History

2021

August 2021

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Visit https://www.census.gov/history every month for the latest Census History Home Page!

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U.S. Census Bureau History: The Oil Industry

On August 27, 1859, the "Drake Well"—an oil well drilled in Titusville, PA—reached its maximum depth of
nearly 70 feet. The bore hole soon filled with oil making it the first successful well drilled specifically for oil.

The strike was the beginning an oil boom in Venango County, PA. However, as speculators drilled more wells,
the price of oil quickly dropped. The Drake Well was never profitable, despite producing 12–20 barrels (504 to
840 gallons) of crude oil each day.

Photo courtesy of the Library of Congress.

On August 27, 1859, Edwin Drake and the Seneca Oil Company completed drilling the first commercial oil well in the United States. Drilled to a depth of nearly 70 feet in Titusville, PA, the "Drake Well" produced 12 to 20 barrels (504 to 840 gallons) of crude oil every day that was destined to fuel the nation's oil lamps. The Drake Well stopped producing in 1861, but it triggered an interest in exploration and investment that helped the United States become the world-leading oil producer, supplying 20 percent of the world's petroleum in 2020.

The area along Oil Creek in Pennsylvania's Venango and Crawford Counties had been known for oil naturally seeping from the ground for hundreds of years. Nearby water wells occasionally became contaminated by oil. After a sample of oil collected from the area proved to be of high quality, George Bissell and Jonathan Eveleth purchased a farm along the creek in the hope of finding a sufficient quantity of oil that could be refined into kerosene. First patented as "pararffine oil" in 1852 and improved as a lighting fuel in 1854, Bissell and Eveleth hoped to produce kerosene cheaply enough to replace the increasingly scarce whale oil being used in the nation's oil lamps. In 1858, investor Edwin Drake joined Bissell and Eveleth in the newly formed Seneca Oil Company as head of its drilling operation.

In Spring 1858, Drake constructed a steam-powered drill on the company's Titusville, PA, property. First, he rammed a drillhead through the soil until encountering bedrock. Then he began the laborious and slow task of drilling through the bedrock. Months passed with little success. Although his Seneca Oil colleagues had given up on the well by early 1859, Drake financed the drilling operation on his own, lining the well with cast iron pipe to prevent the walls from collapsing. By the end of the day on August 27, 1859, Drake's drill had bored a well shaft reaching a depth of nearly 70 feet. Contrary to popular imagery showing later oil wells spewing a fountain of oil and water into the air, Drake's well showed little evidence of oil when he left for the day. Since the region's oil is found near the surface and is under little pressure, the oil slowly seeped into the well overnight from fissures in the bedrock. When Drake returned the next day, he found the hole had filled with water, but was capped with a layer of thick petroleum.

After constructing steam pumps and holding tanks, the Seneca Oil Company pumped as many as 840 gallons of oil a day from the well until it "went dry" in 1861. Despite being the nation's first commercial oil well, the Drake Well failed to make a profit for the Seneca Oil Company. News of the well and the region's deposits of near-surface oil led speculators to "rush" into the Oil Creek Valley, where they frantically drilled hundreds of oil wells that were producing thousands of barrels of oil by the end of 1859. The sudden glut of Pennsylvania petroleum caused the price of crude oil to plummet from $16 a barrel in 1859 to just 49 cents by 1861—a price collapse equivalent to a drop from $518 to $16 in 2021 dollars!

Despite the fortunes made during the 1859 Pennsylvania and later oil rushes, Edwin Drake—the "father" of the American oil industry—did not enjoy the wealth that oil brought to so many of his peers. Drake was destitute within years of digging the Titusville well due to failed stock investments and oil well speculation. Oil industry friends provided financial assistance to his family until the state of Pennsylvania awarded him a $1,500 annuity for his service to the state's oil industry in 1873. He died in Bethlehem, PA, on November 9, 1880.

After the Seneca Oil Company abandoned the Drake Well in 1861, Titusville oilman David Emery purchased the site in 1889. He drilled the well deeper so it produced a few gallons of oil each day that he sold in souvenir bottles. A stone monument was erected at the well in 1914. In 1931, the American Petroleum Institute donated money to establish a library and museum at the site, which became the Drake Well State Park in 1934. Designated a National Historic Landmark in 1966, the Drake Well Museum and Park and adjacent Oil Creek State Park feature a replica of Drake's oil derrick and steam engine along with exhibits that tell the stories of the nation's first oil well and Pennsylvania's oil industry.

Since Edwin Drake drilled the nation's first well in Titusville, PA, in 1859, the American oil industry has grown to support 10.3 million jobs in the United States and accounts for nearly 8 percent of our nation's Gross Domestic Product. You can learn more about the history of oil and its impact on our nation using census data and records. For example:

• In 1850—9 years before Edwin Drake and the Seneca Oil Company struck oil—the town of Titusville, PA, had a population of 243. The population skyrocketed as Pennsylvania's oil industry boomed, reaching 8,639 in 1870. Today, Titusville's population is estimated to be 5,264.
• A number of American counties, cities, and towns are named for the "black gold" and natural gas that lies under their residents' feet. Some examples include: Petroleum County, MT; Oildale, CA; Oil City, PA; Oilton, OK; Gas City, IN; Oil Springs, KY; Gasport, NY; Petrolia, TX; and Petroleum Center in Venango County, PA.
• The fate of many American cities is closely tied to the oil industry. For example, Midland and Odessa, TX, are two of the nation's fastest growing cities because of their ties to the oil industry. Following the 1923 discovery of oil in Texas' Permian Basin, the population of Midland, TX, grew from 1,795 in 1920 to 62,625 in 1960. Today, the city's population numbers 138,549. Nearby Odessa, TX, grew from 2,407 in 1930 to 80,338 in 1960. Odessa is home to 119,702 today. In the northern United States, the population of Williston, ND, has grown from 12,579 in 2000 to 27,250 today, thanks to shale oil drilling in the Williston Basin. To the west, Bakersfield, CA's population grew from 801 in 1880 to 12,727 in 1910, thanks to the discovery of the Kern River Oil Field in 1899. Today, 377,917 call Bakersfield home, thanks to the region's robust petroleum and agriculture sectors.
• On February 25, 1919, Oregon passed the first per-gallon gas tax in the United States. The 1 cent per-gallon tax helped fund road projects in the state, including the Pacific Highway and Columbia River Highway. By 1929 all 48 states had imposed 1 to 3 cent taxes at the pump, and 3 years later, the Revenue Act of 1932 added a federal tax on gasoline. Today, American drivers pay federal and state taxes averaging 30.06 cents per gallon of gasoline (31.92 cents per gallon of diesel fuel) to fund infrastructure improvements including construction of more than 48,000 miles of the nation's interstate highway system. Recent projects funded by the tax on gasoline include newly completed segments of Interstate 49 between Shreveport, LA, and Doddridge, Miller County, AR; the Governor Mario M. Cuomo Bridge spanning the Hudson River between South Nyack and Tarrytown, NY; the Ted Williams Tunnel in Boston, MA; and resurfacing of the Weston-Elgin Highway through Umatilla County, OR.
• The U.S. Energy Information Agency reports that 43 percent of the nation's oil production came from Texas in 2020. North Dakota was a distant second supplying 10.4 percent, and New Mexico supplied 9.2 percent. In December 2020, average daily production from oil wells in Texas topped 3.5 million barrels. In total, the state's wells produced more than 109 million barrels in December 2020, with Midland and Martin Counties, accounting for approximately 15.5 and 10.3 million barrels of that monthly total.
• In 2020, U.S. dry natural gas production was about 33.4 trillion cubic feet per year, or 91.4 billion cubic feet per day. Texas and Pennsylvania lead the nation in natural gas production, with 23.9 and 20 percent, respectively, of the nation's total production in 2019. In Texas, Reeves and Midland Counties lead the state for their natural gas-producing wells. Pennsylvania's natural gas production is concentrated in Washington, Greene, and Susquehanna Counties.
• The exploration, refining, transportation infrastructure, and sale of oil and refined petroleum products provides jobs for thousands of Americans in every state and territory. For example, the 2017 Economic Census found that the 2,459 establishments in the Drilling oil and gas wells industry (NAICS 213111) employed 70,405 people. The nation's 148 petroleum refining establishments (NAICS 324110) employed 66,700; the 2,226 establishments engaged in the oil and gas pipeline and related structures construction industry (NAICS 237120) employed 211,334; and 98,788 gasoline stations with convenience stores (NAICS 447110) and 16,581 gasoline stations without convenience stores (NAICS 447190) employed a combined 942,735 people.
• Texas has dominated the nation's oil industry since oil was first discovered at the Spindletop Oil Field near Beaumont, TX, on January 10, 1901. Today, the state produces 43 percent of the nation's total crude oil. The impact of the oil industry on the state's economy is enormous. In 2019, Texas was home to 804 Drilling oil and gas wells industry establishments, that employed 32,986 people during the pay period that included March 12, and an annual payroll exceeding $3.4 billion according to the 2019 County Business Patterns series. By comparison, Oklahoma's Drilling oil and gas wells industry was a distant second with 220 establishments that employed 8,545 people earning about $655.4 million annually.
• In 2019, Americans consumed 20.64 million barrels of petroleum daily, with much of that fueling transportation to and from work. In 2019, the American Community Survey estimated that 84.8 percent of workers aged 16 and older took a car, truck, or van to work, and that 75.9 percent drove alone. Just 8.9 percent of workers carpooled, 5 percent used public transportation (excluding taxicabs), and 3.1 percent walked or biked to work. In 2019, 14.9 percent of Americans reported their commute was 15 to 19 minutes, followed by 20 to 24 minutes (14.1 percent), and 30 to 34 minutes (13.9 percent). Travel time to work topped 1 hour for 9.8 percent of commuters in 2019.
• The petroleum industry relies on rotary drill operators to explore and extract oil and gas from the ground. In May 2018, the Bureau of Labor Statistics reported that Houston, The Woodlands, and Sugar Land metropolitan areas in Texas led the nation with 2,740 people employed as rotary drill operators, earning an annual mean wage of $58,560. Oklahoma City, OK, employed 1,380 drillers earning a mean wage of $66,950, and Bakersfield, CA, employed 870 earning an annual mean wage of $61,410. Nationwide, the American Community Survey estimated that 20,059 people worked as derrick, rotary drill, and service unit operators in the oil and gas industry in 2019.

The "Lone Star State" has led the nation for its oil production since the January 10, 1901, discovery of oil at the Spindletop Oil Field near
Beaumont, TX. Texas accounts for more than 40 percent of total crude oil production in the United States. According to Texas' Permian Basin
Petroleum Association , the state's oil and gas industry directly provided over 400,000 jobs and supplied $98.9 billion in state and local
taxes and royalties between 2007 and 2015.

Photo courtesy of the Library of Congress.

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Did you know?

The deepest oil well in the United States was drilled near Dill City, OK.

Between October 1972 and April 1974, the "Bertha Rogers #1" well reached a depth of 31,441 feet. Oil was not found, but the well produced natural gas until 1997.

Bertha Rogers #1 was the "World's Deepest Hole" until 1979 when researchers drilled the 40,230 foot deep Kola Superdeep Borehole near Murmansk, Russia.

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Oil Consumption

According to the U.S. Energy Information Administration the United States consumes more oil than any other country—20.5 percent of the world's supply— followed by China (13.9 percent), India (4.8 percent), Japan (3.8 percent), and Russia (3.6 percent).

In 2020, the 331.4 million people living in the United States consumed more than 18 million barrels of petroleum every day. This included more than 8 million barrels of gasoline, 3.7 million barrels of diesel fuel and heating oil, and nearly 3.2 million barrels of gas liquids like propane and butane.

One barrel of oil equals 42 gallons, so Americans consumed 760 million gallons of oil daily—almost 2 gallons per person every day in 2020. If poured into the 68,000 seat Astrodome in Houston, TX, that volume of oil would fill the stadium more than twice daily, or fill the Lake Havasu basin (between San Bernadino County, CA, and La Paz County, AZ) in 8 months!

Photo courtesy of the Texas Historical Commission.

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For the Record

Born in Richford, NY, in 1839, John D. Rockefeller dominated the nation's oil industry in the late 19th and early 20th centuries.

Rockefeller and his brother William began operating an oil refinery in Cleveland, OH, in 1866. Within 2 years, it was the largest refinery in the world. In 1870, the Rockefellers founded Standard Oil of Ohio, and began buying competitors. Within a decade, Standard Oil controlled 90 percent of the nation's oil refining capacity.

In 1911, the U.S. Supreme Court upheld a lower court's ruling that Standard Oil operated in violation of the Sherman Antitrust Act. The company was broken up into smaller companies, many of which remain familiar to motorists today.

Rockefeller donated part of his oil fortune to humanitarian causes through the Rockefeller Foundation that he founded in 1913. He died in May 1937, at his winter home in Ormond Beach, FL.

Photo courtesy of the Smithsonian Institution.

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Visit https://www.census.gov/history every month for the latest Census History Home Page!