The Story of Oil in California - Signal Hill

Signal Hill rises up 110 meters (365 feet) behind Long Beach, 32 km (20 miles) south of Los Angeles. Its name is derived from a local Native American practice of signaling to each other from the imposing hill. Because of its size, signals could be sent by way of smoke or fire either to other hills in the area, or to boats out at sea. Oil men first started exploring the area in 1916 after the successes of other ventures in southern California. In 1921, Dr. W. Van Holst Pellekaan, Chief geologist for Shell, tried to stop the drilling at Signal Hill, unconvinced of its potential. He was too late, however, and the drilling proceeded.

The Shell Game

Shell's reluctance to drill Signal Hill was understandable. The company had spent three million dollars at Ventura in the  previous 5years, and had no oil to show for it. And only 4 years before, Union Oil had drilled an unsuccessful well (also known as a "duster") on Signal Hill. But it was ultimately the tenacity of Frank Hayes and Alvin Theodore Schwennesen, geologists with Shell, that moved the project forward.

Work began on the Alamitos # 1 well on March 23rd. By May 2, the hole reached 843 meters (2,765 feet) and gave a showing of oil. Soon thereafter, 21 meters (70 feet) of standing oil was found in the bottom of the hole. But still, no oil flowed, and the crew, lead by driller O.P. "Happy" Yowells, began to wonder what exactly was happening. Then on June 23rd at 9:30 PM, the Alamitos #1 erupted with so great a gas pressure that oil gushed 35 meters (114 feet) into the air. Unfortunately, the bottom of the hole soon caved in. Much cleaning of the hole was required, and on June 25, 1921, the well was producing more than 1,000 barrels of oil per day. The well would eventually produce 700,000 barrels of oil.

The rush is on....

The discovery created a stampede. While the well was being drilled, the area was in the process of being subdivided into residential lots. Many of the lots, though already sold to prospective homeowners, were not yet built upon, and potential homeowners quickly changed their minds and entered the business of looking for oil, hoping to get rich quick. The parcels of land were so small and the forest of tall wooden derricks so thick that the legs of many of them actually intertwined. Oil promoters were selling shares of wells that had not yet been drilled. Signal Hill was to prove so prolific that, almost unbelievably, many of those buyers actually made money on their investments. The next-of-kin of persons buried in the Sunnyside Cemetery on Willow Street would eventually receive royalty checks for oil drawn out from beneath family grave plots.

By April 1922, only 10 months after completion of the discovery well, Signal Hill was covered with 108 wells, producing 14,000 barrels daily. By the fall of 1923, 259,000 barrels of crude was being produced every day from nearly 300 wells.

Signal Hill was the biggest field the already productive Southern California region had ever seen. In 1923, Signal Hill produced 244,000 barrels, alongside Huntington Beach (discovered in 1920) at 113,000 and Santa Fe (1921) at 32,000. This made California the nation's number-one producing state, and in 1923, California was the source of one-quarter of the world's entire output of oil! Even so, fears of shortage were still very much in the air. "The supply of crude petroleum in this country is being rapidly depleted", the Federal Trade Commission warned in 1923. But in that same year, American crude oil production exceeded domestic demand for the first time in a decade.

Remote location turns into tanker technology

Because of California's remote location relative to the industrial centers of the east, California oil companies were at the forefront of tanker technologies. As a consequence, much of the state's market was overseas. In 1894, the Pacific Coast Oil Company and the Union Oil Company partnered to build the first true oil tanker on the Pacific Ocean. Named the George Loomis, its maiden voyage departed Ventura, California in January, 1896, and a new era was born. The development of California oil also presented challenges to the geologist that had been seen in no other oil field. As a result, the complexities of the geology of Southern California lead to a significantly increased knowledge of petroleum geology and exploration.

By the end of 1938, the Long Beach Field had produced 614.5 million barrels of crude, 750 million barrels by 1950, and over 900 million barrels by 1980. This made Signal Hill one of the most productive fields per acre the world has ever known.

Source: The Paleontological Research Institution 1259 Trumansburg Road • Ithaca, NY 14850

References

Franks, Kenny A. and Lambert, Paul F. (1985). "Early California Oil: A Photographic History, 1865-1940." Texas A&M University Press, College Station, Texas. 243 pp.

Yergin, Daniel (1991). "The Prize." Simon & Schuster, New York. 885 pp.

Rintoul, William (1976). "Spudding In." California Historical Society, San Francisco. 240 pp.

Lockwood, Charles (1980) "In the Los Angeles Oil Boom, Derricks Sprouted Like Trees." Smithsonian October, 1980. pp 187-206.

The Story of Oil in California

Many people may be surprised to learn that one of Southern California's chief exports over the last 100 years, besides motion pictures, has been oil. Like oil reservoirs in Texas, Louisiana, and Pennsylvania, a hint of what lay beneath the surface could be seen in the many above ground oil seeps. These seeps had been known by Native Americans for thousands of years. In 1543, Spanish explorer Juan Cabrillo noticed the native people using the naturally occurring tar, or "pitch", to waterproof their canoes. These seeps were also responsible for the tar pits of La Brea (Spanish for "pitch"), which had, over many thousands of years, trapped unsuspecting animals and their predators looking for an easy meal.

In 1865, only 6 years after "Colonel" Edwin Drake's monumental discovery in Pennsylvania, California's first productive well was drilled by the Union Matolle Company in California's Central Valley. This area, east of San Francisco, became the scene of much of the drilling activity through the rest of the 1800's. While none of these wells were considered major strikes, they did provide enough oil for the nearby market of San Francisco, by far the largest population center in California in the late 1800's.

It came from over there....

But the largest fields lay undiscovered, near the sleepy seaside village of Los Angeles. The first well to strike oil in Southern California was drilled in 1892 by Edward L. Doheny, an unsuccessful gold and silver prospector, and Charles A. Canfield, his old mining partner. According to legend, Edward L. Doheny was in the downtown area of Los Angeles when he saw a cart whose wheels were coated in tar. When he asked the man where the substance had come from, he pointed to the northeast. Doheny and Canfield examined the area and soon discovered the Los Angeles Field after drilling to a depth of 140 meters (460 feet) at the corner of Colton Street and Glendale Boulevard, near present day Dodger Stadium. It was drilled using the unlikeliest of instruments: a sharpened end of a eucalyptus tree. Within 2 years of the find, 80 wells were producing oil in the area bounded by Figueroa, First, Union and Temple Streets. By 1897, the number of wells increased to 500.

Rise to Fame

Doheny would eventually become a millionaire, and gain enough renown to challenge for the Democratic nomination for Vice-President of the United States in 1920. And although he was cleared of any wrong-doing, he would later become a central figure in the Teapot Dome Scandal of the 1920's which brought disgrace to the presidency of Warren G. Harding. Not surprisingly, oil was at the center of the scandal.\

The Oil Queen

A local music teacher, Emma Summers, was one of the most successful investors in the first years of the initial boom, and by 1900, Summers controlled half the production in the original Los Angeles Field. For obvious reasons, Summers became known as "California's Petroleum Queen."

The oil boom in the early days attracted some interesting characters, including prostitutes, gamblers and con-men. The population of the city of Los Angeles doubled between 1890 and 1900, then tripled again between 1900 and 1910. Later, wells in the 1930's and 40's were soundproofed with vinyl-coated glass cloth with one-inch sheet fiberglass filling to decrease the noise, as the drilling activity began to conflict with the exploding Los Angeles population. Camouflage was also used, a technique that was eventually moved to offshore fields as well.

In 1900, the state of California produced 4 million barrels. In 1910, this had jumped to 77 million barrels. In spite of this increased production, many of the fields were beginning to see slowdowns in their production rates in the late 1910's, and California's wondered if their oil boom was reaching an end. But before that would happen, 3 major fields were discovered in rapid succession - Huntington Beach (1920), Santa Fe Springs (1921), and the biggest of them all, the Signal Hill, or Long Beach, Field in 1921.

Source: The Paleontological Research Institution  1259 Trumansburg Road • Ithaca, NY 14850

More tid-bits about Signal Hill

Within a year, Signal Hill – before and after a residential area – will have 108 wells, producing 14,000 barrels of oil a day.

The Alamitos No. 1 well erupted “black gold” on June 23, 1921, announcing discovery of California’s prolific Long Beach oil field.

The natural gas pressure is so great the gusher climbed 114 feet into the air. The well produced almost 600 barrels a day when completed on June 25. It will eventually produce 700,000 barrels.

The giant oilfield Alamitos No. 1 still produces 1.5 million barrels of oil a year. Signal Hill incorporated three years after the Alamitos discovery well.

Signal Hill remains the only city in America completely surrounded by another city – Long Beach. More than one billion barrels of oil have been pumped from the Long Beach oilfield since the original 1921 strike.

“Signal Hill is the scene of feverish activity, of an endless caravan of automobiles coming and going, of hustle and bustle, of a glow of optimism,” reported California Oil World.

“Derricks are being erected as fast as timber reaches the ground,” the magazine adds. “New companies are coming in overnight. Every available piece of acreage on and about Signal Hill is being signed up.”There are so many derricks, people are calling it Porcupine Hill.

“Derricks are so close that on Willow Street, Sunnyside Cemetery graves generated royalty checks to next-of-kin when oil was drawn from beneath family plots,” notes one historian.

Dave Summers notes in his article, ““The Oil Beneath California,” that when oilfields around Los Angeles began to develop, “Californian production became a significant player on the national stage.” The OilPrice.com article continues:

By 1923 it was producing some 259,000 barrels per day  from some 300 wells, in comparison with Huntington Beach, which was then at 113,000 barrels per day and Santa Fe Springs at 32,000 barrels per day… And, in a foreboding of the future problems of over production, this was the first year in a decade that supply exceeded demand.

Shell Geologists seek Signal Hill Oil

Signal Hill oil potential had drawn wildcatters south of Los Angeles since 1917, but with no success. Two Royal Dutch Shell Oil Company geologists and a driller persevered.

“This was a great exploit and economic risk for the time. Shell Oil Company had just lost $3 million at a failed drilling site in Ventura, five years before,” explains a Long Beach newspaper.

A 1954 photograph of the Alamitos No. 1 well — and the monument dedicated on May 3, 1952, “as a tribute to the petroleum pioneers for their success here…”

Although another “dry hole” would be expensive, Shell geologists Frank Hayes and Alvin Theodore Schwennesen spudded their well in March 1921.

Driller Frank Hays believed oil lay deeper than earlier “dusters” had attempted to reach. By summer his steam-powered cable tool rig has him close.

On June 23, 1921, at a depth of 3,114 feet, Hay’s wildcat well for Shell Oil erupted “black gold” – revealing a petroleum reserve that extended to nearby Long Beach and into the history books.

According to the Paleontological Research Institution,  Signal Hill became the biggest oil field the already productive Southern California region had ever seen. This made California, “the nation’s number-one producing state, and in 1923, California was the source of one-quarter of the world’s entire output of oil!”

Decades before Signal Hill, another giant southern California oilfield had been discovered in 1892. A struggling prospector drilled into tar seeps he found near present-day Dodger Stadium.

PETROLEUM TRANSPORTATION

History of the 42-Gallon Oil Barrel

   Soon after America’s first oil discovery in 1859, oilmen met in northwestern Pennsylvania and decided a 42-gallon barrel was best for transporting oil.

By the 1860s, barges floated barrels of oil down the Allegheny River to Pittsburgh to be refined into a highly demanded product – kerosene for lamps. Image from an early stock certificate.  The 42-gallon standard was adopted by the Petroleum Producers Association in 1872.

   When filled with oil instead of fish or other commodities, a 42-gallon “tierce” weighed 300 pounds. The 42-gallon oil barrel was officially adopted in 1866. 

Today, a barrel’s refined products include about 20 gallons of gasoline, 12 gallons of diesel and 4 gallons of jet fuel and other products like liquefied petroleum gases and asphalt.

In August 1866 a handful of America’s earliest independent oil producers met in Titusville, Pennsylvania  , and agreed that henceforth, 42 gallons would constitute a barrel of oil. Pennsylvania led the world in oil production as demand for kerosene soared. Although pipelines would later challenge the oil region’s teamsters, the business of moving oil depended mostly on men, wagons, horses, flatboats, and barrels.

   To reach railroad station and docks, teams of horses pulled wagons carrying as many as eight barrels of oil. Rugged northwestern Pennsylvania terrain and muddy roads added to transportation problems.

Meanwhile, as derricks multiplied, forests along Oil Creek were reduced to barrel staves by recently introduced barrel-making machinery. Hoop mills operated day and night supporting cooperages that sprang up to join in the oil boom in what would later be called “the valley that changed the world.”

Why a 42-gallon Oil Barrel?

   Long before England’s King Richard III  defined the wine puncheon as a cask holding 84 gallons and a tierce as holding 42 gallons, watertight casks of many sizes were crafted by “tight” coopers. Their guild, the Worshipful Company of Coopers, prescribed the manner of construction. Lesser skilled craftsmen (known as slack coopers) made casks, barrels, and pails for dry goods.

   Technologies for making watertight casks replaced “tight” coopers and their guild of Worshipful Company of Coopers. Standard Oil will introduce a steel version of the 42-gallon oil barrel in 1902 with the same traditional bilged, cask-like appearance.

   By around 1700 in Pennsylvania, practical experience and custom had made the 42-gallon watertight tierce a standard container for shipping everything from eel, salmon, herring, molasses, soap, butter, wine and whale oil. The 42-gallon barrels became familiar 19th century containers.

   Then came Edwin L. Drake ’s 1859 oil discovery at Titusville PA., the first commercial U.S. oil well. The petroleum boom that followed it consumed wooden tierces, whiskey barrels, casks and barrels of all sizes.

When filled with crude oil instead of fish or other commodities, a 42-gallon tierce weighed more than 300 pounds – about as much as a man could reasonably wrestle. Twenty would fit on a typical barge or railroad flatcar. Bigger casks were unmanageable and smaller were less profitable.

   Contemporary photographs show cooperages’ prodigious response to the new demand. Within a year of Drake’s discovery, oil barrels were commonly considered to hold 42 gallons according to “The Oil Fountains of Pennsylvania” in Littells’ Living Age of September 1860.

   By 1866, these abundant tierce-sized barrels were the logical choice to become the industry’s standard measure. The 42-gallon standard oil barrel was officially adopted by the Petroleum Producers Association in 1872 and by the U.S. Geological Survey and the U.S. Bureau of Mines in 1882.

Standard Oil “Blue Barrel” Myth

   Not long after forming the Standard Oil Company in Cleveland, Ohio, in 1870, John D. Rockefeller  focused on efficiency and growth for his new company.

Instead of buying oil barrels, Standard Oil bought tracts of oak timber, hauled the dried timber to Cleveland on its own wagons, and built the barrels in its own cooperage. Standard’s cost per wooden barrel dropped from $3 to less than $1.50.

   A persistent oilfield myth says that the abbreviation “bbl” for a barrel of oil resulted from Standard Oil Company’s early practice of painting their barrels blue – bbl for “blue barrel.”

However, while Ida Tarbell’s controversial 1904 History of Standard Oil Company acknowledged the “holy blue barrel,” the abbreviation “bbl” had been in use before the 1859 birth of the petroleum industry.

In the early 19th century, wooden barrels of all capacities were common containers of trade: hogsheads, puncheons, tierces, butts, tuns, and other long since forgotten terms.

Shipping manifests reveal that quantities of honey, rum, whale oil, and other commodities were shipped by the “bbl” – well before John D. Rockefeller and Standard Oil’s blue barrels. For today’s industry, the abbreviation simply signifies a 42-gallon (159 liters) unit of measure…of any color.  Titusville was a slow-growing community until the 1850s, when petroleum was discovered in the region.  Oil was known to exist here, but there was no practical way to extract it. Its main use at that time had been as a medicine for both animals and humans.

THE HISTORY OF OIL

Pennsylvania’s “Valley that Changed the World”

   Titusville was a slow-growing community until the 1850s, when petroleum was discovered in the region.  Oil was known to exist here, but there was no practical way to extract it. Its main use at that time had been as a medicine for both animals and humans.[6]6] In the late 1850s Seneca Oil Company (formerly the Pennsylvania Rock Oil Company) sent Col. Edwin L. Drake, to start drilling on a piece of leased land just south of Titusville near what is now Oil Creek State Park.[4] Drake hired a salt well driller, William A. Smith, in the summer of 1859. They had many difficulties, but on August 27 at the site of an oil spring just south of Titusville, they finally drilled a well that could be commercially successful.

   Teamsters were needed immediately to transport the oil to markets. Transporting methods improved and in 1862 the Oil Creek & Titusville Railroad was built between Titusville and Corry where it was transferred to other, larger east-west lines. In 1865 pipelines were laid directly to the rail line and the demand for teamsters practically ended. The next year the railroad line was extended south to Petroleum Centre and Oil City. The Union City & Titusville Railroad was built in 1865. That line became part of the Philadelphia & Erie Railroad in 1871. That fall, President U. S. Grant visited Titusville to view this important region.

   Other oil-related businesses quickly exploded on the scene. Eight refineries were built between 1862 and 1868. Drilling tools were needed and several iron works were built. Titusville grew from 250 residents to 10,000 almost overnight and in 1866 it incorporated as a city. In 1871, the first oil exchange in the United States was established here. The exchange moved from the city, but returned in 1881 in a new, brick building before being dissolved in 1897.[7]

   Pennsylvania’s “valley that changed the world” also has connections to college football’s Heisman Trophy. Among the late 19th century Titusville companies, the Oberly & Heisman cooperage on Bridge Street supplied 42-gallon barrels for the oil trade – providing Michael Heisman’s son John an afterschool job.  John Heisman  played varsity football for Titusville High School as a guard on the varsity team from 1884 to 1887. He graduated in 1887 and went on to become the legendary football coach for whom the Heisman Trophy is named.