The California oil and gas industry has been a major economic and cultural component of the US state of California for over a century. Oil production was a minor factor in the 19th century, with kerosene replacing whale oil and lubricants becoming essential to the machine age. Oil became a major California industry in the 20th century with the discovery on new fields around Los Angeles and the San Joaquin Valley, and the dramatic increase in demand for gasoline to fuel automobiles and trucks. In 1900 California pumped 4 million barrels (640,000 m3), nearly 5% of the national supply. Then came a series of major discoveries, and the state pumped 100 million bbl (16 million m3) in 1914, or 38% of the national supply. [1] In 2012 California produced 197 million bbl (31 million m3) of crude oil, out of the total 2,375 million bbl (378 million m3) of oil produced in the US, representing 8.3% of national production. [2] California drilling operations and oil production are concentrated primarily in Kern County, San Joaquin Valley and the Los Angeles basin.
There is also some offshore oil and gas production in California, but there is now a permanent moratorium on new offshore oil and gas leasing and new oil platforms in both California and federal waters, although new wells can be drilled from existing platforms. These restrictions were imposed after the 1969 Santa Barbara oil spill released oil into the Pacific Ocean. [3] California produces some gas but imports most of its supply by pipeline.[ citation needed ][ when? ]
There was plenty of visible oil in California and eastern experts said it would be worth a fortune. The early oil ventures in the 1850s and 1860s were well-funded, but all of them failed. The drillers spent $1 million and their poor quality oil was worth only $10,000. [4]
Prospectors after 1848 discovered an increasing number of oil seeps—oil seeping to the surface. In Northern California, there were oil seeps in Humboldt, Colusa, Santa Clara, and San Mateo Counties, and in the asphaltum seeps and bituminous residues in Mendocino, Marin, Contra Costa, Santa Clara, and Santa Cruz Counties. In Southern California, large seeps were found in Ventura, Santa Barbara, Kern, and Los Angeles Counties. [5] Interest in oil and gas seeps was stirred in the 1850s and 1860s, Interest became widespread after the 1859 commercial discovery of oil in Pennsylvania.
In 1864, Yale chemistry professor Benjamin Silliman, Jr., a leading expert, examined the oil seepages in Ventura County, and wrote reports that indicated excellent commercial possibilities. This led Leland Stanford and his brother Josiah to dig oil tunnels into the south side of Sulphur Mountain, while Thomas A. Scott and Thomas Bard drilled into the north side. [6] The Philadelphia & California Petroleum Company, drilled wells in the Ojai region between 1865 and 1867; one became California’s first "gusher."
As early as 1856 a company began working the tar pits at La Brea Ranch, near Los Angeles, distilling some oil. Initially these oil discoveries were done by hand digging a well with pick and shovel or even tunneling (by hand) into a mountain that contained oil. By sloping the tunnels downward the oil ran out the mouth to be collected. Some of this oil was so thick that when pipelines were used they had to be heated in winter to get the oil to flow. Transporting the oil to a market or refinery was nearly always a primary concern. In 1866 the first oil refinery in California was built near McKittrick Tar Pits in Kern County to process kerosene and asphalt.
Much of California’s early oil discoveries were in the form of asphalt also known as bitumen a sticky, black and highly viscous liquid or semi-solid form of petroleum. It was found in natural deposits and by processing it became a refined product. Some cities in California started asphalting their streets in the 1870s to keep down dust and mud. In the 20th century the primary use is in road construction, where it is used as the glue or binder mixed with aggregate particles or gravel to create asphalt concrete.
The story of oil production in California began in the late 19th century. [7] As of 2012, California was the nation's third most prolific oil-producing state, behind only Texas and North Dakota. In the 20th century, California’s oil industry grew to become the state’s number one GDP export and one of the most profitable industries in the region. [8]
Standard Oil largely controlled the distribution of oil products in the state. After its breakup by the Supreme Court in 1911, its California operations became Standard Oil of California or "California Standard." It is now part of Chevron Corporation. [9]
The Los Angeles City Oil Field was discovered in 1890, and made famous by Edward L. Doheny's successful well in 1892. The field became the top producing oil field in California, accounting for more than half of the state's oil in 1895. Doheny became one of the richest men in California. The peak year was 1901, with 200 separate oil companies active on the field. In 2011 only one small well remained in production.
In 1900, the state produced 4 million barrels. [7] In 1903, California became the leading oil-producing state in the US, and traded the number one position back-and forth with Oklahoma through the year 1930. [10] Production at the various oil fields increased to about 34 million barrels by 1904. By 1910 production has reached 78 million barrels.
By 1920, oil production in California had expanded to 77 million barrels. [7] Between 1920 and 1930, new oil fields across Southern California were being discovered with regularity including Huntington Beach in 1920, Long Beach and Santa Fe Springs in 1921, and Dominguez in 1923. [7] Southern California had become the hotbed for oil production in the United States. A 1926 Times magazine article stated that the Standard Oil Company of California (now Chevron) was then the largest individual producer of crude oil in the U.S. and dominated the marketing of petroleum products along the west coast of both Americas." [11]
In 1929, however, the sense of crisis in the oil market grew as vast amounts of oil supplies were going unused in Southern California and throughout the US. [11] The situation got worse during the Great Depression, with oil selling for 25 cents a barrel. The solution came in the mid-1930s when the Railroad Commission of Texas gained permission of Washington and the major oil companies to set the national price of oil.
Except for a couple of mediocre wells on the "westside" of the San Joaquin Valley, and a few tar mining operations, farming was the mainstay of the valley in the late 1800s. However, the 1899 discovery of "black gold" in a shallow hand-dug oil well on the west bank of the Kern River changed all that. The Kern River discovery started an oil boom, and a forest of wooden derricks sprang up overnight on the flood plain just north of Bakersfield, a sleepy farm town known to most as "Bakers Swamp". Soon Kern River production accounted for 7 out of every 10 barrels of oil that came from California, and the Kern River field by 1903 had made California the top oil-producing state in the country.
Inspired by the Kern River discovery, oil prospectors fanned out across the San Joaquin Valley, and derricks began to pop up everywhere. Many discoveries followed, and a string of spectacular gushers at Coalinga, McKittrick and Midway-Sunset fields kept the valley in the oil news.
The Valley is also home to 21 giant oil fields which have produced over 100 million barrels of oil each, with four "super giants" that have produced over 1 billion barrels of oil. Among these "super giants" are Midway-Sunset with approximately 3.5 billion barrels of total production since discovery (the largest oil field in the lower 48 United States [12] ), Kern River Oil Field with 2.6 billion barrels of total production, South Belridge Oil Field with 2.1 billion barrels of total production, and Elk Hills Oil Field with approximately 2.2 billion barrels of total production over its lifespan (former U.S. Naval Petroleum Reserve). [13]
Five companies controlled most of the refining and distribution of oil in California in the early twentieth century. The leader was California Standard (Chevron Corporation), a separate company since the court-ordered breakup of the Standard Oil trust in 1911. Second was the Union Oil Company, formed in 1890, and based in Ventura County. The Shell Company of California was the only affiliate of an outside Corporation. The Associated Oil Company was fourth, and was controlled by the Southern Pacific Railroad Company. The newest company was General Petroleum Company, organized in 1910, which operated in the San Joaquin and southern fields. Union Oil Company of California, ("Unocal") was bought out by Chevron in 2005 after a Chinese attempt to buy the company failed. [14]
Widely distributed in sedimentary basins of southern California is the Monterey shale, thought by some to contain more than 400 billion barrels of oil in place. The formation has for many years yielded oil in areas where it is naturally fractured, and oil companies are investigating ways to make the shale in currently non-productive areas give up the oil through artificial fracturing. [15] Over some large areas, California's geologic layers are complexly folded, making horizontal drilling difficult. As of 2013, the Monterey shale has resisted attempts to obtain economic production of oil through hydraulic fracturing, fracking, which involves injecting water, sand, and chemicals into the shale under high pressure, to crack the rock and allow the oil and gas to flow. The U.S. Energy Information Administration estimated there were over 15 billion barrels of oil; further study reduced this amount to 21 million barrels of unconventional tight oil, owing to severe fracturing in the shale rock. [16]
Initially the natural gas discovered was allowed to vent or was burned off. Only a relatively small fraction was used for lighting or heating purposes. At the turn of the century, before electrical lights were common, street lighting in cities was done by gas street lamps. Some homes were lighted with gas lamps. Much of this gas was generated from coal. By the time significant amounts of natural gas became available electricity was taking over the task of lighting.
The gas industry market structure was dramatically altered by the discovery of massive natural gas fields throughout the American Southwest beginning in 1918. [19] The natural gas found was cleaner than manufactured gas and less expensive to produce. [20] While natural gas sources were abundant in Southern California, no economical sources were then available in Northern California. In 1929, PG&E constructed a 300-mile pipeline from the Kettleman oil field to bring natural gas to the San Francisco Bay area. [21] [22] The city became the first major urban area to switch from manufactured coal gas to natural gas. [19] The transition required the adjustment of burners and airflow valves on 1.75 million appliances and gas lamps. [19] In 1936, PG&E expanded distribution with an additional 45-mile pipeline from Milpitas. PG&E gradually retired its gas manufacturing facilities, although some plants were kept on standby. [23]
During World War II defense related population and industry growth boosted natural gas sales in California and cut deeply into the state's natural reserves. [24] [25] In 1947, PG&E entered into a contract with the Southern California Gas Company and the Southern Counties Gas Company to purchase natural gas through a new 1,000-mile pipeline running from Texas and New Mexico to Los Angeles. [25] Another agreement was reached with the El Paso Natural Gas Company of Texas for gas delivery to the California-Arizona border. In 1951, PG&E completed a 502-mile gas main which connected with the El Paso network at the state line. [25]
In 2012 California was the 13th largest state in terms of natural gas production, with a total annual production of 248 billion cubic feet of gas. [26] Today natural gas is the second most widely used energy source in California. Depending on yearly weather conditions, about 45% of the total natural gas used is now burned in natural gas fired electric generator plants for electricity generation as coal burning plants are phased out. Most of these plants are cogeneration plants that use high temperature burning gas to run gas turbine driven generators and use the captured turbine exhaust heat as power for a steam turbine driven generator set. By combining these technologies almost 60% of the energy from burning gas can be converted from heat into electrical power. About 9% of the natural gas is used in facilitating the extraction of more oil and gas. Roughly 21% is used for residential space and water heating, cooking, clothes drying, etc.; about 8.6% is used for commercial building and water heating, 14.5% is used in industrial use and some of the rest has varied uses such as fueling bus fleets and UPS trucks. [27]
California imports about 85% of its natural gas using six large gas lines. The majority of its natural gas comes from the American Southwest, the Rocky Mountain states, and Canada. The remaining 15% of California's natural gas is produced in-state, both off-shore and onshore.
Natural gas-fired electricity generator plants have been the dominant use of natural gas California for many years. Natural gas is a dispatchable resource that fills in the gaps from other electrical resources when peak power loads are needed. In addition, CO2 releases from a natural gas fired generator station are about half the CO2 that coal fired plants would emit. [28] Typically California gets about 14% of its electricity from water generated electricity. The availability of hydroelectricity resources depends upon annual rainfall in the state so varies considerably year by year. The emergence of renewable and often highly variable resources for electricity generation such as solar and wind power has led to higher natural gas use in generation due to its lower cost, versatility and high reliability as a source of electricity generation—so far.
Natural gas prices spiked in 2007 but have decreased significantly since then as more gas has become available nationwide. The biggest change in U.S. gas supply has been the expansion of total natural gas production in the Lower 48 States, which has increased 20% from 2005 to 2011. This increase is largely attributed to breakthroughs in horizontal drilling techniques and increased use of hydraulic fracturing.
Six major interstate pipelines deliver the 85% of natural gas imported to California. Inside California more than 100,000 miles of intrastate pipelines take the natural gas to customers for immediate consumption or to underground storage facilities for later use. [29] There are 10 operating natural gas storage facilities in California, which use underground depleted oil or natural gas production fields. All but three of them are owned by either Pacific Gas and Electric or Southern California Gas Company. The latest interstate pipeline additions are the 42 inch diameter Ruby Pipeline, which began operation in California near the Oregon border in July 2011, [30] and the Kern River Expansion, which came on-line in October 2011.
The early California oil industry has served as a setting for several notable fictional novels and films:
The history of the petroleum industry in the United States goes back to the early 19th century, although the indigenous peoples, like many ancient societies, have used petroleum seeps since prehistoric times; where found, these seeps signaled the growth of the industry from the earliest discoveries to the more recent.
Spindletop is an oil field located in the southern portion of Beaumont, Texas, in the United States. The Spindletop dome was derived from the Louann Salt evaporite layer of the Jurassic geologic period. On January 10, 1901, a well at Spindletop struck oil. The Spindletop gusher blew for 9 days at a rate estimated at 100,000 barrels (16,000 m3) of oil per day. Gulf Oil and Texaco, now part of Chevron Corporation, were formed to develop production at Spindletop. The Spindletop discovery led the United States into the oil age. Prior to Spindletop, oil was primarily used for lighting and as a lubricant. Because of the quantity of oil discovered, burning petroleum as a fuel for mass consumption suddenly became economically feasible.
A petroleum seep is a place where natural liquid or gaseous hydrocarbons escape to the Earth's atmosphere and surface, normally under low pressure or flow. Seeps generally occur above either terrestrial or offshore petroleum accumulation structures. The hydrocarbons may escape along geological layers, or across them through fractures and fissures in the rock, or directly from an outcrop of oil-bearing rock.
A blowout is the uncontrolled release of crude oil and/or natural gas from an oil well or gas well after pressure control systems have failed. Modern wells have blowout preventers intended to prevent such an occurrence. An accidental spark during a blowout can lead to a catastrophic oil or gas fire.
The Lakeview Gusher was an eruption of hydrocarbons from a pressurized oil well in the Midway-Sunset Oil Field in Kern County, California, in 1910. Caused by a blowout, it created the largest accidental oil spill in history, lasting 18 months and releasing an estimated 9 million barrels of crude oil.
The Canadian petroleum industry arose in parallel with that of the United States. Because of Canada's unique geography, geology, resources and patterns of settlement, however, it developed in different ways. The evolution of the petroleum sector has been a key factor in the history of Canada, and helps illustrate how the country became quite distinct from her neighbour to the south.
Türkiye Petrolleri Anonim Ortaklığı (TPAO) was founded in 1954 by Law No. 6327 with the responsibility of being involved in hydrocarbon exploration, drilling, production, refinery and marketing activities of oil and gas in Turkey as the national company.
The Midway-Sunset Oil Field is a large oil field in Kern County, San Joaquin Valley, California in the United States. It is the largest known oilfield in California and also the largest oil field in the country by total oil in place, though Alaska's Prudhoe Bay Oil Field and the East Texas Oil Field have larger total production values of over 13 billion barrels and 5.4 billion barrels respectively compared to Midway-Sunset which has produced nearly 4 billion barrels.
The Kern River Oil Field is a large oil field in Kern County in the San Joaquin Valley of California, north-northeast of Bakersfield in the lower Sierra foothills. Yielding a cumulative production of close to 2 billion barrels (320,000,000 m3) of oil by the end of 2006, it is the third largest oil field in California, after the Midway-Sunset Oil Field and the Wilmington Oil Field, and the fifth largest in the United States. Its estimated remaining reserves, as of the end of 2006, were around 476 million barrels (75,700,000 m3), the second largest in the state. It had 9,183 active wells, the second highest in the state. The principal operator on the field is Chevron Corporation
The Elk Hills Oil Field is a large oil field in western Kern County, in the Elk Hills of the San Joaquin Valley, California in the United States, about 20 miles (32 km) west of Bakersfield. Discovered in 1911, and having a cumulative oil production of close to 1.5 billion barrels (240,000 dam3) and a cumulative barrel of oil equivalent production of 2.2 billion BOE at the end of 2023, it is the fifth-largest oil field in California, and the seventh-most productive field in the United States.
The Coalinga Oil Field is a large oil field in western Fresno County, California, in the United States. It surrounds the town of Coalinga, about halfway between Los Angeles and San Francisco, to the west of Interstate 5, at the foot of the Diablo Range. Discovered in the late 19th century, it became active around 1890, and is now the eighth-largest oil field in California, with reserves totaling approximately 58 million barrels (9,200,000 m3), and over 1,600 active oil wells. The principal operators on the field, as of 2008, were Chevron Corp. and Aera Energy LLC.
The Buena Vista Oil Field, formerly the Naval Petroleum Reserve No. 2 (NPR-2) is a large oil field in Kern County, San Joaquin Valley, California in the United States. Discovered in 1909, and having a cumulative production of approximately 667 million barrels (106,000,000 m3), it is the tenth-largest oil field in California. As of year end 2006 the field had a total reserve of only about one percent of its original oil, and having produced a mere 713,000 barrels (113,400 m3). Since, the field has gone through a revitalization. Crimson Resources initiated a waterflood in the Etchegoin Formation, saw good response and sold the asset to Occidental Petroleum. CRC continued the development of the waterflood, but also tested the viability of the Monterey Formation. The Monterey Formation at Buena Vista has proven to be a viable target and is currently being developed.
The Lost Hills Oil Field is a large oil field in the Lost Hills Range, north of the town of Lost Hills in western Kern County, California, in the United States.
The Kettleman North Dome Oil Field is a large oil and gas field in Kings and Fresno counties, California. Discovered in 1928, it is the fifteenth largest field in the state by total ultimate oil recovery, and of the top twenty oil fields, it is the closest to exhaustion, with less than one-half of one percent of its original oil remaining in place.
Mericos "Max" Whittier (1867–1925) was a pioneer in the early California oil industry and was instrumental in the development of 3 of California's billion barrel oil fields: Kern River, Midway-Sunset, and South Belridge.
The McKittrick Oil Field is a large oil and gas field in western Kern County, California. The town of McKittrick overlies the northeastern portion of the oil field. Recognized as an oil field in the 19th century, but known by Native Americans for thousands of years due to its tar seeps, the field is ranked 19th in California by total ultimate oil recovery, and has had a cumulative production of over 303 million barrels (48,200,000 m3) of oil. The principal operators of the field as of 2008 were Chevron Corp. and Aera Energy LLC, but many independent oil exploration and production companies were also active on the field. The California Department of Oil, Gas and Geothermal Resources (DOGGR) estimates approximately 20 million recoverable barrels of oil remain in the ground.
Ellwood Oil Field and South Ellwood Offshore Oil Field are a pair of adjacent, partially active oil fields adjoining the city of Goleta, California, about twelve miles (19 km) west of Santa Barbara, largely in the Santa Barbara Channel. A richly productive field in the 1930s, the Ellwood Oil Field was important to the economic development of the Santa Barbara area. A Japanese submarine shelled the area during World War II. It was the first direct naval bombardment of the continental U.S. since the Civil War, causing an invasion scare on the West Coast.
The Long Beach Oil Field is a large oil field underneath the cities of Long Beach and Signal Hill, California, in the United States. Discovered in 1921, the field was enormously productive in the 1920s, with hundreds of oil derricks covering Signal Hill and adjacent parts of Long Beach; largely due to the huge output of this field, the Los Angeles Basin produced one-fifth of the nation's oil supply during the early 1920s. In 1923 alone the field produced over 68 million barrels of oil, and in barrels produced by surface area, the field was the world's richest. During the early stages of the field's development, unlike most oil fields, land was leased by the square inch instead of by the acre. The field is eighth-largest by cumulative production in California, and although now largely depleted, still officially retains around 5 million barrels of recoverable oil and has produced 963 million out of 3,600 million barrels of original oil in place. 294 wells remained in operation as of the beginning of 2008, and in 2008 the field reported production of over 1.5 million barrels of oil. The field is currently run entirely by small independent oil companies, with the largest operator in 2009 being Signal Hill Petroleum, Inc.
The Los Angeles City Oil Field is a large oil field north of Downtown Los Angeles. Long and narrow, it extends from immediately south of Dodger Stadium west to Vermont Avenue, encompassing an area of about four miles long by a quarter-mile across. Its former productive area amounts to 780 acres (3.2 km2).
The history of oil production in California began in the late 19th century. In 1903, California became the leading oil-producing state in the US, and traded the number one position back-and forth with Oklahoma through the year 1930. As of 2022, California produced 3% of the crude oil of the nation, behind Texas, New Mexico, North Dakota, Alaska, Colorado, and Oklahoma. In the past century, California's oil industry grew to become the state's number one GDP export and one of the most profitable industries in the region. The history of oil in the state of California, however, dates back much earlier than the 19th century. For thousands of years prior to European settlement in America, Native Americans in the California territory excavated oil seeps. By the mid-19th century, American geologists discovered the vast oil reserves in California and began mass drilling in the Western Territory. While California's production of excavated oil increased significantly during the early 20th century, the accelerated drilling resulted in an overproduction of the commodity, and the federal government unsuccessfully made several attempts to regulate the oil market.