A History of Oil

From: National Algae Association www.nationalalgaeassociation.com 

Let’s step back for a moment and track the creation of the petroleum industry.   For hundreds of years, people had known about oil seeps in western Pennsylvania. There is strong evidence that Native Americans were harvesting the oil for medicinal purposes at least as far back as 1410 AD by digging small pits around active seeps and lining them with wood, and European settlers skimmed the oil from the seeps and used the petroleum for lamp fuel and machinery lubrication.

In the early 1850's, George Bissell, a New York lawyer, had a plan to try to produce this oil commercially. He hired Benjamin Silliman Jr., a chemist at Yale University, and one of America's leading chemists, to analyze the properties of the "Seneca Oil" as an illuminant. He determined that the oil could be distilled into several fractions, one of which was a very high quality illuminant. With this information, Bissell was able to get some financial backing, including James Townsend, who was the president of a bank in New Haven, Connecticut, and formed "Pennsylvania Rock Oil Company".  They hoped that "rock oil" could be recovered from the ground in large enough quantities to be used commercially as a fuel for lamps. What made Bissell a visionary was that he tried to extract the rock oil from the ground by drilling, using the same techniques as had been used in salt wells.

The most important oil well ever drilled was in northwestern Pennsylvania; on August 27, 1859, “Colonel” Edwin Drake and “Uncle Billy” Smith drilled to a depth of 21.18 m (69 1/2 feet) (the “Drake Well”). It was not until the next morning, when Smith, the driller, noticed oil floating in the hole they had pulled the drilling tools from the night before. By today's standards, it was a pretty unremarkable hole, probably producing 20 barrels or less of oil per day.  But it was one of the first successful oil wells drilled for the sole purpose of finding oil   It started the international search for petroleum, and in many ways changed the way we live.

Although most people associate oil’s early beginnings with Texas, by the late 1800's, Texas had only produced minor amounts of oil, starting with a well in 1866 drilled by Lyne T. Barrett near Nacogdoches. This field, known as "Oil Springs", was exploited again in 1888, when a crew of drillers from Pennsylvania had a well come in at 250 - 300 barrels per day.  This find attracted other oil companies, and it would only be a matter of time before the huge, untapped potential of the underground reservoirs was discovered.

Corsicana, the first big producing field in eastern Texas, like so many others in the early days of oil, was discovered when local businessmen drilled deep wells looking for water. Amazingly, the first drillers in this area regarded the oil zones they reached as annoying nuisances, and often drilled past these zones to get to the water they were seeking.  H.G.Damon and Ralph Beaton had a bit more foresight, formed a company, and bought in Pennsylvania oilman John Galey. The team drilled marginally successful oil wells (25 barrels per day or less) in Corsicana in 1896, and Galey and his partner, James Guffey, sold their interest in the company and headed back east, convinced that there was little future in Texas oil.   Locals, however, proved them wrong, and by the end of the year 1900, more than 2 million barrels of oil had been produced in the Corsicana field alone. Pennsylvania had been the most oil-productive state in the country so this was not large by Pennsylvania standards, but it certainly pointed towards the possibilities of something bigger.

Patillo Higgins, a one-armed mechanic and self-taught geologist, was one of the few at the time who believed that, in the future, modern industry would switch from coal to oil. But where could we get all that oil? He believed it lay beneath his feet at Spindletop, a hill that had been formed by a giant underground dome of salt as it moved slowly towards the surface. As it crept, it pushed the earth that was in its path higher and higher.

Higgins had a feeling that drilling a well on top of this salt dome (and others like it) would produce oil, and lots of it. In an attempt to turn his dream into a reality, Higgins organized the Gladys City Oil, Gas, and Manufacturing Company in 1892. Years of frustration followed, with most members of the petroleum and geologic communities proclaiming Higgins's ideas to be silly nonsense. Nearing the end of his rope, Higgins ran an advertisement in a local newspaper, and one man, Captain Anthony F. Lucas, replied. Lucas had training as an engineer and experience as a salt miner in Louisiana. But the first wells drilled for Higgins were failures, and the money ran out.  The Texas press, as well as local geologists, had been very skeptical of Higgins for years, and no one in the area believed that a salt dome structure could produce oil. So Lucas turned to Guffey and Galey, who had left the area 3 years earlier, unconvinced of the potential of Texas oil. Something made them change their minds, and in 1900, John Galey returned to Beaumont, Texas to survey the area. He picked the spot, and the drilling began on October 27, 1900.

Drilling was difficult at first. Lucas and his men ran into the same problems that other drillers had faced along the Texas coastal plain. There is little in the way of rock at the surface; instead, they had to drill through several hundred feet of sand. This made the hole prone to cave in on them. To help solve this problem, one of Lucas' drillers, Curt Hamill, came up with a revolutionary solution - instead of pumping water down the hole to flush out the cuttings produced by the action of the drill, he used mud. This proved to help not only in retrieving the cuttings, but just as importantly, it was found that the mud stuck to the sides of the hole and kept it from caving in. It was found there were even more benefits, and mud has been used in almost every drillhole around the world ever since!  The exhausted crew shut down for a week over the Christmas holiday, 1900, having reached a depth of 880 feet.

When they arrived back on site on New Year's Day, 1901, they were energized, and within a week drilled down to a depth of 1,020 feet. After pulling the drill out to change some equipment, they started to lower it back in. The day was January 10, 1901 - the day the modern oil industry was born on a hill in southeastern Texas. After lowering the equipment back into the open hole to a depth of about 700 feet, a full 17 hours since the last "drilling" had actually occurred, mud started bubbling back up the hole. Seconds later, the drill pipe shot out of the ground with great force, and then...nothing happened. 

After a short time, the frustrated and confused drillers set about to clean up the mess and see if anything could be salvaged. All of a sudden, a noise like a cannon shot came from the hole, and mud came shooting out of the ground like a rocket. Within a few seconds, natural gas, then oil followed. The oil "gusher" - greenish-black in color, doubled the size of the drilling derrick, rising to a height of more than 150 feet (about 50 meters). This was more oil than had ever been seen anywhere in the entire world! Captain Lucas had been hopeful that this well might produce 5 barrels per day. In fact, this well, "Lucas 1", flowed at an initial rate of nearly 100,000 barrels per day, more than all of the other producing wells in the United States COMBINED!  Lucas 1 was not brought under control for 9 days, losing one million barrels of oil in the process.

A device now called a "Christmas Tree" was invented on the spot to control the flow of oil.  Christmas trees are now commonplace in the industry to prevent just such an occurrence.  Because of the huge amount of oil which glutted the market after this discovery, the price of oil dropped from $2 to $.03 per barrel.

Before the end of the year, Lucas's well was joined by over 200 other wells, all fighting for space on top of Spindletop. These wells were owned by more than 100 different oil companies. The gusher at Spindletop was responsible for creating several companies that were to become giants in the oil industry, including Gulf Oil, Amoco and Humble Oil Company, which would later become an arm of Exxon.

The true potential of oil was being realized - the vast resources that were, in fact, there, and the vast potential that remained. Before Spindletop, oil was used many for lamps and lubrication - after Spindletop, petroleum would be used as a major fuel for such new inventions as the airplane and automobile. Ships and trains that had previously run on the power of coal, switched to oil, becoming convinced that there would be no shortage of the fuel anytime soon. As an example, the Santa Fe Railroad went from only one oil-driven locomotive in 1901 to two hundred and twenty-seven in 1905.

I shared this history, compliments of the American Petroleum Institute, because I think of ‘algaepreneurs’ as today’s wildcatters.  An attorney, a banker, and a one-armed, self-taught geologist were all at the heart of the creation of the oil industry.    At the start of the oil industry, wildcatters at Spindletop took risk, worked with what they had, and developed what they needed in the field.   Look at all the changes that have taken place in the oil industry since January 10, 1901. Today’s algaepreneurs are the new “wildcatters” searching for green crude, and I believe that we are already pointed towards the greater possibilities of something bigger from algae than just oil. Think of the areas we have already identified: food, nutraceuticals, pharmaceuticals, cosmetics, and organic fertilizer, to name a few.

More than 50 years have already been dedicated to researching algae.  Many changes and improvements will occur in the algae industry over the next 50 years but algae producers need to take the same risk that Drake, Smith and the other oil pioneers took. NAA encourages algae growers, harvesting, extraction equipment manufacturers, process engineers and algae researchers to work together to build commercial-scale systems and, as many of you know, I am working tirelessly to help make synergies happen.   We need to continue to break down the barriers and collaborate. Algae production companies will benefit from lower costs and realizing economies of scale. Algae researchers will benefit from working on commercial-scale algae systems, which has yet to be done.   It’s a win-win! 

Things have changed since over the years the way we drill for oil.  Research and new enhancements to algae equipment will continue to take place in the algae industry.   Algaepreneurs need to build the first raceway ponds, horizontal and vertical closed-loop photobioreactors, harvesting and extraction systems on 100 acres so algae producers and researchers can work side by side. I personally would rather see it done in the United States than in any other country.

The general consensus is that, while the basic technical ability to transform algae into fuels and other products has been well established, the ability to do so viably from an economic perspective and at the necessary scale is still extremely problematic.  I don’t necessarily agree. I think the problems lie with the fact that everyone is trying to improve something, and to come out with the biggest and best. Everyone is looking at personal profit and thinks they are protected because they file patent applications and have visitors sign NDAs, but the reality of it is that an international award-winning pond system was created by a 15-year-old based on what he found on the internet, and I have seen more commercial-scale closed-loop photobioreactors than you can imagine – built from hardware store components. The only ones who have benefited from the patent applications so far are the patent attorneys, because, until this industry is up and going, the patents are not worth the paper they are written on!

I am issuing a challenge for the year 2010:  Build out a 100 acre turnkey algae production facility (growing, harvesting and extraction) without any local, state or federal grant funds.

When this all started in 1859, nobody had all of the answers.  150 years later, the oil industry is still looking for answers.  A 100 acre turn-key commercial-scale algae production facility will allow algae producers to look at real commercial algae production and operations as well as economies of scale issues.  It will give algae researchers a much better understanding of commercial-scale algae production issues to work on as opposed to small raceway ponds and desk-top lab photobioreactors.  It is, at this point, useless to continue to fund algae research without seriously funding commercial-scale algae production farms.   As some have already learned, intellectual properties have no practical use if there is not an industry to use them.  In order to create any value in existing algae technologies, we must have commercial-scale algae production facilities that can use them!

Commercial-scale algae production is key to our industry and is one solution that helps to reduce dependence on foreign oil, to create new jobs and reduce CO2 emissions.  The NAA challenges the algae industry to build a 100 acre commercial-scale algae production plant without any local, state or federal grants - this will be the true test of algae production farming and algaepreneurism at its finest!

I would like to see the first 50 acres of production with proven benchmarked results - totally designed, developed and put into production without a single dollar of government money.  The next 50 acres can be improved by making minor changes based on what was learned from the first 50 acres. I know it can be done, and you know it can be done – it’s time to do it!

Source: National Algae Association, 4747 Research Forest Drive #180-175, The Woodlands, TX  77381

www.nationalalgaeassociation.com