Texas Almanac, 1990-1991 Page: 60
611 p. : col. ill., maps, ports. ; 23 cm.View a full description of this book.
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60 TEXAS ALMANAC 1990-1991
The Santa Rita No. 1 blew in on May 28, 1923, to become
the first oil well on lands owned by the University of
Texas. The university is now one of the richest in the
world.
panies, based on the belief that a healthy petroleum
industry is dependent on the risk-taking independents.
Nationally, the TRC has devoted itself to advancing the
economy of Texas. From 1935 to the 1970s, national oil
policy was largely left to the states, and since Texas pos-
sessed just under half of the nation's petroleum re-
serves, the TRC was the most influential of the state
petroleum-regulating agencies.
Because of increasing congestion in transportation
and storage facilities, oil producers meeting in July 1919
requested a month-long shutdown of all wells. The com-
mission ordered a five-day shutdown and issued its first
proration order regulating production in the Burkbur-
nett Field because of inadequate pipeline facilities.
Each well was limited to producing the volume of
crude that its pipeline would accept from it. In Septem-
ber 1921, the Keathley No. 1 came in about four miles
east of Breckenridge, and some of Stephens County's cit-
izens were not so sure the oil boom was all blessing.
Within a few days, the well was flowing 60 million feet of
gas a day and spraying oil and salt water over every-
thing for two-and-a-half miles to the leeward. It took two
weeks to control the well.
Then came the inevitable: In 1921, the crash started.
The all-out, no-holds-barred oil boom turned into a post-
war depression exacerbated by overproduction. The
price of oil fell to one dollar a barrel within a three-
month period, and banks were closing all over West Cen-
tral Texas.
But there were other developments in the petroleum
industry. The first permit in Texas for construction of a
carbon-black plant was issued in February 1923 in Ste-
phens County. Carbon black is produced by the
incomplete burning of a natural gas flame against a me-
tallic surface. The powder thus produced is scraped into
hoppers and is used in making ink and rubber, princi-
pally for automobile tires. Between 1924 and 1929, the
plant produced 125,000 pounds of the substance daily.
Seven carbon-black plants were operating in Stephens
County by 1929, plus two in Eastland County and one in
Hutchinson County. By 1931, Texas was producing 75 per-
cent of the total U.S. output of carbon black.
A surge in pipeline construction came in 1924, includ-
ing the first pipelines to cover long distances, easing
somewhat the congestion in transportation and storage
facilities. The first pipeline from West Texas to the Gulf
Coast was completed in 1925. Several shorter lines were
installed between 1927 and 1929. By 1938, West CentralTexas was crisscrossed by pipelines and dotted with refi-
neries. The legendary Santa Rita No. 1, the discovery
well of the Big Lake Field, blew in on May 28, 1923, in
Reagan County. It was drilled by Frank Pickerell of Tex-
on Oil and Land Company on University Lands. The well
was named for the patron saint of the impossible and
hopeless at the request of a group of Catholic women
investors from New York. Within a year, there were 17
producing wells in the Big Lake Field, and the Universi-
ty of Texas was well on its way to becoming one of the
wealthiest schools in the nation. This boon had its begin-
ning in Mirabeau B. Lamar's strong support of public
education when he was president of the Republic of Tex-
as. He urged the Texas Congress to appropriate public
domain to support education, and in 1839, the Congress
called for 50 leagues (221,400 acres) to be set aside for the
endowment of a university. In 1858, the figure was in-
creased to 1 million acres, and it was specified that it had
to be good agricultural land. However, the framers of
the Constitution of 1876 saw no harm in shifting the Uni-
versity Lands from valuable agricultural land into the
arid plains, since no university had yet been established.
The first million acres were located in Schleicher, Crock-
ett, Terrell, Pecos, Upton, Reagan and Irion counties. In
1883, the legislature set aside a second million acres in
Andrews, Crane, Culberson, Dawson, Ector, El Paso,
Gaines, Hudspeth, Loving, Martin, Ward and Winkler
counties. When the University of Texas opened in 1883, it
was backed by an endowment of a vast amount of lands
of extremely dubious value. Around the turn of the cen-
tury, the University's Bureau of Economic Geology
began to investigate the possibility of finding oil and gas
on university lands. In 1916, at a time when most geolog-
ists did not believe there was oil in the Permian Basin,
the University's Dr. Johan A. Udden reported that it was
likely that oil could be found lying atop the underground
fold of rock that runs from the Marathon area through
Pecos County and into Upton and Reagan counties. He
was right. As of April 30, 1981, the cumulative income re-
alized by the University of Texas from its 2 million acres
of arid plains stood at almost $1.5 trillion dollars.
The discovery well for Crockett County was brought
in in May 1925, 17 miles south of the Big Lake Field, fol-
lowed by Loving County's discovery well in September
of that year. Neither was big enough to spawn great ur-
ban development. But Upton County's discovery, also in
September 1925, created a boom town in McCamey. At
its height, in 1927 and 1928, McCamey's population was
between 10,000 and 12,000. Many residents were housed
in floored tents. Drinking water came in tank cars from
Big Lake or Alpine.
The Central West Texas Field discoveries were
made in quick succession in Howard, Crane and Glass-
cock counties in 1925, 1926 and 1927, and Big Spring be-
came a city, developing into the commercial center for
the exploration in Howard and Glasscock counties. The
Cosden Refinery, established in Big Spring in August
1929, became the largest petroleum-processing plant in
the Permian Basin.
Winkler County was the scene of the discovery of the
Hendricks Field in July 1926. Two years later, Hendricks
had overshadowed all the other West Texas fields, pro-
ducing more than 62 million barrels in 1928 alone, luring
speculators by the dozens. The town of Wink grew from a
handful of people to about 10,000.
Traditionally, oil men produced as much oil as they
could as fast as possible. A constant problem of more oil
than the market demanded kept prices down. There was
some recognition that production should be reduced, but
working out the details to please both major oil compa-
nies and small producers was almost impossible. In 1929,
the American Petroleum Institute attempted to set pro-
duction quotas for all oil-producing states, but the feder-
al government would not promise not to prosecute on
antitrust grounds. The Texas Railroad Commission at
that time regulated production in only a small number of
fields. But with the oil glut getting worse, the legislature
passed a law making all crude storage facilities and
pipelines subject to the commission's regulation. The
TRC issued its first statewide proration order in August
1930.
But the problem was not solved. Chaos hit the petro-
leum industry on Oct. 3, 1930, when C.M. "Dad" Joiner
brought in the Daisy Bradford No. 3 in Rusk County in
East Texas. Within a year, production from the East
Texas Field was more than a million barrels a day. Oil
prices plummeted. And the situation was exacerbated by
the Great Depression. Desperate East Texas operators
tried to promote a voluntary shutdown. Instead,
production increased so dramatically that Gov. Ross
Sterling declared martial law to shut down production
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Kingston, Mike. Texas Almanac, 1990-1991, book, 1989; Dallas, Texas. (https://texashistory.unt.edu/ark:/67531/metapth162512/m1/62/: accessed March 28, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting Texas State Historical Association.