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Magazine | Okiecentric

Petro State

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Posted 12.18.13

Between 1910 and 1960, as the population of the city of Tulsa swelled from 18,000 to 261,000, the world was being transformed. Mind-bending inventions were coming online: Airplanes were buzzing the skies, cars and trucks were zipping across the country, phone lines were installed, movie theaters were sprouting up,diseases were cured, atoms were split, and spaceships were launched. The world was becoming forever more mechanized and strange. Artists and architects and designers wanted to incorporate all of this into their work. Almost all of this fantastic stuff was coming courtesy of a compact fuel source drawn from deep within the earth: petroleum.

No other state in the Lower 48 has been so radically reshaped by petroleum as Oklahoma.

Tulsa’s strange buildings are totems to the oceans of hydrocarbon bubbling beneath the prairies. And not just Tulsa. Throughout Oklahoma’s 107 years of statehood (and about 50 years prior to becoming a state), a large swath of the population has devoted itself to turning the state inside out, bringing oil and gas to the surface, refining it, and sending it out all over the world. The logistics involved, and the flows and counter- flows of capital and labor, have radically reshaped the landscape and infrastructure of the state. No other state in the Lower 48 has been so radically reshaped by petroleum as Oklahoma.

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Beneath its surface, Oklahoma is like an inverted mountain range. Oklahoma City floats on a pile of sedimentary rock more than 10,000 feet above the Cherokee shelf, a chasm of hard igneous “basement” rock that eventually slopes upwards to the northeast. “Oil and gas are formed by the alteration of microscopic organisms that have been deposited with sediment that turns into sedimentary rock,” writes Oklahoma Geological Society’s Dan T. Boyd. Beneath these billions of tons of rock, organic matter is squeezed until it comes apart on a molecular level and renders into short chains of carbon and hydrogen atoms (hence the name hydrocarbon). Any organic matter will do this given enough time and pressure, but usually the product diffuses irretrievably through the sedimentary rock above it. But not in a geological basin. (Or not as much.)

“Sediments and organic remains reach maximum thickness when they accumulate in large, gradually subsiding depressions called geological basins,” writes Boyd. The oil becomes trapped between the lighter sedimentary rocks and the dense igneous rock, usually in plugs of dense brine, which act like cauls.

There are three major basins in Oklahoma: the Anadarko, Ardmore, and Arkoma basins, each a vast subterranean canyon complete with a trickle of oil and gas puddling at the bottom. Which is a fitting afterlife for Oklahoma’s primordial organic matter, since this oil and gas were once plankton and other sundry underwater creatures.

For two hundred million years, according to David Baird and Danney Goble’s Oklahoma: A History, the state lay submerged “beneath a shallow sea that, warmed by an equatorial sun, teemed with life.” (Ecologically conscious readers will point out here that these critters spent hundreds of millions of years absorbing climate-changing carbon dioxide.) Over the next three hundred million years, the movement of tectonic plates— enormous slabs of rock floating on the earth’s crust—jammed hills and mountains through the sea floor, or what was left of it since the water had long since drained away, and the squished sea-life percolated through a mile of light sedimentary rock and accumulated in an igneous trough and sat there unmolested until 1857, occasionally seeping to the surface.

People have always known about petroleum, particularly those who had a pyromaniacal streak. Phoenicians made smudge pots—crude, smoky lanterns—with the stuff, and it was probably one of the ingredients of Greek fire, a viscous fluid kind of like napalm the ancient Greeks would ignite and spray at enemy caravels. There were more mundane uses too, such as caulking baskets to make them waterproof, and for hallucinatory kicks: the Oracle of Delphi’s portentous ravings may have come courtesy of natural gas seeping into her cave. Closer to home, when the first European explorers, trappers and frontiersmen, hacked their way through the Ozark Mountains and Cross Timbers they would keep an eye out for a telltale rainbow smear or a faint hiss and otherwise inexplicable paucity of plantlife. According to the Oklahoma Historical Society’s website: “At Boyd Springs on Oil Creek in the Chickasaw Nation, travelers camping at the springs often drove a musket barrel into the water and ignited the seeping natural gas for illumination.” Indian tribes, as famously depicted scooping oil-laced water from a creek by Charles Banks Wilson, would use it for medicine and magic. And the more anarchic types of frontiersmen would toss a match and run for cover, watching an entire river burst into flames.

Early prospectors were drawn to another product of Oklahoma’s long-dead sea: its salt. And by 1859, about 20 years after the forced relocation of the Five Civilized Tribes, there were several commercial salt-drilling operations in the Indian territories. They were crude, often little more than pits lined with wooden planks with buckets to catch seeping salt water. Others were more sophisticated but dangerous, such as the spring pole—essentially a see-saw powered percussion drill, a sapling bent over a fulcrum, weighted down one side with a boulder, and the other, the bouncy side, driving a pole into the ground. Sometimes there was a steam engine powering the “downstroke,” often in a configuration called the walking beam. But, more often than not, some poor flunky was tugging the other end of the spring pole up and down.

One day, a Cherokee salt-driller in Salina named Lewis Ross (brother of Chief John Ross, according to the American Oil and Gas Historical Society) noticed streaks of black ooze in his brine. He knew immediately what it was (after all, the first commercially successful oil well in the United States was drilled that year in Titusville, Pennsylvania), and he sold the ten barrels a year he produced as a cheap substitute for lamp fuel. Yet despite the growing demand for it, moving oil all the way from the Indian territories to big cities in the East (where it would be distilled and sold as kerosene and lubricant) was prohibitively expensive. As “oil fever” swept Pennsylvania and crude derricks and rickety wooden pipelines were erected out East, the price of crude sank. Then came the Civil War and the grueling, humiliating Reconstruction. It didn’t seem worth drilling in faraway Oklahoma.The oil in the Indian territories was almost forgotten.

But not entirely. The Cherokee Nation began leasing concessions (a license for mineral rights) in 1884, and in 1889 Edward Byrd in the town of Chelsea in Rogers County drilled the first intentional Okie oil well. He found oil at 36 feet, according to the American Oil and Gas Historical Society, and his well produced half a barrel a day, which was “used as ‘dip oil’ to treat ticks.” The secret was seeping out. And despite John D. Archbold’s—the equivalent of chief operating officer in John D. Rockefeller’s oil monopoly Standard Oil—notorious response to the suggestion of there being significant oil deposits in Oklahoma: “Are you crazy, man? Why, I’ll drink every gallon of oil produced west of the Mississippi.” Oil finders were beginning to snout around the Indian territories. John Galey, a Pennsylvania oil man who had found oil in Neodesha, Kansas, “got in his buggy and followed the mounds from Kansas to the mound at Bartlesville,” where he met a man named George B. Keeler, who was running the Cherokee’s general store.

Oil spilled out and was accidentally set ablaze by ice-skaters on the Caney who’d lit a bonfire on the banks to keep warm.

“Mr. Galey said that he knew there was oil here because of the mounds which, in his opinion, had been thrown up by gas pressure,” Keeler said. (Keeler himself had earlier noticed oil seeps near the Caney River.) Galey tried to lease land in Bartlesville, but the deal fell through after Galey heard about the enormous Spindletop well and headed south for Beaumont, Texas. Keeler and his partner William Johnstone decided to go it alone. They raised funds, hired a drilling company, and on April 15, 1897, gathered a crowd of spectators to watch “Keeler’s stepdaughter, Jennie Cass, drop a go-devil (torpedo) down the shaft to set off a nitroglycerin charge [to shoot the well and loosen sand and rock to increase oil flow],” according to the Oklahoma Historical Society. Moments later the Nellie Johnstone No. 1 began flowing, becoming Oklahoma’s first commercially successful well. Unfortunately this was too much oil for Oklahoma’s budding market to bear, and the well was capped a few years later, poorly as it turned out. Oil spilled out and was accidentally set ablaze by ice-skaters on the Caney who’d lit a bonfire on the banks to keep warm. But more wells were opening, and in 1899 a rail-link to the refinery in Neodesha, Kansas, was completed, connecting Oklahoma’s oil to the rest of the world. And then the really big Okie wells started coming online.

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Between statehood and 1923, Oklahoma was America’s largest oil-producing state, and even after it lost its perch to California and later Texas, Oklahoma still managed to increase its share of American output until 1929, when Oklahoma accounted for 750,000 barrels of oil a day and 35 percent of all the oil produced in the United States. Wells in Oklahoma City spat oil ferociously, so high that one out-of-control gusher—the Indian Territory Illuminating Oil Co.’s Mary Sudik No. 1, aka the “Wild Mary Sudik”—managed to sprinkle droplets on students in Norman, 11 miles away. Cushing alone produced 17 percent of American oil in 1919 and 3 percent of the world’s output between 1912 and 1919. And all of this time there was plenty of appetite for new oil. The world’s economy and its demand for petroleum and its distillates were increasing, and oil prices were holding steady for the most part, making Oklahoma’s goliath output enormously profitable. Scores of millionaires were created. The Osage Nation managed to hold onto their mineral rights during the allotment phase. They charged oil companies a flat 10 percent royalty fee and paid each tribe member annual distributions equivalent to more than a million dollars today, which attracted scalawags and con men from all over the country eager to marry an Osage heir, which kicked off a string of killings that would come to be known as the Osage Reign of Terror. Meanwhile, the high wages paid by the oil industry led hundreds of thousands of former sharecroppers to descend on cities like Tulsa and Oklahoma City and the tiny boomtowns that would pop up whenever a new field was found. Oil money created architectural blooms and secondary and tertiary industries: engineering, manufacturing, insurance. There were counter- flows of capital and labor. Universities and colleges sprouted, which in turn revealed new methods of refining petroleum and natural gas. This stoked the economy even more.

And then the stock market collapsed, and oil prices—already under falling because of huge new discoveries in east Texas and Oklahoma— plunged. Texas and Oklahoma had a dilemma. They needed to restrict the supply of oil to keep the price of oil afloat (and preserve the fields for future), but individual oil producers had little incentive to choke off production because as prices came down they needed to pump a lot more to make the same amount of money.

Texas used its Railroad Commission and its charismatic commissioner, Ernest O. Thompson, to create a cartel system (which would eventually be used as a model for OPEC). The process was far from smooth in Texas, but it worked better than it did in Oklahoma. Oklahoma already had rules on its books about pro-rationing (these are mandatory production cuts during an oil glut), but Governor Murray wasn’t quite as good at explaining them to his constituents as Commissioner Thompson was, and the Okie oilers revolted against him. Murray fought with his senate and declared martial law in the fields. He used the National Guard to shut productive wells and then called on the Guard again and again (sometimes for mundane tasks like collecting tolls or parking- ticket fines). Prices and production recovered after the Great Depression and crept up during World War II, which triggered another drilling boom, particularly as new technologies for scrying the earth (such as reading the reflected shockwaves from a dynamite detonation on a sonar array) were put to work. But this new wave ebbed in the 1960s when Middle Eastern oil flooded the system and prices fell once more. But prices picked up again after OPEC’s oil embargo in the 1970s, and Okies rushed back to the fields, again armed with new technology, making new discoveries deep in the Anadarko Basin. Then the bottom dropped out of the market, and for 20 years Oklahoma’s energy industry seemed to be dying out.

But the cycle has started again. Emerging markets like India and China have hoovered up all the excess capacity in the world’s oil supply, and revolutions in the Middle East have shocked production and sent prices soaring. Oil prices are high (over $100 a barrel as I write this). And all of a sudden wells that were once considered too expensive or difficult to exploit are economically feasible.

* * *

There are two structures that define Oklahoma’s relationship with energy today. Last year, the Devon Energy Corporation completed its new headquarters in Oklahoma City: a 50-story blazing glass behemoth that is easily the tallest skyscraper in Oklahoma. The thing cost nearly three-quarters of a billion dollars to build. It’s a totem of corporate power, and in many ways reflects the company’s investment in an extraordinary new technology—one that could make the United States a petroleum exporting country all over again. (Actually it does export oil, but has been a net importer of oil since 1967.)

The vast majority of petroleum isn’t trapped in wells along the rims of geological basins but rather diffused in the sedimentary rock above it: the shale. For 20 years, a small engineering company called Mitchell Energy & Development Corp. had been trying to figure out how to release this potential bounty, even though gas prices were so low it hardly seemed worth it. In 1998 they figured it out; guided by 3-D seismic maps of subsurface geology, Mitchell Energy pioneered horizontal drilling and, as Daniel Yergin puts it in The Quest, “successfully adapted a fraccing technique [hydraulic fracturing using a slurry of water and chemicals under high pressure to squeeze oil and gas out of wells]—what is known as LSF, or light sand fraccing—to break up shale rock.” George P. Mitchell, owner of Mitchell Energy, put his company up for sale—but with gas prices so low, no one was willing to buy. No one, that is, except for Devon Energy.

Mitchell’s techniques—and the obscene price of oil—have unlocked huge reserves of shale oil in North America, the most famous being the oil sands in Alberta, Canada, and the Bakken Formation—an oily mass—stretching below the surfaces of Saskatchewan, Manitoba, Montana, and North Dakota. But getting the oil out of the ground is only the first step, there’s also the herculean task of processing millions of barrels of oil a day and getting them to market. Which brings us almost all the way back to where we began.

Cushing, Oklahoma, ran out of oil of its own (in commercially viable quantities) long ago, but has become the center of America’s crude oil distribution. For a long time this was more of an abstraction than anything else. Cushing was the place where West Texas Intermediate crude oil (this is the grade of American oil traded on the commodity market) was blended together and officially delivered. For most of its life Cushing sent Oklahoman, Texan, and Louisianan oil north to refineries in the Midwest, but now there’s so much oil coming down from Canada and North Dakota that Cushing’s traditional delivery points are full. Cushing is trying to retool itself to reverse the flow of oil and send northern oil down to refineries on the Gulf Coast. But they need new pipelines (such as the notorious Keystone XL), and the process of building them has been slow. Until they’re finished there is a bit of a traffic jam in Cushing, causing a miniature glut of oil in the region that has actually driven the price of gasoline below what it should be, a fate reminiscent of the Nellie Johnstone No. 1 submerging Oklahoma’s nascent oil market.

Surely you’ve noticed that price of unleaded petrol in Tulsa has dipped below $3 a gallon.

Surely you’ve noticed that the price of unleaded petrol in Tulsa has dipped below $3 a gallon. That’s not necessarily good news for the Sooner state. The cycle of boom and bust may be about to tilt back into bust territory.

But that would only be temporary. The rush to develop new fields as gas prices rise and fall has long driven the oil and gas industry in Oklahoma, but perhaps there’s another longer cycle operating beneath that. The most optimistic projections of the North American oil and gas sector suggest the United States could become a net exporter again by 2020. If this is true and Cushing is a harbinger and Oklahoma can maintain its position as the center of America’s oil industry, perhaps we’ll see another mad rush bloom of construction blossom in the Sooner state. Let’s just hope the dire prognostications of climate change scientists don’t come true—otherwise the second spurt of Oklahoma architecture could have to take place underwater.

 


Originally published in This Land, Vol. 4 Issue 23.