Drilling for Black Gold with the Union Oil Bulletin, October 1922

by Paul R. Spitzzeri

As noted here before, the Union Oil Company was formed in Santa Paula in Ventura County in 1890 through the merger of a few firms including one established by Wallace Hardison and Lyman Stewart, the latter becoming the president and guiding force of Union as it became one of the major oil companies in California.

At the dawn of the 20th century, Union moved its headquarters to Los Angeles, where, not quite a decade before, Edward Doheny and Charles Canfield opened a major oil field just west of downtown. Moreover, by the end of the 19th century, Doheny brought in Orange County’s first oil well at Olinda in what is now the city of Brea and, soon, Union had a major presence there.

By the Roaring Twenties, like one of its major competitors, Standard Oil Company (California,) which leased some 60 acres near Montebello from Walter P. Temple and drilled a number of successful wells which propelled him and his family to significant wealth, Union launched a monthly magazine for stockholders called the Union Oil Bulletin.

A few previous posts on this blog have highlighted issues of the publication from the Museum’s collection as part of the “Drilling for Black Gold” series illustrating aspects of the oil industry in greater Los Angeles (a presence which has gradually dwindled). The featured issue for this post is the October 1922 number, which has a good deal of interesting content about the company and the industry broadly.

A regular feature was the highlighting of a member of the board of directors of the firm and Alexander P. Johnson (1843-1937) was the focus for this month’s issue. A native of the area around Peoria, Illinois, southwest of Chicago, and a merchant with his brother and then on his own, Johnson came to California just after his brother, Orson, migrated west to recover his health (the “health-seekers” came in legions to greater Los Angeles during this period). The siblings established orange groves in Riverside, a relatively new town that would become a center of the citrus industry in the region.

For about a quarter century, Johnson resided in Riverside, built a citrus packing house in the Arlington area west of town, was involved in a number of business enterprises such as fruit exchanges, water companies, and the Glenwood Inn (which morphed into the famous Mission Inn), and was a leading political figure. He served as a San Bernardino County supervisor and state senator, representing an area that became a core portion of Riverside County when it was established in 1893.

Taking on the management of a company owned by his brother (who built the well-known Westminster Hotel and died in 1916), as well as his own namesake firm, Johnson left a substantial house on Magnolia Avenue in Riverside and moved to Los Angeles in 1906. Among his many endeavors, he joined Union as a director in 1914. At the time of the writing of this brief biographical sketch, Johnson was 79 and considered “hale and hearty” and “with an alert mind which would do credit to a man many years his junior,” but he lived into his mid-90s.

An article, “Early Developments of Oil as a Locomotive Fuel,” is particularly noteworthy, reflecting the expansion of the use of petroleum for the massive rail industry and providing a great deal of incentive of production in greater Los Angeles. In fact, Doheny’s partner at Olinda was the Atchison, Topeka and Santa Fe Railroad, as one example of the “synergy” between railroads and oil producers.

So, it was hardly a surprise that this piece began with the observation that “few people realize the the fuel-oil burning locomotive, [is the] largest individual customer of the petroleum industry today.” It was observed that the early days of oil production, stemming from discoveries made in western Pennsylvania in 1859, yielded product for lighting, lubrication, and medicine.

A chemist for the Pennsylvania Railroad experimented with using oil as a locomotive fuel in the late 1880s and some work along these lines was conducted in Peru at that time. In California, however, the particular character and quality of the crude found was such that, with “this oil so black and sluggish” and heavy, use of it for powering locomotives was avidly pursued. Hardison and Stewart were among those working to create an alternative for coal through their product as the end of the 19th century neared.

Some uses included the replacement with oil instead of steam for stationary engines and boilers, but the linchpin of future success for what became Union Oil was locomotive fuels, though it was recorded that “officials and engineers of the railroad companies ridiculed the proposition as utterly impracticable because, whatever use could be made of oil for certain engines, this could not be done for locomotives as lacking enough fire as well as waste of oil flames through fire boxes and smokestacks.

There was, however, one ally, the Santa Fe, which, in 1887, loaned an old engine to Stewart and Hardison for experiments at their Santa Paula shop and these included simple tests with burners using crude from a simple 12-barrel iron tank and one was developed with a narrow slot for the passing of the oil. The location of the burner was moved from the back to the front of the firebox, with provided enough combustion so that “on the tenth day of experimenting the engine was steaming up and down the five miles of track at Santa Paula in a satisfactory manner.”

A long-time official recalled that the oil was low-gravity from the nearby fields of Adams Canyon and Tar Creek and sold for $2.50 a barrel as opposed to $22 a ton for coal and he was joined by several others present 35 years before. When the Santa Fe requested the engine for a test run at the Tejon Grade, its officers were surprised at how well the oil-based system worked and it was noted that “the fireman [was] sitting down and taking it easy instead of sweating like a fool keeping the firebox choked with coal.”

There were other late 1880s efforts with oil-burning locomotive engines, including by the Wilgus Manufacturing Company of Los Angeles with provided one for a local line, which ran from Jefferson Boulevard and Grand Avenue at the south edge of town to Redondo Beach. Moreover, oil was being used for boilers operating the first electric streetcar line, the Los Angeles Electric Railway.

As the technology improved, there was also the fact that “newly discovered fields around Los Angeles gave greater supplies of oil and only the increasing locomotive fuel business prevented it from being an absolute drug [drag?] on the market.” It was not long before locomotives using oil-based engines and weighing 400 tons or more were in operation pulling cars a mile long up steep elevations in the Sierra Nevada Mountains, which coal engines simply could not do.

The growth of Union’s Los Angeles Yard in the preceding decade was demonstrated by a photo showing a simple and small clapboard structure with a false front and two-gabled tin roof. It was observed that Wright M. Cooney, superintendent of the yard, oversaw a sales department of five to eight clerks working in the tiny building. Up to 100 horses were used for deliveries instead of a fleet of trucks in 1922, though the first oil delivery truck was purchased in 1913.

Given the incredible amount of energy that could be developed at oil drilling sites with incredible gushers of gas and oil bursting through a wooden derrick, it was small wonder that the danger inherent in these incidents was very serious. Derricks were supplied with wooden ladders up the sides of the structures, but these could be rendered unusable in an incident involving fire, rocks and debris or other hazards, not to mention possible destruction.

Guy wires were developed to assist workers in extricating themselves from the worst danger, though these often led to cuts and burns that, while certainly better than the threat of more serious injury or death, could be major themselves. The Union Tool Company came up with an Ideal Emergency Guy Wire Slide, which operated like pliers involving a brake shoe operated by a hand grip for a user to control speed in descending to the ground and it was reported that “it is the opinion of authorities that the device will admirably meet the need for which it was designed.”

In the “News of the Month” section, it was noted that the Union Oil Associates, formed to head off a hostile takeover by Shell Oil, directorship voted early in October to issue a $2 quarterly dividend per share as well as an extra one of $1, but also to dramatically decrease the par value of stock from $100 to $25. This provided for the issuance of 1.2 million rather than 300,000 shares and the report noted that “the shares of $25 par value will be readily marketable at more nearly their intrinsic value than shares of the present par value, and that persons of limited means will be enabled to more freely invest therein.” In turn, this would enhance “the ever-increasing prosperity of Union Oil Company of California, a substantial majority of whose stock is owned by Union Oil Associates.”

Another interesting note in this section regarding the fact that automobile registration in America as of the 1st of July totaled nearly 11 million up from under 9.5 million a year prior. The United States, with one person in ten owning a vehicle, accounted for roughly 80% of all registrations in the world; put another way, the country “alone has over five times as many automobiles as all the rest of the world combined.” This fact, in turn, meant that America “should maintain its dominant position in the oil industry,” while it was added that 2.25 million cars and trucks were to be churned out by American manufacturers in 1922. Moreover,

Any agitation or political activity which interferes with or retards normal development in the oil industry directly affects our leading position in the world oil production and incidentally the operation of every “family auto” in our own country.

What as not understood as yet, however, was the immense environmental impacts that the burgeoning use of motor vehicles, along with other machinery using oil and fossil fuels, and the dramatic increase in fuel production and consumption would have. The recent lawsuit filed by the State of California against major oil producing companies in this regard is notable to contemplate in this context.

With regard to production, statistics for September 1922 showed that 12.2 million barrels were developed statewide, compared to 11.8 in August. Long Beach led all fields with more than 2.6 million, followed closely by Midway-Sunset in Kern County at more than 2.3, with Santa Fe Springs third on the list at about 1.28. Montebello, where the Temple lease was situated, but was seeing decreased production due to shallow deposits, ranked eighth behind the above-named as well as Huntington-Newport (978,000), Elk Hills (792,000), Richfield (632,000) and Kern River (607,000).

Stocks of oil topped 54 million barrels, with heavy crude above 20 degrees gravity comprising more than 70%, compared to refinable crude. It was noted that consumption was indicated at some 10.2 million barrels, so there was some surplus on production of about 2 million or 20%. As for development, Long Beach had nearly 50 new rigs up, with 27 at Santa Fe Springs, 15 at Huntington-Newport and 13 in Ventura-Newhall—there were no new ones at Montebello, although one was finished that month. Completed rigs numbered 26 at Long beach, 18 each at Midway-Sunset and Santa Fe Springs, and 11 at Huntington-Newport.

As for active drilling sites, Santa Fe Springs and Long Beach each topped the list at 111, with 102 at Huntington-Newport. There were 59 at various locations and 57 at Midway-Sunset, while Montebello had 21. Daily production, topping 76,000 barrels throughout California which was a 46% increase from August, included 43% from Long Beach and 32% from Santa Fe Springs—Montebello’s was a paltry 170 barrels a day.

There were just under 9,000 active producing wells in the state, which just about half at Kern River and Midway-Sunset, but, with just 103 wells, Long Beach was hitting huge pockets of crude, as was Santa Fe Springs with only 45. Montebello’s yield was with 152 wells, indicative of that shallowness issue mentioned above. From 1918 to 1921, active wells jumped from 8,210 to 9,425 with daily output rising from 10,577 to 15,631.

There are other articles of interest, including on Chinese river transportation and how earthquakes were measured through seismographs, with brief mention of a fault along the Signal Hill, Huntington Beach and Newport Beach oil sections and which “has created conditions which have tapped the petroleum now being released by drilling wells.” There was also a note of the earthquake at Inglewood on 21 June 1920 and which included the “wrecking of a few flimsy structures” that included “a single brick false front untied or fastened in any way to the rest of the building.” It was also observed that quakes could lead to oil being forced upward “or liberating pockets of gas,” as well as damaging tubing and casing and forcing redrilling.

A “Refined and Crude” humor section and poems are also to be found, along with lists of directors and executive officers and operating officials of Union. There are plenty more issues of the Union Oil Bulletin in the Museum’s holdings, so we’ll feature more of them in future posts of the “Drilling for Black Gold” series.

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