Drilling for Black Gold with the Union Oil Bulletin, September 1925

by Paul R. Spitzzeri

The first prospecting for oil in greater Los Angeles came in 1865 when the Los Angeles Pioneer Oil Company, which included the “Port Admiral” Phineas Banning of Wilmington and its primitive harbor, ex-governor John G. Downey, and Benjamin D. Wilson, among its principals, drilled its primitive well in Pico Canyon at the eastern edge of the Santa Susana Mountains north of the Angel City. A San Francisco firm, the Santa Ana Petroleum Company, proposed to prospect for crude near Anaheim, perhaps at Brea Canyon, but looks to have never gotten further than to advertise for well borers.

By the mid-1870s, a second wave of searching took place, again at what became known as the San Fernando field, where the Pioneer firm made its early efforts, and one of the principal figures as F.P.F. Temple, through his Lesina Oil Company, the Los Angeles Boring Company, and especially the Los Angeles Petroleum Refining Company, which worked a claim at Towsley Canyon, not far from Pico Canyon, and appears to have had some limited success extracting crude.

Just after Temple’s financial collapse when his Temple and Workman bank failed early in 1876, the Star Oil Company began producing oil at Pico Canyon, inaugurating the regional oil industry. Several years later, former sheriff William R. Rowland and William Lacy, brought in the first product from wells on Rowland’s portion of Rancho La Puente, granted thirty-five years earlier to his father, John, and this became Puente Oil Company.

In 1883, Wallace Hardison and Lyman Stewart left the Pennsylvania oil fields, where America’s industry began nearly a quarter century prior, and staked a claim in canyons in the Santa Susana range where they discovered oil and formed Hardison & Stewart, based in Santa Paula, which became an oil boom town. As the firm expanded into the Los Angeles region, this included the consolidation with two other companies into Union Oil Company, established in October 1890.

Hardison eventually moved into mining, while Stewart served as the enterprise’s president for two decades, from 1894 to 1914, though he remained chair of the board of directors, while his son William took over as president. Early in 1921, twenty years after headquarters were established in Los Angeles, the company created the Union Oil Bulletin, a monthly employees’ publication, of which the Museum’s collection has about three dozen issues through 1930. This post highlights the September 1925 edition, which is filled with great content.

For example, a two-page “Safety in the Union” insert discusses a first-aid demonstration contest held at the Los Angeles refinery on the 5th with five company teams working through issues dealing with industries found in the oil industry. The Los Angeles refinery team took first and second place in competition with the Oleum refinery at Rodeo in Contra Costa County in the Bay Area and the Producers Pipe Line squad and received a Safety Board Trophy, with it next heading to Fresno in early October to defend its state title.

Another article marked the second anniversary of the company’s Provident Fund, the formation of which has been covered in a previous blog post. By the end of the 1924-1925 fiscal year, it was observed that “the Fund [proved] to be in an exceptionally healthy condition” with some $1.6 million in resources for the program which was described as “one of the more desirable channels of providing for financial help as they progress through life, and ultimately for old age.”

Membership grew from just under 3,000 employees to just north of 3,800 in the space of the last six months of the period for those who were to receive a pension. Of that grand total in the Fund, 46% was invested in the capital stock of the Union Oil Company of California and Union Oil Associates, the latter established to purchase Union stock and head off a hostile takeover from Shell Oil. Another 49% came from “preferred stocks, bonds and mortgages,” and the remaining 5% were the current assets of the Fund. A balance sheet provided the financial details of assets, liabilities, the reserve account and the income account.

Lawrence Wolff of the fuel oil and asphalt sales division, provided a review of the “Diesel Engine and Its Fuel,” noting that, while it was invented by Dr. Rudolf Diesel in 1897, “the interest that has been aroused over the Diesel motor in the last decade is remarkable for its spontaneity and its wide-spread character” based on “its economy and greater efficiency.” This was especially true with ships, with the use of electric, rather than direct, drive, so that there was “more efficient propeller speeds, easier control, greater reliability and reserve power and a better distribution of weight.”

In the United States, Wolff added, “it is only in the last three of four years that intensive development of the Diesel engine in large units has been commenced” and he lionized the fact that “the typical American spirit of progress has asserted itself” and with design prowess, greater engineering resources, an abundance of materials and a ready market, the United States “bids fair to lead the world in the development and perfection of this latest aid to commerce and industry.”

He went further into more technical aspects of the technology before observing the question of fuel supply and Union’s “Diesol” oil looked to meet the question of whether there would be enough of the diesel fuel to meet the demand as the use of the engine grew. Wolff maintained that there was no reason to fear a shortage and added that “enormous fuel resources, yet untouched, are the shale deposits which are extensive, and rich in oil that could provide a suitable Diesel fuel.” While he had every expectation that the oil industry could supply whatever was needed, there was, of course, no understanding of the environmental impacts a massive growth in oil production and consumption would have and the State of California has just sued several companies and the American Petroleum Institute, claiming they deceived the public about climate change effects since the 1960s.

In the fourth part of its “Romance of Gasoline” piece, the magazine delved into the history of American oil discoveries, noting that, in the previous century, “there has been a far greater advance in mechanics and chemistry that during al the centuries since the Christian Era [began” and added that “a great amount of credit for this is due to petroleum.” It observed that the indigenous people used the material for medicinal purposes, citing sources as early as 1629; that a 1748 map in a Russian report mentioned Pennsylvania oil springs; and that, in 1833, Benjamin Silliman, a major industry figure, reported on the Lake Seneca spring in upstate New York. The piece concluded with reference to petroleum found in West Virginia salt works, presumably leading to a fifth part in the October issue to continue the story.

“Looking Into The Future” noted the preparation of a report by directors of the American Petroleum Institute sent to the Federal Oil Conservation Board and it added that

The report states it is reasonable to assume that the oil resources of the United States, including oil from wells, shale, coal and lignites [brown coal], assure the country of a sufficient supply of motor fuel and lubricants for the national defense and for essential uses beyond the time when science will limit the demand by developing more efficient use of, or substitutes for, oil, or will displace its use as a source of power by harnessing other forces.

This is certainly a notable statement, given that we are now just shy of a century later and still very dependent on fossil fuels in the face of a rapidly growing climate change and the effects it entails. It was further noted that there was no question of the using up petroleum reserves, with its stated that there were some 5.3 billion barrels of recoverable oil and “that after pumping and flowing cease there will remain in the area now producing and proven” 26 billion barrels.

Moreover, 1.1 billion acres of land, not explored fully, awaited examination, while deeper drilling was anticipated through better methods and technological advancements. Finally, it was felt that there were deposits of shale, coal and lignites such that there was “under conservative estimates, an almost unlimited supply.” It was cautioned that petroleum prospecting was “not an exact art” because “oil is hidden,” but, while, “predictions of future supply of crude oil are necessarily conjectural,” it as felt that “with the advance of science and invention,” there were likely to be “unforeseen and radical changes” in the industry.

Adding that there was “the importance of imports [which] cannot be ignored,” the report’s authors noted that there had to continue to be “adequate incentives to the exploration” of petroleum resources. This involved security in the ownership and leasing of oil lands; the enabling of “initiative, liberty of action, the play of competition and the free operation of the law of Supply and Demand” in the industry; and prices providing a reasonable profit “commensurate to the risks involved and the capital invested” in an intensively speculative enterprise.

Also of significance was the statement that

The supply of petroleum will be made to go much further through more efficient utilization. Automotive experts state that the mileage of the motor car per gallon of gasoline may be doubled through structural mechanical changes, when price justifies such changes. Improved mechanics will also result in smaller consumption of lubricants.

With respect to current production, statistics for the state in July showed just over 20.4 million barrels with 15% each from the Long Beach, Inglewood and Midway-Sunset (Kern County) fields and about 8% from Santa Fe Springs. Production above a million barrels was also achieved at Huntington Beach and Torrance, while Montebello, where Walter P. Temple’s lease with Standard Oil Company (California) provided most of his revenue, but where yields dropped significantly in recent years, was at about 580,000 barrels, making its 13th of 25 fields listed.

Production was up more than 15,000 barrels from June and 36,000 from the prior July, while stocks of all petroleum products totaled nearly 140 million barrels, up about 2.9 million from June and nearly 15 million from the end of 1924. As for development, the busiest area in terms of output was the latest boom field at Inglewood, where 118 wells yielded nearly 62,000 barrels a day, almost 70% of the state total. The second highest daily output was at Ventura-Newhall, at about 7,800 barrels, followed by Midway-Sunset, at 6,800. For the preceding five years, production shot up from a daily cumulative total of just above 14,000 barrels in 1920 to almost 115,000 three years later—this leading to grave concern about over-production. In 1924, it receded to almost 42,500, but the climb to June 1925 was over 73,000 and then nearly 89,000 in July.

In its “Expands to Serve” article, the Bulletin averred that “to sketch the growth of the Los Angeles district” of Union, it being the biggest division in the company, “is to testify to the penetration of the industrial structure by petroleum” while such growth as it has experienced, up to some “point of saturation,” was a palpable record of how “petroleum forms the keystone of industrial progress.” Correspondingly, it was added, the district’s “boundaries have been pushed outwards until the establishment of widely distributed marketing stations have brought much of Southern California under” its province.

The Pasadena station.

There were the usual humble beginnings dating to 1889, just before Union was created and just after the Boom of the Eighties ended, when Hardison and Stewart set up the Los Angeles district at “East San Pedro,” which was renamed, within a few years, Terminal Island because of that landform’s obvious importance for rail connections and shipping out of the Port of Los Angeles, then poised for federal assistance that would mean burgeoning growth in subsequent decades. At that time, Hardison and Stewart generated 64,000 barrels of oil a year, “a mere drop in the bucket [barrel?] in the light of present day production.”

It was noted that oil was not then used for fuel, with railroad engine conversion coming later and the automobile somewhat far out on the horizon line, while supply easily outpaced demand at Santa Paula, thus leading to the East San Pedro station’s establishment, the first such outside of Ventura County. Earlier in the Twenties, the Terminal island facility was replaced with a new one at Wilmington. As for Union’s move to production in the Los Angeles area, this began in 1892 with tank cars distributing product, though, four years later, pipelines were laid in Los Angeles and Orange counties to carry crude to the Angel City, from whence delivery was made to customers by tank wagons.

Union’s first service station, located at Sixth and Mateo streets in downtown Los Angeles.

In 1897, a pipeline tied wells to the East San Pedro station so that “water transportation to markets [was] assured,” but, in 1901, “a regular marketing station was opened in Los Angeles” and “this marked the real beginning of the formation of the present Los Angeles district, in conjunction with the move of company headquarters to the Angel City.” The district covered Los Angeles, Orange, Riverside, San Bernardino and Santa Barbara counties and there were initially 44 substations, along with independent stations at Burbank (1904), Pasadena (1907), Riverside (1904), Santa Ana (1914) and Santa Barbara (1914), but these were subsumed within the Los Angeles district in 1915.

Even before this formal reorganization, Los Angeles was “a clearing house for all other districts, in the matter of material replenishments,” including the use of horses before auto trucks and there were more than 125 animals kept at the Los Angeles station. Prior to 1911, when Union built a refinery at Brea, refined products came back to the area from the Oleum refinery in the Bay Ara or sometimes from Santa Paula. Another landmark was Union’s first service station, opened at Sixth and Mateo streets, just west of the Los Angeles river in the industrial section of that city and, by the time of writing, there were over 100 in the district.

The Los Angeles station in 1901.

Returning to East San Pedro, it was noted that it largely provided fuel oil from Santa Paula, but, :with the opening up of the Fullerton and Brea district wells,” it changed to being a loading destination for tankers taking the crude from those fields to the Oleum refinery. Some sales were found, however, through selling fuel oil to steamers at the harbor and a barge was delivered in May 1905 to facilitate this trade. This was followed by the selling of refined oil from Oleum at East San Pedro until a San Pedro facility was established for the purpose, followed by another at Long Beach replacing shipment over 20 miles of poorly maintained roads to that burgeoning city. Stations were established at Compton and Santa Monica by 1913, while refined oils began to be stored at the Los Angeles station in 1906.

There was further discussion of the rudimentary operations at Los Angeles and the creation for an agency at Pasadena at a plant that was on just 7,500 square feet of space before additions were made in 1913. At Covina, a substation was opened in 1912 on a site limited to storage of drums and barrels and, while it began with three corrugated iron tanks, a modern facility was soon established. A Pomona substation was established in 1914, followed the next year by ones in Monrovia and Ontario, with an El Monte facility founded in 1922. These were all part of the Pasadena territory, which also sported 14 filling stations and also discussed was the large, but sparsely populated, Riverside section.

A Burbank agency was established in 1910, but this grew dramatically after the completion of the Los Angeles Aqueduct three years later and population growth in the San Fernando Valley and west of Los Angeles. Substations were established, in order, at San Fernando, Van Nuys, Lancaster, Palmdale, Hollywood, Owensmouth (Canoga Park), Newhall, Laws (near Bishop in northern Inyo County) and Lone Pine, in the southern part of the same county. Orange County had a Santa Ana station opened in 1914 and mention was made in the growth of branches at Santa Barbara and Ventura. The piece concluded with

The Los Angeles district, small in the beginning, has grown into the largest marketing division of the company, [and] in effect epitomises [sic] the development of the oil industry in Southern Californnia, the penetration of that industry into the social and industrial structure, and summarises [sic] the effort of the company to meet these changed conditions.

Lastly, the “Refined and Crude” page offers humor and aphorisms, with a couple of examples of the former involving a teacher asking a student named Willie, “please tell me what it is, when I say: I love, you love, he loves—” and he replies “that’s one of them triangles where somebody gets shot” and another about a merchant named Abe [the insinuation is clear about him being Jewish] who waited three hours after taking out insurance before setting his shop ablaze because “the fire sale ads weren’t ready.” These are obviously forms of humor that reflect attitudes of the era very different from our own.

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