An Early History of American Oil

In 1818, a salt well suddenly began to fill with oil, making it the first well to produce crude oil in America. People had known about such oil seeps in western Pennsylvania for centuries. Native Americans, as far back as 1410, had been harvesting oil for medicinal purposes by digging small pits around active seeps and lining them with wood. For years European settlers had been skimming the oil from the seeps and using the petroleum as a source of lamp fuel and machinery lubrication.

The Seneca Indians and Revolutionary soldiers serving under General Benjamin Lincoln had found similar pools and determined it to have use as a medicinal compound. But no commercial use for the black goo could be determined, and salt wells like the one of 1818 in eastern Kentucky were deemed useless and promptly abandoned.

Things had changed by the 1840s. Numerous uses for oil had been discovered, and businessmen couldn’t find enough oil-producing salt wells to meet the increasing demand. The salt wells became invaluable because the only known way to harvest oil was from creeks, springs, and ditches, and the process was slow and expensive.

Even though practically everyone knew that oil was often found in salt wells, all had overlooked the idea of drilling in these locations specifically for oil. When James M. Townsend, president of Pennsylvania Rock Oil Company, suggested to a friend in the late 1850s that oil could be produced from wells just like water, the friend replied, “Nonsense! You’re crazy.”

By 1857 an agent for the Rock Oil Company became certain oil could be drilled through wells and formed his own company for the express purpose of drilling for oil. After two months of drilling, the man employed to drill the well arrived to find his well filled with oil. The agent arrived and asked what that was in the well. The driller replied, “That is your fortune!”

For Edwin L. Dake such was not to be the case. The agent turned entrepreneur made the mistake of going to Wall Street and becoming one of the first oil speculators. Before long he was bankrupt and eventually retired on a $1500 per year pension granted to him by the state of Pennsylvania for his pioneering work in oil production.

While the American oil business began in Pennsylvania, it boomed to life as a full-blown industry on January 10th, 1901, on a hill in southeastern Texas. This hill was produced by a giant underground salt dome as it pushed slowly towards the surface. This dome had come to be known as “Spindletop.” Native Americans in the area had been aware of oil seeps for centuries, and used this tar they found at the surface to treat a diversity of ailments. Some even drank the stuff, believing it could cure digestive problems. In 1543, Spanish explorers discovered that black, sticky tar found washed up on the beaches along the Texas coast could be used to waterproof their boots.

On that day in January mud started bubbling back up the drill hole at Spindletop. Seconds later, the drill pipe blasted out of the ground with great force, and then all grew quiet.  A few minutes later a noise like a cannon shot came from the hole, and mud shoot out of the ground like a rocket. Within seconds, first natural gas and then oil followed. The oil “gusher” doubled the size of the drilling derrick, rising to a height of more than 150 feet. This was more oil than had ever been seen anywhere in the entire world. The well flowed at an initial rate of nearly 100,000 barrels per day, more than all of the other producing wells in the United States combined.

Finally, people realized the true potential of oil. Before Spindletop, oil was used mainly for lamps and lubrication. Afterwards petroleum would be used as a major fuel for such new inventions as the airplane and automobile. Ships and trains that had previously run on coal began to switch to oil, becoming convinced that there would be no shortage of the fuel anytime soon. As an example, the Santa Fe Railroad went from only one oil-driven locomotive in 1901 to two hundred and twenty-seven in 1905.  It is difficult to overstate the importance of Spindletop. From this point on, nothing in the oil industry would ever be the same again, for this “gusher” ushered in the modern age of petroleum.