Drilling for Black Gold with “California Oil World,” 23 November 1922

by Paul R. Spitzzeri

Whatever the results of the recent United Nations Climate Change Conference in Glasgow and the so-called Glasgow Climate Pact, it seems clear that the world’s dependence on fossil fuels will continue to be an enormous challenge to the achievement of any realistic goals to combat the worst effects of climate change.

Nearly a century ago, oil production was hailed as another of the many economic boons to greater Los Angeles and, of course, no one had any clue of the long-term effect that the industry would have on the region and the planet as the search for petroleum and its resulting riches was at a peak frenzy.

Tonight’s featured object from the Homestead’s collection is a reflection of the oil boom that engulfed the area during the early Twenties and the 23 November 1922 issue of California Oil World is filled with information about the industry locally and more broadly. The headline “Huge Surplus Keeps Up Despite Great Demands” concerns the fact that, while Ocober’s demand for oil went up by some 50,000 barrels, the statewide surplus topped 1.3 million barrels.

There was a total of over 57.5 million barrels as of the end of October and the expectation was that the amount could top 60 million by the end of the year because average daily production for November was expected to grow by 13,000 barrels. Even with a drop in production in Mexico and growing exports from the Golden State to the East Coast, there was not enough of a market for the burgeoning production.

Major oil companies like Union, based in Los Anglees, Standard Oil of New York and Standard Oil of New Jersey had executed contracts with the federal shipping board, with the latter ordering 10 million barrels, much of it from California, so there was some relief expected, but, it was added, “production is being pushed too rapidly for the producer to get what he should.”

With October’s exports being the “largest by far California has ever known,” it was anticipated there would be a drop in November “due to the fact that consumers have stocked themselves for a substantial period ahead” while cargo ships were not expected back for some time because of long voyages.

Despite the high levels of production, the piece ended, “field prices in California are holding up very well in the face of the surplus” and companies operating in the San Joaquin Valley were hailed for “shutting down many wells and waiting until the oil is needed.” This, however, was not replicable in greater Los Angeles because this would require “general consent of all producers and land owners, and this seems out of the question.”

Another front-page piece concerned the reort by the American Petroleum Institute that production of crude in California for October was over 13.4 million barrels, which was a daily increase over the prior month of north of 26,000 barrels. The paper observed that this was “a record exceeding that of any State in the history of oil” and “puts California far in the lead of the nation, and of the entire world.”

Consumption was rapidly increasing, as well, with September’s total of just over 10.2 million rising dramatically to over 12.1 in October with the result that consumption was near double as a daily average than production, but that related back to the surplus matter noted above. As for the dominant fields of the period, it was reported that “the biggest increase was at Santa Fe Springs and amounted to 16,000 barrels daily.”

Huntington Beach was the second largest growing field, but was only a little more than half of what was being produced at the former. In fact, it was noted that “the combined increase of these two fields was only 1,500 barrels less than the increase of the entire state.” The third major local field, Long Beach, grew by not quite 2,600 barrels each day, while Coyote Hills in Fullerton and La Habra, despite having no new wells, also grew by some 2,000 barrels.

As for new well completion, October included 84 of these with initial daily production topping 67,000 barrels, a decline from the previous month when almost 100 wells were brought in and producing over 76,000. Notably, the San Joaquin Valley did not see much of a leap in production from one month to the other, with the major Midway-Sunset field, southwest of Bakersfield and second only to Long Beach in production, slightly increasing by 1,300 barrels a day for a total of about 2.44 million barrels per month.

In addition to the increase at Long Beach, which yielded nearly 2.8 million barrels a month, Santa Fe Springs burgeoned by 16,000 and Huntington Beach-Newport jumped by over 8,500. Notably, some of the older fields were declining, such as Fullerton (also including the Brea Canyon and Olinda sections), down about 500 barrels a day; Whittier, which was a small field and down just slightly; and Montebello, where the Temple family had its lease with Standard Oil of California and where production slipped over 4,000 barrels a day.

This decline did not bode well long-term for Walter P. Temple, who was ramping up his investment in real estate development in Los Angeles, San Gabriel, El Monte, Alhambra and, the next spring, his founding of the Town of Temple, renamed Temple City in 1928. He turned his attention to seeking a replication of Montebello in other petroleum prospecting projects, including at Huntington Beach and Signal Hill (part of the Long Beach field), but, unfortunately, he was not able to bottle lightning twice.

Notably, development continued its general upward swing, even as new rigs dropped from 129 in September to 119 in October, while active drilling for wells fell from 612 to 590 and completed ones slipped from near 100 to 84 and daily initial output fell from over 76,000 barrels to just north of 67,000. These numbers, though, compared to the prior four years, showed just how expansive production was in the Golden State during this peak period.

In 1918, there were 50 completed wells and that number stayed consistent in 1919 and 1920 and increased slightly to 57 in 1921. Daily initial ouput ranged from just about 9,500 to 15,600 duing those four years, a far cry from recent totals. Significantly, there were actually fewer wells in October 1922, some 8,900 than in the prior two years, but they were far more productive, reflective in that surplus, despite heavy demand.

There were short notices of individual wells, such as a 4,200 barrel producer brought in at Long Beach by the Petroleum Midway company, while Occidental Petroleum, founded two years earlier and many years later taken over by Armand Hammer, was looking for success with a Santa Fe Springs well being drilled by another firm.

Another Santa Fe Springs well mentioned was the second drilled by the fast-talking C.C. Julian, whose first well came in not long before ad generating over 1,600 barrels per day, and #2 was reportedly near 3,000. Julian’s initial success led hm to pursue an incredibly aggressive stock sales promotion that was widely-known for its snappy prose, but also got him into significant trouble with state regulators, leading to legal trouble that lasted for years until his suicide at Shanghai in 1934.

Another interesting shorter piece was about “Oil Industry’s Growth Since Drake’s First Well” and included a map showing the United States and production in seventeen states with 275,000 total producing wells owned by 14,000 producers generating 1.5 million barrels daily. Oklahoma was a massive producer, as was Texas, while California was at 382,222 per day to date in 1922. Louisiana, Kansas, Wyoming were also decent producing states at the time.

The accompanying text noted that Edwin L. Drake, who brought in America’s first well at Titusville, Pennsylvania, extracted 25 barrels a day at a time when “the world was using fats and greases for illuminating and lubricating purposes and the automobile was unknown.” In 1922, though, there were “upwards of 11,000,000 automobiles and thousands of tractors, oil-burning ships, aeroplanes, submarines, motor-boats and portable engines [that] depend on oil and its products for power and lubrication.” One could only imagine what that number is now, a century later and it is also noteworthy to ponder this statement:

The oil industry, under the impulse of the demand created by the internal combustion engine, has attained this great growth, necessary to satisfy the demand for its products, on a foundation of commercial and economic freedom.

It added that Drake, when his pioneering effort was completd, “found no ownership of oil, no combination of interest, no impediment in the holding of lands which would block his effort to produce effort” and claimed that the same conditions applied over six decades later so that “the entire country is open to the prospector and there is none to say who may or may not produce oil.” Of course, the big concerns, the several Standard companies, Shell, Union, and others dominated many areas, but it is true that, in those days, the small producer often could strike it big, even if the likelihood of that happening would diminish over time.

Reports from the State Mining Bureau on new wells and drilling operations over the previous week, statistics on oil stock trading (these comprised 97% of all activity on the Los Angeles Stock Exchange—small as it was with not quie a million dollars in business during the prior week), and the listing of newly formed oil companies, including the Snowolene, highlighted in this blog previously, are also of interest.

A piece about the newly created Comet Oil Company looking to build a refinery at Vernon mentioned that its chief executive was Henry S. Botsford, a veteran of Union Oil before becoming general manager of Puente Oil, formed by William R. Rowland, son of Rancho La Puente grantee John Rowland, and which had wells in today’s Rowland Heights. Puente merged with Columbia Oil, owned by William B. Scott, and Rowland, Scott and Los Angeles Times publisher and oil investor Harry Chandler, later purchased what became Tres Hermanos Ranch in modern Chino Hills and Diamond Bar. After Scott’s death in 1920, Columbia and Puente were acquired by Shell Oil of Caifornia, which still owns large tracts in the Puente Hills today.

Finally, there are editorials of note including one that warned of “Mexican Confiscation” with the paper stating that “American protest against proposed Mexican confiscation of oil properties lawfully acquired under statutes in effect at the time of the acquisition has stirred up a storm of abuse in the Mexican Congress and the press.” It was added that,

we will never believe that our government has come to a state of feebleness or inefficiency where it will permit the Mexican program to be carried out and American citizens to be robbed of the fruits of their industry in the development of Mexico, a work undertaken at the direct solicitation of the then Mexican government and encouraged by our own Administration at Washington.

The piece ended with the admonition that “the robbery should be stopped, cost what it may,” but the question was, naturally, more complicated than the editors allowed, given the frequent turnover of governments in México, masive corruption and graft, the competing interests in that country courted by powerful Americna capitalists, and other factors.

México, despite its political turmoil, was the second largest oil-producing country in the world behind the United States, but, of course, most of the profit did not remain in the country or whatever did was concentrated mainly in the hands of a few. In 1938, the nation’s oil assets were nationalized under PEMEX, which remains in business today, though heavily indebted, with the government recently announcing it would take on the form’s amortization payments, while it also provides a significant amount of the government’s revenues.

The other main editorial dealt with another common issue in California and elsewhere in the United States and this was the specter of unionization. The headline called for oil industry to be ready “to crush and exterminate” the International Workers of the World, or Wobblies, a far left-wing union. The piece went on that “it is impossible at this time for the oil industry to overdo its precautions agains tthe I.W.W. menace.”

It was asserted “that the heads of the outlaw organiztion in Chicago have selected Califora and is industries as special points of attack and have ordered all memers not detained elsehere to come here and start war.” Moreover, the editors claimed that there were “determined efforts to be made to get control of and sovietize the California fields” and oil companies were warned that the union and its members

are deadly menaces to the oil industry and [it is clear] that nothing should be left undone to exterminate them whenver one of them shows himself in the fields.

Any field worker, in particular, “should set his face firmly against the outlaws and their propaganda” and the paper added that it had shown “how the criminal organization seeks to mislead workmen . . . to think they are joining a legitimate labor union.” It concluded by calling on law enforcement in the southern counties of California to do their duty in keeping the I.W.W. away from the region’s oil fields.

The Homestead’s collection contains two dozen issues of California Oil World and we’ll be sure to feature more of them as part of the “Drilling for Black Gold” series, especially as the future of the oil industry continues to be fraught with controversy in this era of rapidly inceasing climate change.

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