Oil and Gas

Shortly after the end of the Civil War, the first purposeful and successful attempt at drilling for oil in Texas occurred at Oil Springs, near Nacogdoches in East Texas. In 1866, less than a decade after Colonel Edwin Drake's 1859 Titusville, Pennsylvania well brought America into the age of oil, Lyne T. Barret struck oil at 106 feet. Oil had been found before in Texas, but it was either through surface leaks or when drilling for water. Alas for Barret, though, the greater volumes and lower producing costs of Pennsylvania oil beat his Texas oil. As a result, he abandoned the well.

Then, in 1894, the beginnings of the Texas age of oil were realized by the first major discovery--Corsicana in the east-central part of the state. Then it seemed like it was one discovery right after another. The first true boom came from the 1901 Spindletop gusher of Anthony Lucas. Working with a salt mining company in Louisiana, he had noticed the gentle mounds that raised the surface of the Louisiana and Texas Gulf Coast. He recognized these as salt domes--natural traps holding reservoirs of oil. Spindletop was not the last of the south-east Texas fields. More followed.

The next cluster of discoveries was in North Central Texas between 1902 and 1920--Petrolia, Electra, and Burkburnett--and, during that same period, and a little further south--Breckenridge and Desdemona in 1918.

Throughout these early years, whenever a boomer came in, oil seemed to cover the surrounding lands. The pressure of some of these wells was so great that it was days before the flow could be controlled. In the meantime, oil soaked into the ground, or ran off in nearby creeks and gullies, or was directed into nearby pits that were hastily dug. Even after the flow was controlled, pits were used for storage or vast open tanks. The results were inevitable--waste and pollution. While pollution may not have been a concern in those early days (oil was a sign of wealth and adventure even if it was in a creek), waste was. And, a fire roaring from one well to the next, engulfing one tank then another, was an all too frequent occurrence.

While the Texas Legislature in the later 1800s and early 1900s had passed several bills relating to the use or conservation of the state's oil and gas, a familiar thing happened--very little or nothing in the way of observance. Laws without enforcement or with enforcement only through the courts had a tendency to be ignored. As each discovery occurred, more waste occurred.

Other problems cropped up in the infant industry. Transportation was one. To have substantive value, the oil had to reach its markets--the refineries. Early on, miles of tank cars were pulled by steam locomotives. Then, pipelines became the choice in many regions. However, if a company owned both a pipeline and wells, the tendency was to take from its wells and ignore surrounding wells owned by another company. In 1917, to prevent abuses, the Legislature designated oil pipelines as common carriers and, more importantly, give jurisdiction to the Railroad Commission which was already regulating a transportation industry--the railroads. By 1919, the Commission was also granted jurisdiction over oil and gas production. It was at that date the Oil and Gas Division was created.

Regulation did not truly take hold until the 1930s and it was a struggle all the way. The East Texas Oil Field was discovered in 1930. Unlike many other fields at this stage of industry development, the East Texas Field was taken over by a multitude of small independent operators, each racing to put up a rig. Derrick touched legs with derrick. Each well was produced wide-open. The price of oil crashed. More critically, it was felt that the natural water drive of the field was being lost. When the Railroad Commission tried to step in and cut back production, action began in the courts and, at one point, State military forces were called in to regain order. It was several years before courts and the State Legislature were able to settle on the position that the Commission had the right to prorate production--to conserve the state's natural resources, to protect correlative rights, and prevent pollution.

Since the 1930s, the Railroad Commission has held a leading role in the regulation of oil and gas, one that has been recognized throughout the world. Even though production has been declining over the last few decades, the state still produces more oil and gas than any other state. Indeed, if Texas were a nation, it would rank as one of the top ten producers. Today, there are some 241,000 active oil and gas wells which produce an average of some 1.7 million barrels of oil a day and 11.5 BCF (billion cubic feet) of gas a day. The Commission's Oil and Gas Division tracks that production and ensures that it follows allocations that are calculated each month. In addition, through its ten district offices, field inspectors visit the wells and facilities across the state to ensure compliance with Commission rules and regulations. Increasingly important, the division works to ensure that the water resources of the state are protected from damage by oil and gas field activities.

Last Updated: 7/20/2015 12:17:55 PM