WEBVTT
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One uncontrolled blowout in Texas didn't just make oil history.
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It created Exxon, Chevron, Houston, and probably your job.
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Welcome back to Crude Logic.
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Whether you work in it, invest in it, or just wonder how the oil and gas industry affects your everyday life, you're in the right place.
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Let's go to the market minute.
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All right.
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Are we ready?
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Yeah, because we over here have been waiting.
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Yeah.
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Wait for your lazy ass to get out of bed.
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Nope, just to do the market report.
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In today's market minute, West Texas crude is at 6863.
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Brent is at 7203, and Henry Hub Natural Gas is at 321.
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Boy, have I got a story for you that you probably already know as well as the rest of the industry, but I think it's an important story to talk about because not everybody's going to know this because who cares about history these days?
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Anybody under 35, probably.
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This rig or well was located in Beaumont, Texas.
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You probably already know what I'm talking about.
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The drill site was at, this is going to be a dead giveaway, Spindletop Hill in Beaumont, Texas.
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So there were investors.
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They were skeptical of drilling with rotary tools.
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Okay.
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So the uh the moment everything changed was on January 10th, 1901.
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The drill hits a pressurized reservoir.
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All right.
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Oil shoots well over a hundred feet into the air.
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So for anybody who can't really put together what a hundred feet is, it's a 10-story building, if that'll help you out any.
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Which is quite high.
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So oil is shooting out of this sucker.
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The flow rate was unimaginable at this time.
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The uh oil flooding surrounded land.
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It was uh basically a boomtown explosion in Beaumont.
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This this kind of kicked off uh a huge drilling explosion in this area.
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The uh land speculation was a was a frenzy.
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The there were new companies, and some of these companies you guys will know, there were new companies forming overnight.
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So this birthed our industry.
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This this uh well that occurred in Spindletop Hill in Beaumont, Texas, literally was the beginning of all of our jobs.
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So if you haven't heard the story, this isn't going to be a super deep dive into the story by any means, but if you haven't heard the story, this is an important one to know.
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This is where the roots came from.
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This was not the beginning of the oil field, but it was the beginning of the modern oil field.
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On Beaumont Hill, this this hill was formed uh through salt rising to the surface.
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The spindletop well in its first year produced 3.5 million barrels of oil climbing to s climbing to 17.4 million by its second year.
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Texaco, Gulf, Mobile, Humble, and Sun Oil can all trace their roots back to the Big Hill, as they affectionately refer to it.
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A consequence of that well was that uh at the time, a barrel of oil cost two dollars.
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When the spindletop well blew out and became a thing, oil per barrel dropped down to 25 cents a barrel.
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So that is a huge, a massive drop.
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Now, obviously, it's you know, it's business, right?
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It's uh supply and demand.
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Supply went way up all of a sudden.
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Fishtail drilling bits gave way to rotary bits.
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Petroleum engineer pioneers in California and Texas led the way for oil-producing states.
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Service companies for the exploration and production were beginning to converge on Bakersfield, Houston, and the Oklahoma oil capital of Tulsa.
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It dropped oil prices dramatically.
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Whenever these oil prices drop, like you got this big influx of oil, and they were the investors probably invested.
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Um of course they did.
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But when the when the investors invested this money, were they investing at the$2 per barrel price?
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I feel like everybody's trying to find the greedy angle to make a quicker or larger buck, but maybe I would have kept my mouth shut about spindlesop and built some holding tanks and just let it ride for a while.
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Some of them may have been really eager to get some some smart money put into these wells.
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You know, it's like, well, okay, it produces at$2 a barrel, but they probably also didn't expect it to produce in its second year 17 million barrels.
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Right.
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That decline curved kind of backwards.
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So I mean, even though the price went down, those particular investors were setting on what?
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I don't know, uh a thousand X.
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You said it went to 25 cents a barrel?
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Yes, it went from two dollars to twenty-five cents a barrel.
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That's four million dollars, four point two million for the second year.
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I'm not sure what they invested, but I don't think a wooden rig cost that much.
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No, I'm sure that they all made a ton of money.
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I don't think any of them had any idea that this was going to that it was going to produce this much.
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So No, of course not.
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They probably put in what I wonder that's what I'd like to know is what they put in.
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Well, they put in$4,000 and, you know, it may be it doesn't say how much they invested, but I guess it's all relative, right?
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If you invest at a$2 per barrel price and you expect it to produce a thousand barrels or a hundred thousand barrels, or whatever you have calculated it to do, but then it does in the millions, then I don't think you're too upset, right?
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So this was a massive development.
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I believe it was 10 days.
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I can't find it in this article, but the amount of time that it took it, approximately 850,000 barrels blew out of the well before they could even get it under control.
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So literally almost a million barrels were blowing out of this thing for days.
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And if it was on a hill, you know where things go.
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They go downhill.
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So, you know, there was like crude oil flooding the surface until they could get this under control.
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So the well was originally supposed to cost$20,000, and he had a$10,000 investment in it initially, and then the cost quickly soared to$50,000.
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Um one well representing an initial investment of just under$10,000 was sold later for$1.2 million.
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So the the population of Beaumont went from$10,000 to$50,000 in like a year.
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Yeah, like a major in influx of uh economic boom, and you know, I mean buildings were probably going up like crazy.
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Anthony Lucas.
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He was a Croatian mining engineer, so he was interested in the spindletop hill.
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He said that uh this mound attracted my attention on account of its contour, which indicated possibilities for an incipient dome below.
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He liked the shape of the hill.
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He thought something was there.
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That's it.
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So he contacted the famed Pennsylvania oilman John Gailey and his partners James Guffey, who had drilled marginally successful wells in nearby Corsicana in 1896.
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Gailey and Guffey returned to Pennsylvania unconvinced that there was a future for oil in Texas.
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Wow, beyond their years.
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Uh Gay and then it says Gailey would have a change of heart.
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So three years later, the uh the veteran independent producer returned to Beaumont to survey the area, picked a spot on Spindletop Hill, and began the drilling on October 27, 1900.
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The drillers had to find ways to drill through several hundred feet of sand, which berthed mud.
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To help solve the problem, one of uh Lucas's drillers, Kurt Hamill, came up with a solution that was revolutionary at the time.
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I don't know about you, but before I got into the oil and gas industry, I had no idea that they circulated mud through the system to clean out the you know, well bores.
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Mud is an integral part of what we do now in order to be able to bring cuttings out of the hole, uh, to be able to keep gas pressure down.
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They were having to drill through a lot of sand.
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It's gotta be like a water hose.
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That's what I was looking at the the picture of the bit and thinking, how do they circulate through that?
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Like the bit looks like it's it didn't even look like it had a threaded end to screw into the bottom of pipe.
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It looks like it was a peg with a cotter pin, you know.
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So it went into like a Did it have jets on it?
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No, and there was no jets on the on the one that the original one that they used, so it had to be they must have just poured water down in the hole directly.
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Yeah, that's that's all I can think of, too.
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And it couldn't have been pressurized or anything, so no wonder they only got 1200 feet.
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Surprised they go that far.
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They just let the cuttings float to the surface or what?
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Instead of pumping the water down the hole to flush out the cuttings produced by the action of the drill, Hamel used mud.
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This helped in retrieving the well cuttings.
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The first iteration of drilling fluid mud.
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I mean, he he basically created a mud that was thicker viscosity than water, like we do today.
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But he just didn't there wasn't a science behind it then.
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He was just winging it.
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Yeah, I think I think that they were literally because they were drilling through sand, they were just trying to figure out something to not only because because sand caves in, so the mud helped to keep it from caving in while also bringing the cuttings up.
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That probably was revolutionary at the time, but who knew that it would explode into probably one of the most important parts of drilling a well.
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Right.
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And from a safety perspective, from keeping the well bore integrity, from getting the cuttings out, all that.
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I mean, mud is the blood pumping through the veins of the well while it's being drilled.
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So that was a good way to put it.
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Well, the well was not brought under control for nine days.
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It lost an estimated 850,000 barrels of oil.
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Dude.
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Can you imagine like how much cleanup nowadays?
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I mean, you spill like a gallon of oil, and the railroad commission's like, uh, we're gonna have to come out and do an inspection.
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850,000, that's insane.
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I haven't looked to see what the what Beaumont, Texas looked like at the time.
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There's probably like a diner and that well.
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So you got eight hundred and fifty thousand, not gallons.
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But this is eight hundred and fifty thousand barrels that are overflowing the top of this hill and going down into whatever was there, whether it was town, you know, I don't know if this hill was on the outside of town, but it does say that there was a literal flooding of of oil.
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So I just that's a picture I can't even because the world we come from and the world it is now, like you say, you spill a teaspoon of something on the ground and it's over.
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Shut down operations.
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Yeah.
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And back then, you know, what were they?
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I assume that they probably tried to retrieve some of that oil.
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I mean, it was coming out so much they had uh maybe they didn't.
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I don't know.
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Basically, this well on Spindletop Hill was the birth of an industrial revolution.
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I mean, things went berserk at this point.
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The technologies that were being used were different than what everybody else was using.
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So I just looked it up.
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Do you know how they actually how they actually got it to stop?
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Or not not how they got it to stop, but what they actually did to to uh do the cleanup, right?
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Like they had 800 sponges.
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Yeah.
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Yeah.
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How did you know?
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Quicker picker rubber?
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Uh exactly.
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The birth of another industry.
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You're welcome.
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Um so okay, so in 1901, Spindletop was uh cleaned up using modern their then modern environmental methods, including containing oil in makeshift lakes.
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They had so much oil coming out that they dug lakes.
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And then they were just like had rivers flowing from it from Spindletop Hill down into these lakes of oil.
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Well, I had I had pictured, you know, back then, I I can see them, you know, on one hand saying, Oh, this is liquid gold.
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We gotta capture as much of this as we can.
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Oh my gosh, it's flowing out of the the well.
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We gotta get it.
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But I also have this image in my head, they're like, ah, screw it.
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Cap this bad boy and let's start catch capturing this oil.
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Yeah, you know, yeah.
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I mean, like back then, was there an EPA back then?
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I don't think so.
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No, there definitely was.
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Captain Lucas immediately hired crews to shovel and plow dirt, building large earthen leaves known as dikes around the hill and to trap the rushing oil.
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The lake of oil then formed and successfully pulled into a massive open-air lake can covering several acres of land.
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Uh, the nearby railroad workers hastily threw up their own embankments to prevent the flowing oil from burying the railroad tracks.
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It says uh God.
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It's a lot of oil.
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Yeah, so several acres of land.
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It doesn't say specifically how much, several acres of land was completely covered in oil.
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I mean, just an acre of land completely covered in oil.
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It also resulted in the uh modern day Christmas tree.
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So, like the the modern day well heads came from the spindle top.
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The massive amount of pressure and how shallow this reservoir was.
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I mean, that that in and of itself is an anomaly, and and uh other things like this were probably hit afterwards, but this is a massive, massive reservoir, very shallow, under extremely high pressure.
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So uh that I mean that kind of explains, I don't know, does it explain why the hill formed over several thousands of years?
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Makes sense.
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I mean, was this stuff gonna just blow out on its own eventually?
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Probably.
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I mean maybe I don't know.
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It sounds like it.
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Yeah, it sounds like it was getting ready to.
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The bottom line for this spindletop well in Beaumont, Texas is that it really did birth the industry as we know it today.
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Obviously, advancements came quick.
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It's kind of like the four-minute mile, one guy did it, or nobody could do it until one guy did it, and then now, you know, tons of people run four-minute miles.
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The bottom line is that it changed the industry.
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And this is uh a story that anybody who is in the industry, whether you care about history or not, you really should take a look at this story and just kind of understand while you're out there on the location complaining because something sucks, and let's be honest, it always does.
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There's always something.
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But where did it start?
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Why do we do it this way?
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And how much better do you have it than your predecessors?
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Which is, you know, always the case, right?
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We advance as a society and a civilization and things get better and and all that.
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But by ignoring these stories, we don't really know.
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I think you always got to know where you're coming from, so you know where you're going, right?
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I mean, that's uh not a new phrase, but it's true.
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So that is your crude history story for today's episode.
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I think it's important for people to know is that there are a lot of interactions with oil and gas petroleum products every day that the average person is not aware of.
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And we feel like it's important for everybody to know how much oil and gas affects everybody's day-to-day life.
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It's gonna be 107 degrees later today.
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So I thought we'd touch on one of the greatest inventions in human history and how our industry had a major role in creating it: air conditioning.
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Like most great inventions, the air conditioner was actually invented by accident, and it was not initially intended to be a comfort product in the first place.
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In 1902, a young Brooklyn engineer named Willis Carrier was hired to fix a problem at a printing plant.
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Humidity in the plant had gotten so bad that the paper itself was swelling and the ink on it was smearing.
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So Carrier set out to build a dehumidifier, and he succeeded.
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But the cold air that it produced was an unexpected side effect, and he later decided to turn that into a business.
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Initially, Carrier's early machines were running on refrigerants like ammonia and methyl chloride, nasty, toxic stuff that was flammable and dangerous enough that leaks were actually killing people.
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In 1929, a leak at the Cleveland Hospital caused an explosion that killed over a hundred people.
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So for the first three decades of his existence, the technology was considered too dangerous to put in American homes, hunting for something stable enough, non-toxic, and non-flammable.
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And he landed on a synthetic chlorofluorocarbon that we call Freon.
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It quickly became the first petrochemical refrigerant.
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It built, uh, it was built from scratch in Midgley's lab.
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And that's the moment the air conditioning went from an industrial curiosity to something that you could put in a house without worrying that it might kill you.
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Once Freon hit the market, refrigerators and ACs took off almost overnight.
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The comfort side of the product that we have all come to know and love still had to wait a little bit longer, though.
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Post-war natural gas power finally made it affordable for us regular folks.
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And when that happened, the map of America redrew itself.
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Millions of people packed up and moved south.
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Fast forward to today, and the AC unit is entirely an oil-filled product from top to bottom.
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The refrigerant, petrochemicals.
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The compressor lubricant, petroleum.
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The foam insulation packed walls wrapped around the ductwork holding the cold air in, made by petrochemicals.
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And the electricity that's running that unit, especially if you're in the Permian Basin, is 100% natural gas power generation.
00:19:08.640 --> 00:19:14.400
So when it's 108 degrees outside and 72 degrees inside, that 36 degree gap did not come from nowhere.
00:19:14.559 --> 00:19:16.960
If you work in this industry, you made that happen.
00:19:17.200 --> 00:19:24.880
The interesting thing about what you just said is that I thought that prior to this, air conditioning didn't exist.
00:19:25.039 --> 00:19:35.680
But you're saying that air conditioning did exist and it was made up of basically the products that make weapons of mass destruction.
00:19:35.920 --> 00:19:36.559
Exactly.
00:19:36.880 --> 00:19:37.759
It was bombs.
00:19:38.079 --> 00:19:47.680
That uh ingenuity led to us living very comfortable lives, except for those people in Europe that they don't apparently have a lot of air conditioning.
00:19:47.920 --> 00:19:54.400
Yeah, did you hear that there was like nine and nine deaths or something last weekend because the temperatures reached 78 degrees?
00:19:54.880 --> 00:20:01.440
I did not, but I mean it's not 78 degrees, and they were like, oh, anyways, maybe it was it might have been 90.
00:20:01.599 --> 00:20:04.559
I think it was 98 degrees, but like apparently it doesn't happen in London very often.
00:20:04.640 --> 00:20:07.119
And they were like, oh, it's people just dropping dead.
00:20:07.200 --> 00:20:08.400
I'm like, 98 degrees.
00:20:08.480 --> 00:20:11.200
It was 98 degrees at seven this morning in Midland.
00:20:11.440 --> 00:20:13.839
What's funny is that there, I think it was in Paris.
00:20:13.920 --> 00:20:24.000
I think it was Paris's mayor that come out and blame the United States because people are dying of heat over there because we have air conditioning.
00:20:24.160 --> 00:20:32.480
I now have seen these videos of the people that are here for the World Cup that are talking about how great air conditioning is.
00:20:32.720 --> 00:20:52.000
I think it's interesting that these not only did it make things more comfortable, and it was really an unintended consequence of other things that created air conditioning and freon and all that, while it made us more comfortable, there's clearly a safety element there too.
00:20:52.079 --> 00:21:01.680
They they it made things safer for people to be indoors and inhaling air while being you know cooled off or whatever.
00:21:02.000 --> 00:21:05.119
Heat deaths have dropped off a cliff since the AC was invented.
00:21:05.359 --> 00:21:10.240
The entire sunbelt of America exists because of a box sitting on a windowsill.
00:21:10.400 --> 00:21:15.039
Towns like Houston, Phoenix, Las Vegas, Midland wouldn't exist.
00:21:15.200 --> 00:21:19.599
No AC, no workforce, no rigs, no crude logic show.
00:21:19.920 --> 00:21:23.759
Natural gas didn't just cool the living room, it built the modern South.
00:21:23.920 --> 00:21:31.599
So the next time you walk into the house from the heat and you feel the cold air, maybe you'll appreciate it just a little more knowing exactly what it took to make that happen.
00:21:31.839 --> 00:21:35.519
If you don't like the oil and gas industry, you're probably not listening to this show.
00:21:35.920 --> 00:21:36.400
Right?
00:21:36.640 --> 00:21:43.759
But on the off chance, you know, hey, we're trying to be a little educational here whilst promoting this industry.
00:21:43.920 --> 00:21:45.200
That's that's what we want to do.
00:21:45.359 --> 00:21:48.000
And history is important, so we can't ignore it.
00:21:48.160 --> 00:21:49.839
We're gonna highlight it on this show.
00:21:50.000 --> 00:21:55.359
And if anybody doesn't like history or thinks we need to go a different direction, you got two choices.
00:21:55.519 --> 00:22:00.079
You can comment and give us feedback, or you can just not watch us.
00:22:00.240 --> 00:22:01.200
And that's okay.
00:22:01.359 --> 00:22:04.640
Before we go, we'd like to thank today's sponsor, Pumpjack Apparel.
00:22:04.799 --> 00:22:15.039
Pumpjack Apparel covers your apparel needs, whether that is hats, shirts, one-off runs, corporate stores, pump jack apparel can meet your need.
00:22:15.200 --> 00:22:19.599
You can reach out to pumpjack apparel at pumpjackapparel.com.
00:22:19.759 --> 00:22:23.359
Our quote of the day is one that I think resonates.
00:22:23.599 --> 00:22:28.640
Energy is the only industry where the world notices you most when you stop.
00:22:28.720 --> 00:22:32.480
And if you know somebody that might enjoy this, uh please share it with them.
00:22:32.559 --> 00:22:34.000
We really appreciate the support.
00:22:34.079 --> 00:22:35.279
It helps out our channel.
00:22:35.440 --> 00:22:38.160
Please like, follow, subscribe.
00:22:38.319 --> 00:22:42.720
You can follow us on social media at crude logic show.
00:22:42.799 --> 00:22:46.799
And you can find us on our website at crudlogic.show.
00:22:47.200 --> 00:22:50.799
Join us tomorrow where we're going to be talking about hydraulic fracturing.
00:22:50.960 --> 00:22:54.079
This didn't just change oil, it changed America.
00:22:54.240 --> 00:22:58.240
And most people have no idea how close it came to never happening.
00:22:58.400 --> 00:23:00.880
So that'll do it for this Monday on Crude Logic.
00:23:00.960 --> 00:23:08.000
Tomorrow we're talking about the man who was told this will never work and still change the entire industry.
00:23:08.240 --> 00:23:15.200
So stay safe out there, keep drilling, and remember, it's only logic if it's crude logic.
00:23:15.359 --> 00:23:16.240
We'll see you tomorrow.
00:00:00.160 --> 00:00:04.959
One uncontrolled blowout in Texas didn't just make oil history.
00:00:05.120 --> 00:00:10.880
It created Exxon, Chevron, Houston, and probably your job.
00:00:15.199 --> 00:00:16.960
Welcome back to Crude Logic.
00:00:17.039 --> 00:00:24.079
Whether you work in it, invest in it, or just wonder how the oil and gas industry affects your everyday life, you're in the right place.
00:00:24.160 --> 00:00:25.359
Let's go to the market minute.
00:00:25.519 --> 00:00:25.760
All right.
00:00:25.920 --> 00:00:26.559
Are we ready?
00:00:26.800 --> 00:00:29.280
Yeah, because we over here have been waiting.
00:00:29.440 --> 00:00:29.920
Yeah.
00:00:30.399 --> 00:00:32.560
Wait for your lazy ass to get out of bed.
00:00:32.719 --> 00:00:34.320
Nope, just to do the market report.
00:00:34.479 --> 00:00:37.920
In today's market minute, West Texas crude is at 6863.
00:00:38.159 --> 00:00:43.439
Brent is at 7203, and Henry Hub Natural Gas is at 321.
00:00:43.759 --> 00:00:56.560
Boy, have I got a story for you that you probably already know as well as the rest of the industry, but I think it's an important story to talk about because not everybody's going to know this because who cares about history these days?
00:00:56.799 --> 00:00:59.439
Anybody under 35, probably.
00:00:59.679 --> 00:01:03.280
This rig or well was located in Beaumont, Texas.
00:01:03.600 --> 00:01:05.760
You probably already know what I'm talking about.
00:01:05.920 --> 00:01:14.400
The drill site was at, this is going to be a dead giveaway, Spindletop Hill in Beaumont, Texas.
00:01:14.719 --> 00:01:16.719
So there were investors.
00:01:16.879 --> 00:01:19.680
They were skeptical of drilling with rotary tools.
00:01:19.760 --> 00:01:20.079
Okay.
00:01:20.560 --> 00:01:26.560
So the uh the moment everything changed was on January 10th, 1901.
00:01:26.719 --> 00:01:29.680
The drill hits a pressurized reservoir.
00:01:29.840 --> 00:01:30.400
All right.
00:01:31.200 --> 00:01:35.280
Oil shoots well over a hundred feet into the air.
00:01:35.599 --> 00:01:43.840
So for anybody who can't really put together what a hundred feet is, it's a 10-story building, if that'll help you out any.
00:01:44.400 --> 00:01:45.680
Which is quite high.
00:01:46.000 --> 00:01:48.959
So oil is shooting out of this sucker.
00:01:49.280 --> 00:01:53.680
The flow rate was unimaginable at this time.
00:01:54.879 --> 00:01:57.680
The uh oil flooding surrounded land.
00:01:58.159 --> 00:02:01.599
It was uh basically a boomtown explosion in Beaumont.
00:02:01.680 --> 00:02:07.519
This this kind of kicked off uh a huge drilling explosion in this area.
00:02:08.159 --> 00:02:12.719
The uh land speculation was a was a frenzy.
00:02:13.280 --> 00:02:19.520
The there were new companies, and some of these companies you guys will know, there were new companies forming overnight.
00:02:19.759 --> 00:02:22.240
So this birthed our industry.
00:02:22.479 --> 00:02:33.039
This this uh well that occurred in Spindletop Hill in Beaumont, Texas, literally was the beginning of all of our jobs.
00:02:34.000 --> 00:02:45.520
So if you haven't heard the story, this isn't going to be a super deep dive into the story by any means, but if you haven't heard the story, this is an important one to know.
00:02:45.759 --> 00:02:47.120
This is where the roots came from.
00:02:47.280 --> 00:02:54.560
This was not the beginning of the oil field, but it was the beginning of the modern oil field.
00:02:54.719 --> 00:03:01.919
On Beaumont Hill, this this hill was formed uh through salt rising to the surface.
00:03:02.319 --> 00:03:17.680
The spindletop well in its first year produced 3.5 million barrels of oil climbing to s climbing to 17.4 million by its second year.
00:03:17.919 --> 00:03:28.560
Texaco, Gulf, Mobile, Humble, and Sun Oil can all trace their roots back to the Big Hill, as they affectionately refer to it.
00:03:28.719 --> 00:03:37.120
A consequence of that well was that uh at the time, a barrel of oil cost two dollars.
00:03:37.439 --> 00:03:46.560
When the spindletop well blew out and became a thing, oil per barrel dropped down to 25 cents a barrel.
00:03:46.719 --> 00:03:49.280
So that is a huge, a massive drop.
00:03:49.439 --> 00:03:52.080
Now, obviously, it's you know, it's business, right?
00:03:52.159 --> 00:03:53.439
It's uh supply and demand.
00:03:54.319 --> 00:03:56.960
Supply went way up all of a sudden.
00:03:57.199 --> 00:04:00.000
Fishtail drilling bits gave way to rotary bits.
00:04:00.159 --> 00:04:05.599
Petroleum engineer pioneers in California and Texas led the way for oil-producing states.
00:04:05.759 --> 00:04:15.680
Service companies for the exploration and production were beginning to converge on Bakersfield, Houston, and the Oklahoma oil capital of Tulsa.
00:04:16.160 --> 00:04:18.639
It dropped oil prices dramatically.
00:04:18.959 --> 00:04:29.519
Whenever these oil prices drop, like you got this big influx of oil, and they were the investors probably invested.
00:04:30.079 --> 00:04:32.079
Um of course they did.
00:04:33.279 --> 00:04:40.959
But when the when the investors invested this money, were they investing at the$2 per barrel price?
00:04:41.360 --> 00:04:52.240
I feel like everybody's trying to find the greedy angle to make a quicker or larger buck, but maybe I would have kept my mouth shut about spindlesop and built some holding tanks and just let it ride for a while.
00:04:52.800 --> 00:04:58.240
Some of them may have been really eager to get some some smart money put into these wells.
00:04:58.399 --> 00:05:10.240
You know, it's like, well, okay, it produces at$2 a barrel, but they probably also didn't expect it to produce in its second year 17 million barrels.
00:05:10.560 --> 00:05:11.040
Right.
00:05:11.279 --> 00:05:13.680
That decline curved kind of backwards.
00:05:14.240 --> 00:05:22.000
So I mean, even though the price went down, those particular investors were setting on what?
00:05:22.639 --> 00:05:25.199
I don't know, uh a thousand X.
00:05:25.920 --> 00:05:27.680
You said it went to 25 cents a barrel?
00:05:27.920 --> 00:05:31.199
Yes, it went from two dollars to twenty-five cents a barrel.
00:05:32.160 --> 00:05:36.639
That's four million dollars, four point two million for the second year.
00:05:36.959 --> 00:05:40.240
I'm not sure what they invested, but I don't think a wooden rig cost that much.
00:05:40.959 --> 00:05:43.439
No, I'm sure that they all made a ton of money.
00:05:43.600 --> 00:05:50.639
I don't think any of them had any idea that this was going to that it was going to produce this much.
00:05:51.040 --> 00:05:52.480
So No, of course not.
00:05:52.560 --> 00:05:55.519
They probably put in what I wonder that's what I'd like to know is what they put in.
00:05:55.600 --> 00:06:03.600
Well, they put in$4,000 and, you know, it may be it doesn't say how much they invested, but I guess it's all relative, right?
00:06:03.759 --> 00:06:20.399
If you invest at a$2 per barrel price and you expect it to produce a thousand barrels or a hundred thousand barrels, or whatever you have calculated it to do, but then it does in the millions, then I don't think you're too upset, right?
00:06:20.639 --> 00:06:22.879
So this was a massive development.
00:06:23.040 --> 00:06:24.240
I believe it was 10 days.
00:06:24.319 --> 00:06:36.000
I can't find it in this article, but the amount of time that it took it, approximately 850,000 barrels blew out of the well before they could even get it under control.
00:06:36.480 --> 00:06:41.279
So literally almost a million barrels were blowing out of this thing for days.
00:06:42.560 --> 00:06:46.560
And if it was on a hill, you know where things go.
00:06:46.720 --> 00:06:47.519
They go downhill.
00:06:47.600 --> 00:06:55.439
So, you know, there was like crude oil flooding the surface until they could get this under control.
00:06:55.519 --> 00:07:06.800
So the well was originally supposed to cost$20,000, and he had a$10,000 investment in it initially, and then the cost quickly soared to$50,000.
00:07:07.680 --> 00:07:15.600
Um one well representing an initial investment of just under$10,000 was sold later for$1.2 million.
00:07:15.839 --> 00:07:20.959
So the the population of Beaumont went from$10,000 to$50,000 in like a year.
00:07:21.839 --> 00:07:30.079
Yeah, like a major in influx of uh economic boom, and you know, I mean buildings were probably going up like crazy.
00:07:30.319 --> 00:07:31.759
Anthony Lucas.
00:07:33.120 --> 00:07:40.240
He was a Croatian mining engineer, so he was interested in the spindletop hill.
00:07:41.040 --> 00:07:53.680
He said that uh this mound attracted my attention on account of its contour, which indicated possibilities for an incipient dome below.
00:07:54.319 --> 00:07:55.839
He liked the shape of the hill.
00:07:56.000 --> 00:07:57.279
He thought something was there.
00:07:57.519 --> 00:07:58.160
That's it.
00:07:58.399 --> 00:08:11.920
So he contacted the famed Pennsylvania oilman John Gailey and his partners James Guffey, who had drilled marginally successful wells in nearby Corsicana in 1896.
00:08:13.040 --> 00:08:19.439
Gailey and Guffey returned to Pennsylvania unconvinced that there was a future for oil in Texas.
00:08:21.920 --> 00:08:24.639
Wow, beyond their years.
00:08:25.199 --> 00:08:28.319
Uh Gay and then it says Gailey would have a change of heart.
00:08:28.480 --> 00:08:43.360
So three years later, the uh the veteran independent producer returned to Beaumont to survey the area, picked a spot on Spindletop Hill, and began the drilling on October 27, 1900.
00:08:43.440 --> 00:08:50.720
The drillers had to find ways to drill through several hundred feet of sand, which berthed mud.
00:08:51.279 --> 00:09:01.120
To help solve the problem, one of uh Lucas's drillers, Kurt Hamill, came up with a solution that was revolutionary at the time.
00:09:01.759 --> 00:09:08.720
I don't know about you, but before I got into the oil and gas industry, I had no idea that they circulated mud through the system to clean out the you know, well bores.
00:09:09.679 --> 00:09:18.960
Mud is an integral part of what we do now in order to be able to bring cuttings out of the hole, uh, to be able to keep gas pressure down.
00:09:19.120 --> 00:09:21.039
They were having to drill through a lot of sand.
00:09:22.159 --> 00:09:23.360
It's gotta be like a water hose.
00:09:23.440 --> 00:09:28.799
That's what I was looking at the the picture of the bit and thinking, how do they circulate through that?
00:09:28.879 --> 00:09:35.200
Like the bit looks like it's it didn't even look like it had a threaded end to screw into the bottom of pipe.
00:09:35.279 --> 00:09:39.279
It looks like it was a peg with a cotter pin, you know.
00:09:39.360 --> 00:09:42.320
So it went into like a Did it have jets on it?
00:09:42.720 --> 00:09:51.600
No, and there was no jets on the on the one that the original one that they used, so it had to be they must have just poured water down in the hole directly.
00:09:51.919 --> 00:09:53.600
Yeah, that's that's all I can think of, too.
00:09:53.679 --> 00:09:56.799
And it couldn't have been pressurized or anything, so no wonder they only got 1200 feet.
00:09:57.039 --> 00:09:57.919
Surprised they go that far.
00:09:58.000 --> 00:10:00.480
They just let the cuttings float to the surface or what?
00:10:01.279 --> 00:10:08.240
Instead of pumping the water down the hole to flush out the cuttings produced by the action of the drill, Hamel used mud.
00:10:08.480 --> 00:10:11.039
This helped in retrieving the well cuttings.
00:10:11.360 --> 00:10:14.879
The first iteration of drilling fluid mud.
00:10:15.120 --> 00:10:21.200
I mean, he he basically created a mud that was thicker viscosity than water, like we do today.
00:10:21.279 --> 00:10:23.840
But he just didn't there wasn't a science behind it then.
00:10:23.919 --> 00:10:24.960
He was just winging it.
00:10:25.360 --> 00:10:39.440
Yeah, I think I think that they were literally because they were drilling through sand, they were just trying to figure out something to not only because because sand caves in, so the mud helped to keep it from caving in while also bringing the cuttings up.
00:10:39.759 --> 00:10:48.720
That probably was revolutionary at the time, but who knew that it would explode into probably one of the most important parts of drilling a well.
00:10:49.200 --> 00:10:49.440
Right.
00:10:49.679 --> 00:10:55.519
And from a safety perspective, from keeping the well bore integrity, from getting the cuttings out, all that.
00:10:55.600 --> 00:11:00.399
I mean, mud is the blood pumping through the veins of the well while it's being drilled.
00:11:00.639 --> 00:11:01.519
So that was a good way to put it.
00:11:01.759 --> 00:11:04.879
Well, the well was not brought under control for nine days.
00:11:05.200 --> 00:11:10.559
It lost an estimated 850,000 barrels of oil.
00:11:11.279 --> 00:11:11.840
Dude.
00:11:12.080 --> 00:11:15.840
Can you imagine like how much cleanup nowadays?
00:11:16.000 --> 00:11:21.840
I mean, you spill like a gallon of oil, and the railroad commission's like, uh, we're gonna have to come out and do an inspection.
00:11:22.080 --> 00:11:24.480
850,000, that's insane.
00:11:24.799 --> 00:11:29.120
I haven't looked to see what the what Beaumont, Texas looked like at the time.
00:11:29.279 --> 00:11:31.200
There's probably like a diner and that well.
00:11:31.279 --> 00:11:35.120
So you got eight hundred and fifty thousand, not gallons.
00:11:38.799 --> 00:11:55.120
But this is eight hundred and fifty thousand barrels that are overflowing the top of this hill and going down into whatever was there, whether it was town, you know, I don't know if this hill was on the outside of town, but it does say that there was a literal flooding of of oil.
00:11:55.360 --> 00:12:05.600
So I just that's a picture I can't even because the world we come from and the world it is now, like you say, you spill a teaspoon of something on the ground and it's over.
00:12:05.759 --> 00:12:07.120
Shut down operations.
00:12:07.200 --> 00:12:07.519
Yeah.
00:12:07.679 --> 00:12:09.519
And back then, you know, what were they?
00:12:09.759 --> 00:12:13.840
I assume that they probably tried to retrieve some of that oil.
00:12:13.919 --> 00:12:16.960
I mean, it was coming out so much they had uh maybe they didn't.
00:12:17.039 --> 00:12:17.440
I don't know.
00:12:17.679 --> 00:12:23.679
Basically, this well on Spindletop Hill was the birth of an industrial revolution.
00:12:23.840 --> 00:12:27.919
I mean, things went berserk at this point.
00:12:28.240 --> 00:12:33.039
The technologies that were being used were different than what everybody else was using.
00:12:33.279 --> 00:12:34.320
So I just looked it up.
00:12:34.399 --> 00:12:36.879
Do you know how they actually how they actually got it to stop?
00:12:36.960 --> 00:12:43.440
Or not not how they got it to stop, but what they actually did to to uh do the cleanup, right?
00:12:43.519 --> 00:12:44.799
Like they had 800 sponges.
00:12:45.759 --> 00:12:46.159
Yeah.
00:12:46.879 --> 00:12:47.120
Yeah.
00:12:47.200 --> 00:12:48.080
How did you know?
00:12:49.759 --> 00:12:50.960
Quicker picker rubber?
00:12:51.120 --> 00:12:51.919
Uh exactly.
00:12:52.159 --> 00:12:54.000
The birth of another industry.
00:12:54.720 --> 00:12:55.759
You're welcome.
00:12:56.000 --> 00:13:08.559
Um so okay, so in 1901, Spindletop was uh cleaned up using modern their then modern environmental methods, including containing oil in makeshift lakes.
00:13:08.960 --> 00:13:12.480
They had so much oil coming out that they dug lakes.
00:13:13.120 --> 00:13:20.960
And then they were just like had rivers flowing from it from Spindletop Hill down into these lakes of oil.
00:13:21.279 --> 00:13:28.559
Well, I had I had pictured, you know, back then, I I can see them, you know, on one hand saying, Oh, this is liquid gold.
00:13:28.639 --> 00:13:30.399
We gotta capture as much of this as we can.
00:13:30.480 --> 00:13:32.559
Oh my gosh, it's flowing out of the the well.
00:13:32.720 --> 00:13:33.840
We gotta get it.
00:13:34.080 --> 00:13:37.600
But I also have this image in my head, they're like, ah, screw it.
00:13:37.840 --> 00:13:40.799
Cap this bad boy and let's start catch capturing this oil.
00:13:40.879 --> 00:13:42.159
Yeah, you know, yeah.
00:13:42.240 --> 00:13:44.879
I mean, like back then, was there an EPA back then?
00:13:45.039 --> 00:13:45.600
I don't think so.
00:13:45.759 --> 00:13:46.799
No, there definitely was.
00:13:47.440 --> 00:13:55.679
Captain Lucas immediately hired crews to shovel and plow dirt, building large earthen leaves known as dikes around the hill and to trap the rushing oil.
00:13:55.840 --> 00:14:03.840
The lake of oil then formed and successfully pulled into a massive open-air lake can covering several acres of land.
00:14:04.399 --> 00:14:12.799
Uh, the nearby railroad workers hastily threw up their own embankments to prevent the flowing oil from burying the railroad tracks.
00:14:12.960 --> 00:14:14.399
It says uh God.
00:14:15.840 --> 00:14:17.120
It's a lot of oil.
00:14:17.440 --> 00:14:19.840
Yeah, so several acres of land.
00:14:20.080 --> 00:14:24.080
It doesn't say specifically how much, several acres of land was completely covered in oil.
00:14:24.399 --> 00:14:28.480
I mean, just an acre of land completely covered in oil.
00:14:29.120 --> 00:14:32.159
It also resulted in the uh modern day Christmas tree.
00:14:32.320 --> 00:14:36.559
So, like the the modern day well heads came from the spindle top.
00:14:37.360 --> 00:14:42.480
The massive amount of pressure and how shallow this reservoir was.
00:14:42.799 --> 00:14:59.360
I mean, that that in and of itself is an anomaly, and and uh other things like this were probably hit afterwards, but this is a massive, massive reservoir, very shallow, under extremely high pressure.
00:15:00.000 --> 00:15:08.639
So uh that I mean that kind of explains, I don't know, does it explain why the hill formed over several thousands of years?
00:15:09.120 --> 00:15:09.360
Makes sense.
00:15:09.600 --> 00:15:12.559
I mean, was this stuff gonna just blow out on its own eventually?
00:15:12.960 --> 00:15:13.679
Probably.
00:15:13.919 --> 00:15:16.320
I mean maybe I don't know.
00:15:16.639 --> 00:15:17.200
It sounds like it.
00:15:17.360 --> 00:15:19.039
Yeah, it sounds like it was getting ready to.
00:15:19.519 --> 00:15:30.159
The bottom line for this spindletop well in Beaumont, Texas is that it really did birth the industry as we know it today.
00:15:30.320 --> 00:15:32.240
Obviously, advancements came quick.
00:15:32.480 --> 00:15:43.519
It's kind of like the four-minute mile, one guy did it, or nobody could do it until one guy did it, and then now, you know, tons of people run four-minute miles.
00:15:43.679 --> 00:15:45.600
The bottom line is that it changed the industry.
00:15:45.759 --> 00:16:04.399
And this is uh a story that anybody who is in the industry, whether you care about history or not, you really should take a look at this story and just kind of understand while you're out there on the location complaining because something sucks, and let's be honest, it always does.
00:16:04.480 --> 00:16:05.679
There's always something.
00:16:06.000 --> 00:16:07.919
But where did it start?
00:16:08.159 --> 00:16:09.360
Why do we do it this way?
00:16:09.440 --> 00:16:12.159
And how much better do you have it than your predecessors?
00:16:12.320 --> 00:16:13.759
Which is, you know, always the case, right?
00:16:13.840 --> 00:16:18.879
We advance as a society and a civilization and things get better and and all that.
00:16:19.120 --> 00:16:22.080
But by ignoring these stories, we don't really know.
00:16:22.240 --> 00:16:26.320
I think you always got to know where you're coming from, so you know where you're going, right?
00:16:26.480 --> 00:16:28.960
I mean, that's uh not a new phrase, but it's true.
00:16:29.120 --> 00:16:33.679
So that is your crude history story for today's episode.
00:16:34.000 --> 00:16:48.799
I think it's important for people to know is that there are a lot of interactions with oil and gas petroleum products every day that the average person is not aware of.
00:16:48.960 --> 00:16:57.519
And we feel like it's important for everybody to know how much oil and gas affects everybody's day-to-day life.
00:16:57.759 --> 00:16:59.759
It's gonna be 107 degrees later today.
00:16:59.919 --> 00:17:07.680
So I thought we'd touch on one of the greatest inventions in human history and how our industry had a major role in creating it: air conditioning.
00:17:08.079 --> 00:17:15.599
Like most great inventions, the air conditioner was actually invented by accident, and it was not initially intended to be a comfort product in the first place.
00:17:16.000 --> 00:17:21.680
In 1902, a young Brooklyn engineer named Willis Carrier was hired to fix a problem at a printing plant.
00:17:21.920 --> 00:17:27.359
Humidity in the plant had gotten so bad that the paper itself was swelling and the ink on it was smearing.
00:17:27.440 --> 00:17:31.440
So Carrier set out to build a dehumidifier, and he succeeded.
00:17:31.680 --> 00:17:38.400
But the cold air that it produced was an unexpected side effect, and he later decided to turn that into a business.
00:17:38.799 --> 00:17:49.839
Initially, Carrier's early machines were running on refrigerants like ammonia and methyl chloride, nasty, toxic stuff that was flammable and dangerous enough that leaks were actually killing people.
00:17:50.000 --> 00:17:55.119
In 1929, a leak at the Cleveland Hospital caused an explosion that killed over a hundred people.
00:17:55.279 --> 00:18:05.519
So for the first three decades of his existence, the technology was considered too dangerous to put in American homes, hunting for something stable enough, non-toxic, and non-flammable.
00:18:05.759 --> 00:18:10.240
And he landed on a synthetic chlorofluorocarbon that we call Freon.
00:18:10.799 --> 00:18:13.839
It quickly became the first petrochemical refrigerant.
00:18:14.000 --> 00:18:17.599
It built, uh, it was built from scratch in Midgley's lab.
00:18:17.680 --> 00:18:24.000
And that's the moment the air conditioning went from an industrial curiosity to something that you could put in a house without worrying that it might kill you.
00:18:24.240 --> 00:18:29.519
Once Freon hit the market, refrigerators and ACs took off almost overnight.
00:18:29.839 --> 00:18:35.599
The comfort side of the product that we have all come to know and love still had to wait a little bit longer, though.
00:18:35.839 --> 00:18:40.319
Post-war natural gas power finally made it affordable for us regular folks.
00:18:40.480 --> 00:18:43.759
And when that happened, the map of America redrew itself.
00:18:43.920 --> 00:18:46.559
Millions of people packed up and moved south.
00:18:46.799 --> 00:18:51.039
Fast forward to today, and the AC unit is entirely an oil-filled product from top to bottom.
00:18:51.200 --> 00:18:53.680
The refrigerant, petrochemicals.
00:18:53.839 --> 00:18:56.000
The compressor lubricant, petroleum.
00:18:56.079 --> 00:19:02.319
The foam insulation packed walls wrapped around the ductwork holding the cold air in, made by petrochemicals.
00:19:02.400 --> 00:19:08.559
And the electricity that's running that unit, especially if you're in the Permian Basin, is 100% natural gas power generation.
00:19:08.640 --> 00:19:14.400
So when it's 108 degrees outside and 72 degrees inside, that 36 degree gap did not come from nowhere.
00:19:14.559 --> 00:19:16.960
If you work in this industry, you made that happen.
00:19:17.200 --> 00:19:24.880
The interesting thing about what you just said is that I thought that prior to this, air conditioning didn't exist.
00:19:25.039 --> 00:19:35.680
But you're saying that air conditioning did exist and it was made up of basically the products that make weapons of mass destruction.
00:19:35.920 --> 00:19:36.559
Exactly.
00:19:36.880 --> 00:19:37.759
It was bombs.
00:19:38.079 --> 00:19:47.680
That uh ingenuity led to us living very comfortable lives, except for those people in Europe that they don't apparently have a lot of air conditioning.
00:19:47.920 --> 00:19:54.400
Yeah, did you hear that there was like nine and nine deaths or something last weekend because the temperatures reached 78 degrees?
00:19:54.880 --> 00:20:01.440
I did not, but I mean it's not 78 degrees, and they were like, oh, anyways, maybe it was it might have been 90.
00:20:01.599 --> 00:20:04.559
I think it was 98 degrees, but like apparently it doesn't happen in London very often.
00:20:04.640 --> 00:20:07.119
And they were like, oh, it's people just dropping dead.
00:20:07.200 --> 00:20:08.400
I'm like, 98 degrees.
00:20:08.480 --> 00:20:11.200
It was 98 degrees at seven this morning in Midland.
00:20:11.440 --> 00:20:13.839
What's funny is that there, I think it was in Paris.
00:20:13.920 --> 00:20:24.000
I think it was Paris's mayor that come out and blame the United States because people are dying of heat over there because we have air conditioning.
00:20:24.160 --> 00:20:32.480
I now have seen these videos of the people that are here for the World Cup that are talking about how great air conditioning is.
00:20:32.720 --> 00:20:52.000
I think it's interesting that these not only did it make things more comfortable, and it was really an unintended consequence of other things that created air conditioning and freon and all that, while it made us more comfortable, there's clearly a safety element there too.
00:20:52.079 --> 00:21:01.680
They they it made things safer for people to be indoors and inhaling air while being you know cooled off or whatever.
00:21:02.000 --> 00:21:05.119
Heat deaths have dropped off a cliff since the AC was invented.
00:21:05.359 --> 00:21:10.240
The entire sunbelt of America exists because of a box sitting on a windowsill.
00:21:10.400 --> 00:21:15.039
Towns like Houston, Phoenix, Las Vegas, Midland wouldn't exist.
00:21:15.200 --> 00:21:19.599
No AC, no workforce, no rigs, no crude logic show.
00:21:19.920 --> 00:21:23.759
Natural gas didn't just cool the living room, it built the modern South.
00:21:23.920 --> 00:21:31.599
So the next time you walk into the house from the heat and you feel the cold air, maybe you'll appreciate it just a little more knowing exactly what it took to make that happen.
00:21:31.839 --> 00:21:35.519
If you don't like the oil and gas industry, you're probably not listening to this show.
00:21:35.920 --> 00:21:36.400
Right?
00:21:36.640 --> 00:21:43.759
But on the off chance, you know, hey, we're trying to be a little educational here whilst promoting this industry.
00:21:43.920 --> 00:21:45.200
That's that's what we want to do.
00:21:45.359 --> 00:21:48.000
And history is important, so we can't ignore it.
00:21:48.160 --> 00:21:49.839
We're gonna highlight it on this show.
00:21:50.000 --> 00:21:55.359
And if anybody doesn't like history or thinks we need to go a different direction, you got two choices.
00:21:55.519 --> 00:22:00.079
You can comment and give us feedback, or you can just not watch us.
00:22:00.240 --> 00:22:01.200
And that's okay.
00:22:01.359 --> 00:22:04.640
Before we go, we'd like to thank today's sponsor, Pumpjack Apparel.
00:22:04.799 --> 00:22:15.039
Pumpjack Apparel covers your apparel needs, whether that is hats, shirts, one-off runs, corporate stores, pump jack apparel can meet your need.
00:22:15.200 --> 00:22:19.599
You can reach out to pumpjack apparel at pumpjackapparel.com.
00:22:19.759 --> 00:22:23.359
Our quote of the day is one that I think resonates.
00:22:23.599 --> 00:22:28.640
Energy is the only industry where the world notices you most when you stop.
00:22:28.720 --> 00:22:32.480
And if you know somebody that might enjoy this, uh please share it with them.
00:22:32.559 --> 00:22:34.000
We really appreciate the support.
00:22:34.079 --> 00:22:35.279
It helps out our channel.
00:22:35.440 --> 00:22:38.160
Please like, follow, subscribe.
00:22:38.319 --> 00:22:42.720
You can follow us on social media at crude logic show.
00:22:42.799 --> 00:22:46.799
And you can find us on our website at crudlogic.show.
00:22:47.200 --> 00:22:50.799
Join us tomorrow where we're going to be talking about hydraulic fracturing.
00:22:50.960 --> 00:22:54.079
This didn't just change oil, it changed America.
00:22:54.240 --> 00:22:58.240
And most people have no idea how close it came to never happening.
00:22:58.400 --> 00:23:00.880
So that'll do it for this Monday on Crude Logic.
00:23:00.960 --> 00:23:08.000
Tomorrow we're talking about the man who was told this will never work and still change the entire industry.
00:23:08.240 --> 00:23:15.200
So stay safe out there, keep drilling, and remember, it's only logic if it's crude logic.
00:23:15.359 --> 00:23:16.240
We'll see you tomorrow.
