by Paul R. Spitzzeri
The continuing procession of booms in oil prospecting that helped transform greater Los Angeles in the late 19th and early 20th centuries included the remarkable circumstance of the Temple family’s fortunate discovery in 1914 of the commodity on their 60-acre ranch at the northeast corner of the Montebello oil field, leading, three years later, to the successful completion of the first of a string of some 15 producing wells, drilled by Standard Oil Company of California, that brought them a substantial fortune through their one-eighth royalty.
Standard was a major player in the Golden State’s burgeoning oil industry and another was the Union Oil Company of California, founded in 1890 after a merger of earlier firms concentrated in Ventura County with headquarters initially at Santa Paula, though the company relocated to downtown Los Angeles at the dawn of the 20th century.
By the early 1920s, Union, long led by Lyman Stewart until he was replaced in 1914 by his son William L. amid concerns that the elder Stewart was too acquisitive in real estate, was the target of a hostile takeover by Royal Dutch/Shell, but this was fended off through the formation of Union Oil Associates by the senior Stewart, banker Henry M. Robinson and former Borden Condensed Milk head Isaac Milbank to purchase enough stock to keep control of the company.
This maneuver was completed in March 1922 and this post, the latest entry in the “Drilling for Black Gold” series of posts here, looks at the August edition, the 18th published by the company, of Union’s Bulletin. As the publication was going to press, Milbank, one of the nine members of the firm’s executive committee, which included the Stewarts, passed away from a stroke at the age of 58.
The Bulletin announced this by informing readers that “it is with extreme regret that we have to record the passing of Mr. Isaac Milbank, one of the most able members of the Executive Committee and Board of Directors.” It added that an “official record of appreciation from his associates in the company” was not available by press time, though it was added that “we could not express a better and truer tribute to his memory” than one from the Los Angeles Stock Exchange, which praised his “good works . . . unselfish devotion, considerate regard, loving kindness, true friendship, fidelity and honor” and added that “his own loved him; his friends trusted him; the world respected him,” while “the needs and afflicted turned to him and never fruitlessly; he was rich in probity and scattered goodness with a lavish hand.”
In its 15 August number, the Los Angeles Times that Milbank was born on 27 June 1864 at Greenfield Hill, now part of Fairfield, Connecticut. A graduate of Yale Business College, which had no affiliation with the renowned Ivy League university, he rose from an entry level position to the vice-president and general manager of the New York (Borden) Condensed Milk Company. As the 19th century came to a close, he retired for the sake of his health and headed west.
In 1905, Milbank became a Union stockholder and, a baker’s dozen of years later, joined as a director, with appointment to the executive committee in 1920. The obituary added that “a few months ago, he was instrumental in the formation of the Union Oil Associates, which saved the Union Oil Company as an American concern.” He was also a director of the Guaranty Trust and Savings Bank, Pacific Mutual Life Insurance Company and California Delta Farms, Inc.
A highlighted Union employee in the magazine was Paul M. Gregg, who, in 1921, joined the company as its general counsel. A native of Independence, the Inyo County seat (and where, when Gregg was a child, F.P.F. Temple and others sought to complete a railroad from Los Angeles to tap silver mines in nearby mountains), Gregg spent most of his early life at San Luis Obispo, where his father was a lawyer and Superior Court judge.
Gregg was in the first class of the Stanford University law school, earning his degree there in 1895 (David A. Workman, a great-grand nephew of Homestead founders William Workman and Nicolasa Urioste, was a graduate of the class of 1955). He joined his father’s firm until the elder Gregg’s death four years later and then continued his own practice for two decades.
In 1919, Gregg relocated to Los Angeles and became part of the new firm of Andrews, Toland, Gregg and Andrews, but stayed only a short time before joining Union. He also served as the personal assistant to Executive Vice-President Elmer W. Clark for the few months prior to the publication of the issue and it was highlighted that Gregg was a member of the Draft Exemption Board for much of southern California during the recent world war.
Alex Robertson, who owned a pipeline manufacturing company in Los Angeles, penned an article called “The Pipeliner,” which noted that,
In the sixty years that the oil industry has been in existence in the United States, there has been no more colorful product of petroleum development that than characteristic personage who grew up with quantity production of oil and has since followed closely in its wake—the “Pipeliner.”
This, Robertson observed, was because the figure who laid oil pipelines “cares little about the actual drilling operations in the field” and operated along “those free, independent ways” that led to wherever the work was done that required a presence only for that important component of field work.
It was noted that, originally, crude was carried in 42-gallon oak barrels on trucks and then barges, followed by 2,000-gallon wooden vats in railroad flat cars and then 12,000-gallon steel rail cars. The writer continued that “the magnitude of the oil industry soon demanded a method of transportation more convenient and less expensive” and a New York figure Robertson called “L. Hectchain,” though it was James L. Hutchinson who, in 1862, developed the first pipeline at Titusville, the birth of the American petroleum industry, in Pennsylvania.
This was built using siphon technology with air chambers at intervals to maintain a constant pressure to move the crude three miles to a refinery, though joint leakages plagued the concept. In 1865, Samuel Van Syckel [misspelled by Alexander as Tyctel] developed a system using screw sockets to keep the lines free of leaking and employed steam pumps to push the crude several miles for refining.
Trunk lines were in operation within a decade, with 60 miles laid to Pittsburgh and others were built to Cleveland, followed by ones to Baltimore, Buffalo, New York and Philadelphia from western Pennsylvania and from Ohio fields to Cleveland and Chicago. By 1907, 45,00 miles of pipe were laid, these as small as two inches in diameter and as large as a foot, with the longest running some 1,600 miles from Oklahoma to New York.
As for the “pipeliner,” Alexander observed that “the isolation of the gangs in their long jobs of crossing unsettled mountainous or wooded sections of country, has knit them closer together, in addition to awakening a peculiar preference for their own work and the associations they form both on and off the job.” Union did not have much to do with this class of worker until 1909 when a “Producers’ Line” was built from Bakersfield, in the southern San Joaquin Valley, to the coast at Port San Luis at Avila Beach, south of San Luis Obispo (a long-developing oil spill in the lines controlled by Unocal, Union’s then-name, and discovered in 1992, however, caused massive contamination and led to its closure—pipeline leaks have been a major problem throughout California’s oil history).
The author observed that,
The quick and efficient work done in laying this line, which was one of the biggest pipe line propositions ever tackled by any operators in this state, is still the cause of many a chuckle of satisfaction in official circles . . . the completion of the entire system [of 205 miles and massive pumping stations, storage tanks and other infrastructure] . . . in the surprisingly few months which elapsed between the time when it first started and when oil was stored in its tanks, furnishes an object lesson to all those who are wont to face a hard task with a faint heart.
Alexander continued that “the plan looks simple enough on clean white paper, but before the joints of eight-inch pipe had spanned the desert hundreds of sturdy pipeliners had sweltered for months in almost unbearable heat and created pipe laying records which still stand as the best to be cited for ‘tong’ gang work.”
Some very detailed discussion follows, but suffice it to say that some 1,000 men were employed at any one time for the project, which lasted from the end of July 1909 to early March of the following year. The importance of proper placement of joints, which weighed 600 pounds, once segments were rolled and linked by threaded collars and tightened with large tongs assisting in the process as “the hammer man” worked quickly, was carefully calibrated so that no unnecessary time was lost. This work was physically demanding, as Alexander wrote that “day after day the pipeliner, exerting every muscle of his body, keeps up this grind . . . with the sun beating down on his back and the perspiration pouring off his body.”
Seven Union employees were named as veterans of that project, but, befitting the nature of the vocation, most pipeliners headed to other states, such as Louisiana, Texas and Wyoming, to continue the grueling work. Alexander concluded that, in places like Bakersfield or Taft, to the southwest at the base of the Coast Range of mountains near the Carrizo Plain:
if you know the right cigar stand or pool hall, you can line up all the expert pipeliners you want at any time, and hear all the exciting yarns about the life of the layer of pipe to which you care to listen.
A jarring contrast to the rough-and-tumble world of the “pipeliners” is reference to the company tennis tournament to be held in early September with a President’s Cup for the winners of singles and doubles matches. Another history-based piece concerned a 1915 fire on the S.S. La Habra, named for a prime Union field in northwestern Orange County near the town (on what was formerly a Mexican-era rancho) of that name, while there was one on the establishment of the Santa Maria oil field and the town of Orcutt, south of Santa Maria and near Vandenberg Space Force Base.
An interesting piece in the Bulletin is “Dialect of the Oil Fields,” by Union stenographer Charlotte Rickenbacker (yes, guitarists, she was the wife of Adolph Rickenbacker!) which was a continuation from the July issue. Words starting from “F” and running through “Z” are included, including some choice examples like a “headache post,” which is one on a derrick just under a walking beam; a “helrazer,” or electric tool used for fishing lines; a “mouse trap,” of tool to fish out rope from a well; “off tour” or “on tour,” meaning the finishing or starting of a work shift; a “spider,” or an iron block holding a pipe over a hole and using wedges while drilling is underway; “sucker rods,” which link the walking beam to the pump at the bottom of the well (we have sucker rods from a water well displayed in a pump house next to the Water Tower at the Homestead), a “thief,” which is an apparatus for retrieving oil samples in tanks or reservoirs; and a “wildcat,” or a well in geologically unproven territory—something Walter Temple tried on occasion in his prospecting.
Statistics for oil production for July 1922 throughout the state showed that Midway-Sunset in the San Joaquin Valley topped the list of districts at 2,666,000 barrels with Long Beach at second place with not far under 1.9 million. The only other one over a million was Elk Hills, also in the San Joaquin. Of the 20 districts, Montebello came in at ninth with not quite 600,000 barrels, but production was declining in the relatively shallow field, which became a growing problem for Temple, who relied very heavily on revenue from his wells there for his own oil business, as well as his real estate and development projects, which were ramping up considerably by summer 1922.
In fact, the chart shows that Montebello yielded daily averages of about 18,700 barrels in 1918, the first full year of production, then nearly doubled to over 33,000 the following year. Declines, though, were marked in succeeding years, including about 30,000 in 1920, 25,000 in 1921, and 19,600 in June 1922, with a slight drop in July—that trend would only continue. There were no new rigs started in July (Temple #14 came in late in 1921, but, as noted in our post from yesterday, #15 was not brought into production until August 1924 and was one of the last there), though a well was completed and 23 drilling, while there were 151 active producing wells in the field.
Yet, for the state as a whole, there was consistent growth in well development, so that, in 1918, there were 8,210 producing wells and this climbed to 8,774 the next year, 9,200 in 1920 and 9,425 in 1921. Production leapt from about 280,000 barrels daily in 1918 to 314,000 three years later and then almost 375,000 in July 1922, while the total number was over 11.5 million barrels, an increase of some 866,000 from June.
A concern, however, would be over-production, leading to lower prices and, consequently, declining profits. Existing stock was more than 40 million barrels as of the end of June, so about 52 million existed when July closed and the surplus for year approached 12 million barrels. A chart at the end, included here, shows the state’s oil industry from 1915 including active producing wells, production, stocks, prices per gallon and standard crude prices.
Publications like the Union Oil Bulletin are very helpful in understanding the state of the industry in California during this boom period. Over a century later, conditions are incredibly different and the U.S.-Iran War has led to speculation about the global future of oil because of transport disruptions and financial consequences and whether the conflict will spur a move to diversified, specifically renewable, energy sources.
Lastly, speaking of the 1992 oil spill at Avila Beach and Port San Luis, a post coming soon here will look at the growing concern in the early 1920s about oil pollution along the coasts, including at beaches and harbors, so look for that.