The Big Rich: The Rise and Fall of the Greatest Texas Oil Fortunes
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He got precisely one answer, from a down-on-his-luck character named Anthony Lucas, a onetime captain in the Austro-Hungarian navy who had become fascinated with the possibilities of a geologic feature known as a salt dome, literally domes of salt that poked up, pimplelike, in mounds all along the American Gulf Coast. Lucas thought salt domes often harbored caches of sulfur or sometimes oil. After meeting with Higgins, he judged the Big Hill a classic salt dome.
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Now it was Lucas who took up the banner of the Big Hill.
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Lucas had never seen anything like it. No human had. The Lucas No. 1 well changed the world forever. That first well produced at a greater rate than all other American oil wells in existence—combined. In a matter of days, in fact, the pastures around Spindletop would be producing more than the rest of the world’s oil wells—combined. Of those first six Texas oil wells, three produced at a higher rate than the entire country of Russia, then the world’s top producer.
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Its dirty little secret was that the oil found around Beaumont was of such poor quality it could not be refined into kerosene. But it made fine fuel oil—and that’s what changed everything.
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So much black crude flowed from Beaumont that oil prices dropped to three cents a barrel—a cup of water cost five cents—making it economical for railroads and steamship companies to convert from coal to oil.
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Everything that today runs on oil and its by-products, from automobiles to jet fighters to furnaces, barbecue grills, and lawn mowers—all of it began at Spindletop.
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For a time the discovery of oil transformed Beaumont into a classic American boomtown, an orgy of mud and blood, oilmen, prostitutes, and thieves of every stripe, anyone and everyone who was willing to work for a quick buck. It was the beginning of Texas Oil.
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just about any Texas businessman with cash threw it at Spindletop.
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The pivot on which everything turned, at least initially, was James Guffey,
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“the deal of the century” when he sold much of Spindletop’s oil to a company he had never heard of—and whose executives needed a map to locate Beaumont—Royal Dutch Shell, Europe’s largest oil producer; the deal made Shell an international colossus.
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Mellon family of Pittsburgh, who roared into the Gulf Coast fields with a new company it name...
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Another of the companies weaned at Spindletop was the Texas Company, later known as Texaco.
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In 1904 and 1905 and into 1906, every discernible salt dome on the Texas coast was poked like a patient, but no new Spindletops turned up. The boom began to wane. When, in 1906, oil was discovered in Oklahoma, hundreds of men began streaming north.
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The state’s salvation, it turned out, lay in the fine print of its antitrust laws, which forbade the integration of oil companies, that is, companies that stored, transported, and refined oil weren’t allowed to produce it.
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When Texas oil prices rose in 1906, Burt tried to drive them down by threatening to import cheaper oil from Oklahoma. The Texas attorney general, Robert Vance Davidson, responded by strafing Burt with a series of lawsuits and fines, eventually forcing Standard to dismantle its refinery and rebuild it in Baton Rouge, Louisiana. The message was clear: don’t mess with Texas.
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Thanks to their brass-knuckled political leaders, Texans had earned the right to look for their own oil. Now they just had to find some.
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drillers’ inability to penetrate solid rock, Hughes and Sharp developed a drill that could. Patented in 1908, the Hughes rock bit became an industry standard, and by the time the Hughes family returned to Houston in 1909, Hughes Sr. was fast becoming a wealthy man. In time the company he founded, Hughes Tool, would make his son, the legendary Howard Hughes Jr., the wealthiest Texas oilman of all, though in name only. When he reached adulthood in the 1920s, Howard Hughes fled Texas for Hollywood and never returned.
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Humble, which later became better known as Exxon, would remain a power in the Texas oil fields for decades to come.
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Standard retained a sizable minority stake it slowly increased in Magnolia, whose claim to fame was the giant red-neon Pegasus it erected over its downtown headquarters, a Dallas landmark visible from fifty miles away.
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Academics viewed the state of Texas as an economic colony of the East, a view that would endure for years after it was no longer true.
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Then, in 1919, an orgy of consumer spending inaugurated the Jazz Age. All across America, wartime parsimony gave way to an explosion of household purchasing as families finally opened their wallets to buy the new technologies the new American oil had wrought. Farmers bought tens of thousands of tractors. Housewives ordered new stoves and ranges. Corporations ordered new industrial boilers. No item, though, sold faster than automobiles. In 1900 there were eight thousand cars in the United States. By 1916 there were three and a half million. By 1921 there were 10.5 million. And every single one ...more
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Spurring much of this publicity was Texas’s first genuine set of gushers since Spindletop. They erupted around the drowsy country town of Ranger, west of Fort Worth, in October 1917.
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drilled a hole looking for coal but found traces of oil instead.
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The barrier to entry, as economists would put it, was low.
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their leasing and oil-purchase policies the lightning bolts that, when flung across Texas, could enrich or ruin almost any independent.
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Oil wells could make an ordinary Texan rich, but typically only after being sold to Gulf, Magnolia, Texaco, or the ’umble, as Humble was known.
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Two did it the old-fashioned way, drilling holes deep in the earth. One did it with his mind. The fourth did it with a fountain pen. If Texas Oil had a Mount Rushmore, their faces would adorn it. A good ol’ boy. A scold. A genius. A bigamist. Known in their heyday as the Big Four, they became the founders of the greatest Texas family fortunes, headstrong adventurers who rose from nowhere to take turns being acclaimed America’s wealthiest man.
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When Cullen realized they had nothing to mark it, he walked to a mound of what Texans tastefully call “cow chips,” picked up a few dry chunks, and piled it on the ground—which is how the man who would become Houston’s greatest wildcatter came to drill his first actual oil well beneath a pile of handpicked cow manure.
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The latter instilled in Cullen a distrust of most things eastern and northern, a mind-set that also stayed with him throughout his life.
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Defying his mother, he dropped out of school to work ten hours a day in a candy factory.
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He made an impromptu study of southern cities, and was impressed when he read in the newspaper that city fathers in Houston, hoping to lure shipping after a hurricane devastated nearby Galveston in 1901, were planning to dredge a ship channel to the Gulf of Mexico.
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so hot diplomats at the British consulate received hardship pay.
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Some thought oil flowed in underground rivers or pooled in subterranean caverns. Oil fields were thronged with characters who claimed to have special oil-finding powers, preachers who swore they had X-ray eyes, and drifters who used everything from divining rods to psychic powers
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“Rocks! Rocks! Sam, all they talk about is rocks. Do they think we’re running a stone quarry?
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A few companies had begun “surface mapping,” reasoning they might deduce what lay beneath the land by what lay atop it. Studying the land was known colloquially as “creekology,” from the analysis, such as it was, of creek beds and hillsides.
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By 1920 Lillie was making noises about how much he was traveling. Cullen was almost forty by then, and his five children barely knew him. Couldn’t he find work in Houston like other fathers? Which is how, armed only with his library books and a reputation for hard work and honesty, Cullen decided to drill a well on his own.
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There was a good natural-gas well on the dome’s southeast flank. Cullen had been studying it for months when one morning he took out his handkerchief and placed it over a gas-release valve. It showed no color. Still, on a hunch, Cullen returned every day for two weeks, and one morning he saw a faint hint of yellow on his handkerchief. Each day the color grew deeper, until Cullen saw a rich amber. It was just a hunch, but he was willing to bet the amber was a sign of oil.
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Just as Cullen’s drill bit finally chewed into the prairie, the neighboring crew struck oil.
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Minutes after he gave the signal to drill, the well erupted in a geyser of oil, blowing the “Christmas tree” of steel valves into the sky and spattering the spectators, who laughed and whooped as Cullen and his drilling crew struggled to control the bucking well.
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When he did make it home, streaked with mud and sweat, his skin pimpled with insect bites, Lillie would be waiting on the veranda, and they would walk up the stairs in silence. “Help me get my boots off, Lillie,” he would say, slumping on the bed. “Let me get a shave and a bath. Tomorrow’s another day.
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He hit a small producer, sixty-five barrels a day, and it got him thinking. Every prospect in the area had been drilled to the Miocene. Why not drill deeper?
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Heading straight for the Frio this time, Cullen hit the second gusher of his career, a pool almost as big as the first. It came in strong on a rainy night, blowing off the Christmas tree, the spewing oil coating the glasses of his driller so thoroughly he couldn’t see to cap the well for hours. The investors got their money back and more, and if Cullen’s financial future wasn’t yet certain, his reputation as an oilman was. “That man had guts,” one investor, J. E. Duff, said years later. “If he thought there was oil under a tract, he’d spend his last dollar drilling it, regardless of what ...more
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West didn’t understand. “I offered you three million dollars, Cullen—and you’d get a quarter of that (outright). You’ll turn that down and put up five thousand of your own money? ” “That’s right,” Cullen said. That way, he went on, “I won’t be working for you.
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brought in a good well, nearly sixty thousand barrels a day.
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“You’re gonna lease it without even looking at it?” West asked. “Are you crazy, Roy?” “We have geophysical reports on the entire area,” Cullen said. “Looking at it won’t add anything to that. It won’t mean anything.” “Well, it will to me!” West barked. “I’m going out there!” “Go ahead, Jim,” Cullen said. “I’d go with you, but I’ll be too busy getting ready to drill it.
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This was the first challenge a deep driller on the Gulf Coast faced, but Cullen thought he had found a way through it. Once the drill bit sank into the lowest layer of gumbo, he instructed his tool-pusher to set their casings, an outer pipe that shielded the hole from water, all the way down through the salt water to the gumbo. It worked; both the salt water and the gumbo were kept out of the well. Free to go deeper, Cullen hit a pool of pure “pipeline” oil—oil so free of impurities it could be pumped directly into a big company’s pipeline.
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It took several hours but it worked, and by midnight, when Cullen lay down by the derrick to grab some sleep, they had penetrated the slushy, oil-bearing sand underneath, the sought-after Yegua sand. Four hours later Cullen heard Brown shout: “Wake up, Mr. Cullen. I think she’s coming in!”5
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In the dim predawn light Cullen rose to see oil and gas spewing so violently from their hole that the four-inch flow line, which connected the well to a storage tank, had come loose and was wildly slashing the air. Cullen dashed to the storage tank, leaped atop it, and held the thrashing line until his crew could tie it down. It was the kind of daredevilry other operators might have avoided, but Cullen did it time and again, and his crews loved him for it.
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“He was never a man to tell his employee, ‘You do this.’ When there was a dangerous task to be done, it was ‘Follow me.
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It was his victory over the “heaving shale,” however, little known to anyone outside the oil business, that brought him the kind of recognition only a fifth-grade dropout could appreciate. Seven years later, in 1935, the University of Pittsburgh’s engineering department, after launching a quiet investigation into the factors that led to deeper drilling in Texas, awarded Cullen a doctor of science degree for his achievement.
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