment was passed and women throughout the United States were given the right to vote. • Temperance Movement – Pushed for an end to the sale, consumption, and manufacture of alcohol. On January 17, 1920, the 18th Amendment was passed and outlawed alcohol in the United States. • LULAC – League of United Latin American Citizens, formed in Corpus Christi in 1929 to support the rights for Spanish speaking people. • Petticoat Lobby – Headed by Jane McCallum, the Petticoat Lobby worked for education and prison reform, prohibition, mother and child health, literacy, and the elimination of child labor.