Читать книгу Power Trip: From Oil Wells to Solar Cells – Our Ride to the Renewable Future - Amanda Little - Страница 13

“The frenzy has penetrated every mind and the blood has coursed like fire through the hearts of everyone who owned a bit of [Beaumont] land,” reported the Dallas Morning News on January 17, 1901. “The mind has been stunned with the possibilities of great wealth and men have been carried further from sound business principles than they care to admit.”

Plenty of men struck gold at Spindletop, but many more lost their shirts. Pattillo Higgins, for one, never saw a dime of profit off the well he had discovered and in which he had invested his fortune and sweat. Even Anthony Lucas abandoned his efforts at Spindletop within two years of tapping the gusher; the investors who had funded his efforts had offered him a mere 12 percent ownership of the oil produced, and quickly bought him out.

Like all oil boomtowns, Beaumont fell victim to land speculation, overproduction, and general disrepair. “Now every bubble of gas, every oil-coated pool in all the region is prized as a possible indication of vast oil deposits beneath,” reported the Galveston Daily News on February 3, 1901. “Consequently there is anxiety to tie up the land with leases. Prospectors are scanning the maps and running about the country in search of owners.” One farmer sold his land for $20,000 to a buyer who within minutes had turned it around to another investor for $50,000. At the height of the frenzy, the price of a single acre within Beaumont was as much as $900,000 ($22 million in today’s dollars). The disenchanted began calling the area “Swindletop.”

Boomtowns such as Beaumont had all the chaos of a carnival, teeming with prostitution, heavy drinking, theft, and public brawls. Drilling was governed by the Rule of Capture, a British law “by which oil was regarded in legal terms like a wild animal—who ever caught it first could keep it,” wrote historian Anthony Sampson. The producer or driller was entitled to as much oil as he could extract, and had no obligation to pay community taxes or government royalties.

Growth was haphazard, poorly planned. Trees were clear-cut from hillsides to provide wood for derricks and shack housing, the soil beneath them eroding in avalanches of mud during heavy rains. Relentless mule, wagon, and foot traffic turned dirt roads into impassable swamps. The mire had to be covered with wood planks so that roustabouts wouldn’t drown. Here’s one author’s description of a boomtown known as Oil City that captures the squalor surrounding the wildcatter’s existence:

Oil City, with its one long crooked and bottomless street. Oil City, with its dirty houses, greasy plank sidewalks, and fathomless mud. Oil City, where horsemen ford [sic] the street in four to five feet of liquid filth, and inhabitants wear knee-boots as part of indoor equipment. Where weary travelers consider themselves blessed if they can secure their claim to six feet of floor for the night…

Air reeks with oil. The mud is oil, the rocks hugged by the narrow street perspire oil. The water shines with rainbow hues of oil. Oil boats, loaded with oil, throng the oily stream, and oil men with oily hands fasten oily ropes around the oily snubbing posts. Oily derricks stand among the houses…and the citizens are busy boring in their back yards, in waste lots, or wherever a derrick can be erected.

Beyond the grime and disorder of these conditions, the problem with such a reckless approach to drilling was that it inefficiently depleted underground reserves. The Spindletop field produced 3.5 million barrels of oil in 1901; the following year production soared to 17.5 million barrels; in 1903 it dipped to 8.6 million barrels. By February 1904, production was down to just 10,000 barrels a day, and the supply dried up over the next four years. “The cow was milked too hard,” Spindletop founder Anthony Lucas commented during a 1904 Beaumont visit, “and moreover she was not milked intelligently.”

After his big discovery, Lucas had patented a long list of devices he’d developed at Spindletop, many of which are used to this day—including a wellhead to contain high-pressure reserves, and specific valve designs and blowout-prevention methods. He went on to serve as a successful consulting engineer throughout Europe, Russia, and Mexico. He focused his later career on devising controlled drilling methods, looking disapprovingly at production binges and the hasty, inefficient exploitation of oil resources.

Nowhere are boom-and-bust economic cycles more dramatic than in the oil industry, with its rapid swings between wild abundance and scarcity. The story of Spindletop bears this out in full color: first the massive field was discovered, then oil fever set in and brought with it overzealous drilling, then the tremendous supply this yielded far outpaced demand, in turn creating a glut in the market that caused oil prices to plummet. When Spindletop was first discovered in 1901, Lucas sold his crude for $1 a barrel, but by the time the field was producing at its peak volume, overproduction had sunk the price to 3¢ a barrel—cheaper than the drinking water that was carted out to the field’s workers. When the oil bed began to dry up a year later and demand caught up to supply, prices then predictably began to soar.

Spindletop had one significant distinction from the majority of active fields of its era that worked both in its economic favor and against it: its oil was a lightweight sulfurous variety of petroleum that was not well suited for using as a lubricant or burning in lamps—the two biggest markets for oil at that time. Spindletop’s crude was, however, compatible as a fuel for tanker ships, locomotives, and generators—machines that were mostly coal-fired at the time. It also worked to fuel the automobile—a new European invention that had debuted in the American market just a few years before the Spindletop find.

“It is the most fortunate thing that could have happened in connection with this well—that it is not illuminating oil,” J. H. Galey, a part owner of the Lucas well, told the Dallas Morning News soon after the discovery. “[T]here will be a good market for fuel oil when the country has had time to adjust itself to using liquid oil. The railroads will use it, every factory will make steam with it, and the steamships can carry much more power in oil than they can in coal.” What Spindletop produced, in other words, was a sudden volume of cheap fuel that had nowhere to go but toward transportation. “Spindletop transformed the fuel of light into the fuel of engines,” as wildcatter Michel Halbouty told me. Over the subsequent decades, the new cheap engine fuel would set dozens of other mechanized industries in motion, in turn helping to build a young democracy into an industrial and economic powerhouse.

In the meantime, there was much work to do in Beaumont. By 1902, hundreds of oil companies had been chartered to manage the economic risks associated with petroleum production and steer the whirlwind of activity. The building of refineries became just as important as the drilling of wells—crude was worthless until it could be processed. Wildcatters, investors, and refiners brokered casual partnerships—many over whiskeys at local saloons—that in some cases grew into corporations we still know today. Exxon (formerly Humble Oil), Texaco (formerly the Texas Company), and Gulf Oil all had their beginnings in Beaumont. Gulf Oil, for instance, was an outgrowth of Anthony Lucas’s legendary first gusher: William Mellon, one of the investors who had backed Lucas and then bought him out, also purchased many other successful wells in the area and established a refinery business, and the sum of these parts became Gulf.

The Texas Company, meanwhile, was founded by Joseph Cullinan, known as “Buckskin Joe” for his tough, unyielding persona. A former employee of Standard Oil’s pipeline division, Cullinan raced to the scene of Spindletop after the discovery and soon became one of Beaumont’s most successful oilmen. As he snatched up valuable leases in Beaumont, Cullinan also began building storage facilities 20 miles outside of town, giving him a big advantage over the majority of wildcatters who overlooked the need for infrastructure. He also built a pipeline from Texas to Oklahoma, establishing a major artery of southwestern petroleum distribution. By the end of 1901, he had begun consolidating his various oil producing and distributing operations into the Texas Company.

Mellon and Cullinan were among the many independent oil producers who grew out of Spindletop—brash, confident risk takers with keen instincts and the will to follow them. They quickly became formidable economic forces to reckon with—specifically, for Standard Oil to reckon with. By 1902, an estimated $235 million had been invested in the Texas oil boom alone. Standard Oil, the titan of the Northeast, was valued at less than half that: $100 million.