The Encyclopedia of Oklahoma History and Culture

PETROLEUM INDUSTRY.

Oil ushered Oklahoma into the twentieth century and gave it an economic base that for decades allowed continued development. The state's petroleum deposits lie within a vast reserve called the Mid-Continent Region, an area that also encompasses Kansas, Texas, Arkansas, Louisiana, and New Mexico. For twenty-two years between 1900 and 1935 Oklahoma ranked first among the Mid-Continent states in oil production and for nine additional years ranked second. During that period the state produced 906,012,375 barrels of oil worth approximately $5.28 billion.

Long before the onset of Oklahoma's great oil booms, the state's early inhabitants tapped into the region's many natural oil and gas seeps. Across the state American Indians employed the black liquid that oozed from beneath the rocks and accumulated on the surface of creeks and springs as medicine for both themselves and their animals. When the eastern tribes and non-Indians arrived, word of these seeps spread. As early as 1830 Chickasaw Agent A. M. Upshaw made note of local medicine springs. His successor, A. J. Smith, reported on seeps in the Wichita Mountains. Comanche Chief Asa Toyette showed the seeps to Thomas C. Battey in the 1870s and remarked "heap of medicine-good black medicine." By the 1850s visitors from neighboring states were utilizing the seeps. At Boyd Springs on Oil Creek in the Chickasaw Nation, travelers camping at the springs often drove a musket barrel into the water and then ignited the escaping natural gas for illumination. Maytubby Springs near Caddo and New Spring Place near Oaks became popular health spas.

In 1859 Lewis Ross struck oil while deepening his salt water well near Neosho Crossing on Grand River in the Cherokee Nation. Jacob Bartles, who gave his name to the oil center of Bartlesville, noticed oil seeping out of the ground southeast of Vinita when he marched through the region with the Sixth Kansas Cavalry during the Civil War. In 1875 George B. Keeler and Jasper Exendine were herding cattle along Sand Creek in Osage County. When Keeler's horse refused to drink the water in a convenient pond, the two men discovered that the water was covered with a scum of oil.

At that time "creekology" was the accepted method of prospecting for oil. Creekology simply was the search for aboveground indications of oil, and the most obvious indications were natural seeps. In 1878 the U.S. Geological Survey issued a publication detailing surface signs—streams that were coated with oil, natural gas seeps that rendered areas devoid of growth, tarry water that livestock refused to drink, and so forth. Oilmen quickly associated these signs with Oklahoma.

Robert M. Darden, a pioneer oilman from Missouri, organized Oklahoma's first petroleum enterprise, the Chickasaw Oil Company, in 1872 and drilled on promising land near Winchester Colbert's home; however, the refusal of federal officials to recognize non-Indian leases doomed the attempt. In late 1884 Dr. H. W. Faucett formed the Choctaw Oil and Refining Company and the Cherokee Oil Company and secured drilling rights to thirteen million acres. Faucett drilled two wells, one at Clear Boggy Creek west of Atoka in the Choctaw Nation and the other at Alum Bluff on the Illinois River in the Cherokee Nation. Both wells were abandoned after Faucett fell ill, returned to Missouri, and died there in 1888.

In 1882 Edward Byrd, an intermarried Cherokee, was searching for missing cattle along Oil Branch Creek when he noticed an oil scum on the surface. Four years later Byrd secured the right to drill on a half-section lease but could not convince any financiers to invest in a well on such a small acreage. Undaunted, Byrd persuaded Cherokee officials to lease him ninety-four thousand acres. In 1887 he formed the United States Oil & Gas Company (USOG) and completed the first of eleven wells along Oil Branch Creek in August 1889. Unable to find a market for their output, in 1895 he sold out to John Phillips, who reorganized USOG as the Cherokee Oil and Gas Company. Like its forerunner, the Cherokee Oil and Gas Company could not profitably market its crude and abandoned its wells. Other oil wells were drilled near Muskogee in 1894, but they too were unprofitable.

In 1894 Michael Cudahy obtained a two-hundred-thousand-acre lease in the Creek Nation and drilled several wells. One was a dry hole near Red Fork. In 1896 Cudahy contracted with George Keeler, William Johnstone, Frank M. Overlees, and several other prominent Cherokees to drill on the banks of the Caney River just north of downtown Bartlesville. It was the winter of 1896–97, and the weather was bitterly cold. Nonetheless, Cudahy ordered his drillers, A. P. McBride and C. L. Broom, to haul his Red Fork rig to Bartlesville. The trip took almost three weeks as the oilmen were forced to cut a path through the ice covering the Arkansas River so the wagons could ford the waterway, but by late January 1897 they were ready to start drilling. At 3:00 p.m. on April 15, 1897, Jennie Cass dropped an explosive charge down the well's hole and brought in the state's first commercially successful oil well, the Nellie Johnstone Number One, at fifty barrels per day. Unfortunately, the Nellie Johnstone's output quickly swamped the local market, and there was no available means for shipping the crude to the nearest refinery at Neodesha, Kansas. As a result, the well was capped.

Because the Nellie Johnstone had not been properly sealed, a series of leaks developed. A trickle of oil eventually collected in the sump and then overflowed in a small rivulet into the Caney River. Later, a group of children was ice-skating on the river and built a bonfire to keep warm. Flames ignited the rivulet of oil, spread to the Nellie Johnstone, and destroyed it. Two years later, in the summer of 1899 the Kansas, Oklahoma Central and Southwestern Railway (later the Atchison, Topeka and Santa Fe Railway) reached Bartlesville and offered rail service to Neodesha. With the ability to transport the crude to market, oilmen flocked to Bartlesville, turning it into a major oil-boom town overnight and touching off one of the greatest rushes to riches in the American West—the Oklahoma oil boom era.

In the first three decades of the twentieth century discovery after discovery was made in the Sooner State. In 1901 came Red Fork Field and the emergence of Tulsa as "the Oil Capital of the World." The Alluwe Field and the Cherokee Shallow Sands District soon were discovered, as was Cleveland, the first major discovery in Oklahoma Territory when it was opened in 1904, as were the Muskogee Field and its associated pools. The following year Glenn Pool, one of the greatest oil fields ever, made Oklahoma a national leader in oil production and induced several major energy companies to tie the state into their major oil transmission pipelines.

A decade earlier, on March 16, 1896, Henry Foster had leased the mineral rights to the entire Osage Nation for ten years. Soon afterward he died, and his brother, Edwin B. Foster, became a lessee and organized the Phoenix Oil Company to develop the Osage interests. After several unsuccessful wells were drilled in the region, Foster formed the Indian Territory Illuminating Oil Company (ITIO) in 1901 to take over the operation. When Foster died, ITIO slipped into receivership and several subleases were granted to creditors including Theodore N. Barnsdall, who used the lease to form Barnsdall Oil Company.

In 1903 Henry Foster's son, Henry Vernon Foster, became president of ITIO. To raise capital he subdivided ITIO's Osage Lease into 348 lots and subleased many. Even so, as the Osage Blanket Lease's expiration date of March 1906 approached, little development had taken place. In March 1905 ITIO's Osage Lease was reduced to 680,000 acres. The other 171,000 acres were opened to other oil companies through a series of lease sales held under the Million Dollar Elm in Pawhuska by Colonel Ellsworth E. Walters. Eventually, more than 350 oil pools were located in the Osage Nation. The most prolific was the Burbank Field, opened in May 1920.

Also in 1906 the final Osage roll of 2,229 tribal members was completed. Tribal land was allotted, but mineral rights were held in common. Each member was entitled to one Osage headright, or one equal share of oil and natural gas royalty, and the money poured in. On one afternoon in 1924 Walters sold $10,888,000 worth of leases, with a single 160-acre lease bringing $1,990,000. Such huge wealth occasioned an "Osage Reign of Terror," a series of crimes in which Osage headright holders were swindled and sometimes murdered for their share of royalty money.

Just to the west of the Osage, Ernest W. Marland opened the Ponca City Field in 1911 when he completed the Willie Cries for War Number One on sacred Ponca land. This strike attracted other wildcatters, and in 1917 the Garber Field was located. It proved to be one of the largest producers of high-grade crude during World War I. However, when Marland discovered the Tonkawa or Three Sands Field in 1921, the oil legacy of north-central Oklahoma was assured, as was the future of Marland Oil Company, the forerunner of Ponca City-based Conoco.

In 1912 Tom Slick found an oil seep on the Frank Wheeler farm east of Cushing. Wheeler had paid sixty-five cents per acre for his farm in 1907, but when Slick uncovered the huge Cushing Field, the value skyrocketed. Jackson Barnett, who been granted a 160-acre allotment in the Cushing Field, owned a farm that eventually produced oil worth $24 million. So great was Cushing's output that in 1919 its wells produced 17 percent of all oil marketed in the United States and between 1912 and 1919 produced 3 percent of all the world's output.

To the south in Carter County an equally rich discovery, the Healdton-Hewitt Field, was rediscovered in 1913. The area originally had been drilled in 1888 by a man named Palmer; he had been attracted by the numerous oil seeps. However, Palmer could find no market for his crude and abandoned the well. When Roy M. Johnston heard stories of the old well, he and Edward Galt and A. T. McGhee visited the site and, with Wirt Franklin and Sam Apple, leased much of the oil springs area. The discovery well was completed in August 1913, and the rush was on. Healdton proved to be one of Oklahoma's richest fields, and in 1919 the nearby Hewitt Pool opened. In 1917 D. W. Ohern and Frank Buttram started active drilling in the Cement Field in Caddo County. To the east in Garvin County Magnolia Petroleum Company uncovered the Eola or Robberson Field in 1920.

Development of the huge Hugoton-Guymon Gas Field started in the Texas Panhandle in 1920 and spread northward across the Oklahoma Panhandle into southwestern Kansas. The field proved to be one of the nation's largest natural gas discoveries and a principal source of helium. During the Roaring Twenties perhaps the greatest discovery was made at Seminole. Drilling started near Wewoka as early as 1902, and several fields were located in the following decades. In 1926–27 five of the state's largest discoveries were located—Earlsboro, Seminole City, Bowlegs, Searight, and Little River. Fifty pools were located in and around Seminole County, and between July 1926 and September 1929 these fields produced more than 250 million barrels of oil.

Seminole was followed by the huge discovery at Oklahoma City in 1928. Oklahoma City's first oil well was drilled in 1889 shortly after the run; the driller, however, was looking for water and abandoned the well. The Foster Petroleum Company and ITIO brought in the Oklahoma City Number One as a gusher on December 4, 1928.

The discovery of the Oklahoma City Field marked the transition from creekology to modern geology. Oklahoma had a long history of such eminent geologists as Charles N. Gould, who began his work with the Oklahoma Territorial Geological and Natural History Survey in 1900 and later headed the Oklahoma Geological Survey. Gould was a pioneer in the scientific exploration of oil-producing regions. Also important in the history of petroleum exploration was the work of John C. Karcher, Irving Perrine, and W. P. Haseman, who conducted the first successful reflection seismograph experiments in Oklahoma in 1921.

In 1901 the University of Oklahoma began offering courses in geology, and as early as 1913 the Gypsy Oil Company created a separate geological department under M. J. Munn. In 1915 Everette L. DeGolyer, Charles H. Tyler of the University of Oklahoma, J. Elmer Thomas, and James H. Gardner instigated plans to form a professional organization of geologists. A call went out to interested individuals, and in February 1917 the Southwestern Association of Petroleum Geologists, later renamed the American Association of Petroleum Geologists, was formed with headquarters in Tulsa. A decade later, in 1928 the University of Tulsa opened its School of Petroleum Geology. Nonetheless, prior to the Oklahoma City discovery many oilmen continued to rely on surface indicators and not on geology. However, when Dean A. McGee successfully used scientific geology to unravel the mystery of the Oklahoma City Field, oilmen learned that science held the key to finding oil.

Large pockets of high-pressure natural gas and huge oil production characterized Oklahoma City. One well, the Number One McBeth, had a daily flow of 101,002 barrels of oil. When gas pockets were unexpectedly encountered, the result was a runaway gusher that often sprayed entire neighborhoods before the crew controlled the well. The most famous of these was the Wild Mary Sudik. For ten days between March 26 and April 4, 1930, the Wild Mary threw twenty thousand barrels of oil and two hundred million cubic feet of natural gas into the air daily as workmen struggled to cap the well. A black film of oil settled on Norman, eleven miles to the south, and when the wind shifted, the mist fell on Nicoma Park, eleven miles to the north.

Oklahoma scientists also were in the forefront of the petrochemical industry. In 1927 John C. Walker of Empire Gas and Fuel Company (later Cities Service Oil Company) worked to eliminate the problem of rust in the company's natural gas pipeline system. Walker hoped to remove oxygen from the gas by promoting oxidation at high temperature, but the experiment unexpectedly created formaldehyde, methanol, acetone, acetaldehyde, higher alcohols, ketones, and aldehydes. Walker unwittingly had given birth to Oklahoma's petrochemical industry. Cities Service's plant at Tallant, the state's first such facility, became known as "the petrochemical patriarch of the Southwest."

The opening of the Seminole and Oklahoma City fields coincided with the onset of the Great Depression. With the economic downturn and the glut of oil on the market, the price of crude plunged. Arguing that he was preserving the state's oil and gas resources for future generations Gov. William H. Murray ordered a prorationing program and sent the Oklahoma National Guard into the fields to force compliance in 1931 and 1932. When the price of oil rose and the state legislature adopted a comprehensive oil code to control overproduction, the troops were removed. In 1936 Gov. Ernest W. Marland declared martial law around the State Capitol in a dispute with Oklahoma City officials over drilling on state property.

There were several other pre–World War II discoveries. The Edmond Field opened in 1930, and the Fitts Field opened in 1933. By 1935 forty-four of the state's seventy-seven counties were producing oil in commercial quantity from 408 named pools. That same year the Oklahoma Corporation Commission was authorized to establish ten-acre drilling sites, and the Oklahoma City-based Interstate Oil Compact Commission was organized. In 1937 one of the first large secondary recovery programs was implemented in Nowata, Osage, Rogers, Tulsa, and Washington counties.

The huge demand for petroleum during World War II spurred additional drilling, and in 1941 forty-one new fields were located in Oklahoma. At the same time the production of liquefied natural gas reached new heights. In 1943 Ace Gutowsky located the West Edmond Field using modern seismographic equipment. In 1947 the discovery well of the Golden Trend, which includes twenty-two separate fields, was completed. The West Short Junction Field was opened in 1948.

However, beginning in the 1950s the rate of depletion exceeded discoveries. The only major find during this period was the Sooner Trend. Some drilling activity continued as fields were expanded and secondary recovery operations in older producing areas were undertaken. Many major oil companies began moving overseas. In foreign countries the technological innovation of Oklahoma-based companies such as Kerr-McGee and Reading and Bates made possible the economical development of potentially oil-rich areas once considered impenetrable.

The trend was reversed with the Arab oil embargo in the early 1970s and the deregulation of deep natural gas. The development of the Deep Anadarko Basin in southwestern Oklahoma triggered a new oil-boom era when Robert A. Hefner III, began an extensive drilling program in the area around Elk City. Once again Oklahoma boomed as oilmen rushed to the state as hundreds of millions of dollars poured from the earth.

However, in the early 1980s the boom "busted." In 1982 Oklahoma had its first failure of revenue in state history. By 1999 production had declined markedly, dropping to about 40 percent of the 1986 level. Concomitantly, employment fell, and at the end of the twentieth century only one in sixty workers had petroleum industry–related jobs. By the close of the twentieth century, Oklahoma's oil economy had rebounded; however, many major companies had begun abandoning the state as overseas production came to dominate the world's energy supply. Nonetheless, the energy industry continued to be a cornerstone of the state's economy, producing in excess of $3.3 billion in the year 2000.

Kenny A. Franks

Related Resources

Barrel Number One, American Petroleum Institute film about exploration, production, and distribution of petroleum products, 1955
(F2010.144.1.007, Kerr-McGee Corporation Collection, OHS)