January 1957

A lush new field for mystery novels and extravaganzas is opened up by news of the theft of oil maps from Gulf Oil Corp. At last…a wholesale distributor of automotive supplies advertises a revolutionary new “fuel” made from water plus Chemical X. With a retrofitted “fuel kit”, the motorist will be able to make his own fuel for use in any combustible engine. (Just wait until RONCO gets a hold of this one.) If you have been wondering how the oil industry was being viewed by the Government, wonder no more. A recent recommendation by the Bureau of the Budget was to combine all statistics for the previously classified “Products of Coal and Petroleum” into a group called “Chemicals and Allied Products.” Obviously the Government was no more help to the oil industry back then than it is today.

East Texas crude oil - $3.25/bbl

 

January 1982

U.S.S.R. minister for oil and gas industry construction, Boris (probably an alias) Shcherbina asserts flatly that the 3,000 mile to western Europe gas pipeline will be completed ahead of the contract date, no matter what obstacles are thrown up. (My money is on the obstacles.) A couple in New York state that owns 100 shares of Marathon stock files suit in federal court in Cincinnati in an attempt to block U.S. Steel’s pending purchase of Marathon Oil. (Only in !) Shell Development reports plans to develop technologies for extracting oil from diatomite, as found in the Belridge field in Kern County, Calif.

active rig count – 4,469

 

January 1997

Enron reports that their planned merger with Oregon’s Portland General Corp. electric utility will “serve the public interest and formalize their long-standing commitments.”  Japan mobilizes 1,000 vessels of all kinds to help hasten the cleanup of an oil spill caused by the breakup of a Russian tanker in a storm in the Sea of Japan. The Department of Interior comes knocking on the doors of ARCO, Koch, Marathon, Mobil, Oryx, Oxy, Phillips, Shell, Texaco and Unocal with royalty underpayment bills from the State of California totaling $274 million.

Light sweet crude oil - $25.64/bbl
Natural Gas - $2.86/MMBTU
active rig count - 845                 

 

The Rest of the Yarn

Continuing this month with a look back at the early history of oil trading in this country, we take up where we left off in the late 1800’s when speculators were making and losing fortunes in a matter of hours.

 

The beginning of the end of the oil exchanges came in 1895 when Joseph Seep, crude oil buyer for the old Standard Oil Co., announced that thereafter he would buy crude at the highest price justified by world markets, without regard to quotations for oil certificates. This brought some stability to the price and eliminated the need for brokers. Gradually the oil exchanges went out of business.

 

As oil production moved into the Southwest and Mid-Continent, some oil exchanges flourished for a time in flush areas. As soon as pipelines were built and field prices began to be posted, however, oil was bought as a commodity for actual use, not as certificates for speculation.

 

At this point the gamble switched to the vagaries of Mother Nature (with a little help from “divining” and “creekology”). Sadly for some though, it appeared that the day had passed when the price of crude would be determined by a bunch of speculators trading in paper certificates (Or had it?).

 

Readers are encouraged to submit brief, ostensibly true stories about notable personalities from our industry’s storied past. Submissions should be e-mailed to contest@houston.spe.org.

 

History Quiz

OK…You know all about oil and gas pipelines, but can you name the location of the world’s longest liquid-sulfur pipeline?

 

If you would like to participate in this month’s quiz, e-mail your answer to contest@houston.spe.org by January 15. The winner, who will be chosen randomly from all correct answers, will receive a $50 gift certificate to a nice restaurant.

 

Answer to December’s Quiz

The Exchange Bank in , which opened in 1910, was formed largely to help fund the oil empire of oil industry baron and resident Harry Sinclair.

 

Answer to November’s Quiz

Although there is some question as to whether or not he intended it for that purpose, Verdi’s grand opera Aida was allegedly commissioned to commemorate the opening of the

 

Congratulations to November’s winner – Scott Ogier with Devon Energy