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a brief American history of oil (boom and bust, growth and crisis)

English: The Lucas Gusher at Spindletop Hill, ...

Image via Wikipedia

Humans first discovered crude oil over 100 years ago in the US. In the 20th century, the US led the world in the production of oil as well as in the consumption of oil. Currently, the US is the 3rd leading producer of oil in the world, but still consumes more than twice as much oil as any other country (at almost 25% of global oil consumption).

While the remainder of this piece focuses on the American Continent, here is a brief distinction from a global perspective. The two national regions that produced the most oil in the world during the 20th century were the US and Russia/USSR. In that century, those two places also rose to economic and political dominance and soon were called “superpowers,” superseding prior dominant regions such as Great Britain or Germany. While many people may propose that other factors are the reason that the US and USSR rose to global prominence, such as the allegedly superior political system of the US, consider that it was not two nations with similar political systems that rose to global superpower status, nor did most or all of the nations with that particular kind of political system rise to global superpower status, but just the two nations that led the world in oil production. Consider whether the evidence is clear that oil is the primary issue, and that the various internal propaganda claims of the USSR and US are simply various internal propaganda claims.
Back to the US in particular, it is well known that Texas was the center of the US (and global) oil industry for much of the 20th century. On that note, here is a question for political ideologists: was it the vastly superior political system of Texas (relative to all other states of the US) which led to Texas being the US state with the most economic growth in the early 20th century?
Here is some content from wikipedia: http://en.wikipedia.org/wiki/Texas_Oil_Boom
“The Texas Oil Boom, sometimes called the Gusher Age, was a period of dramatic change and economic growth in U.S. State of Texas during the early 20th century that began with the discovery of a large petroleum reserve near Beaumont, Texas. The find was unprecedented in its size and ushered in an age of rapid regional development and industrialization that has few parallels in U.S. history. Texas quickly became one of the leading oil producing states in the U.S., along with Oklahoma and California; soon the nation overtook the Russian Empire as the top producer of petroleum. By 1940 Texas had come to dominate U.S. production. Some historians even define the beginning of the world’s Oil Age as the beginning of this era in Texas.[1]“

Houston, Texas in 1873. Bird's Eye View Of the...

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“…Many small towns, such as Wortham, which had become boomtowns during the1920s saw their booms end in the late 1920s and early 1930s as their local economies collapsed, resulting from their dependence on relatively limited petroleum reservoirs. As production peaked in some of these smaller fields and the Great Depression lowered demand, investors fled.[8] In the major refining and manufacturing centers such as Beaumont, Houston, and Dallas, the boom continued to varying degrees until the end of World War II. By the end of the war, the economies of the major urban areas of the state had matured. Though Texas continued to prosper and grow, the extreme growth patterns and dramatic socioeconomic changes of the earlier years largely subsided….”

In other words, by the mid-1940s, Texas went from rising to prominence to maintaining prominence. As the global oil industry shifted away from Texas to other regions, Houston and various other parts of Texas eventually declined dramatically in economic activity.

Moving on from the early 20th Century and Texas, “Alaska accounts for one-fifth (20 percent) of domestically produced United States oil production. Prudhoe Bay (North America’s largest oil field) alone accounts for 8% of the U.S. domestic oil production…  typically producing about 400,000 barrels per day.” http://en.wikipedia.org/wiki/Alaska#Energy Attached is a chart of Alaskan Oil Reserves and Production across a few decades.
Note that while many US states are facing bankruptcy, Alaska is not. Alaska created a fund in 1976 that, beginning in 1982, has paid residents as much as $3,269.00 per person annually (in 2008). That is 5% of the dividends (earnings) of the fund, meaning that the $40 billion of principal is not reduced by those payments. In other words, if the above data from wikipedia is accurate, the state of Alaska has an accumulated surplus of $40 billion which produced investment gains of about $65,000 per year per resident.
How many other US states have that kind of budget surplus? Again, for all of you political ideologists, consider that the only possible reason that the state of Alaska has such a different economic situation than the other US states is obviously the vastly superior political system of Alaska, which was  of course based on the Texas system, which was unfortunately destroyed by that one evil guy or that one evil group sometime after 1945 and clearly never had anything to do with the oil industry.
Now, moving on beyond the US, notice that of the top 4 national regions in the world for remaining oil reserves (with various precision of estimates), 3 of them are on this continent: Canada, Mexico, and Venezuela. Let’s start with the last one: “Since the discovery of oil in the early 20th century, Venezuela has been one of the world’s leading exporters of oil, and it is a founding member of OPEC [a private group of "Oil Producing and Exporting Countries" which does not include the USSR and never included the US].” ”Besides the largest conventional oil reserves and the second-largest natural gas reserves in the Western Hemisphere,[47] Venezuela has non-conventional oil deposits (extra-heavy crude oil, bitumen and tar sands) approximately equal to the world’s reserves of conventional oil.[48]“ “The Venezuelan [state-owned] oil producer PDVSA wholly owns its United States-based subsidiary, Citgo and attributes a large percentage of its wealth to oil sales from the United States.” http://en.wikipedia.org/wiki/Venezuela#Petroleum_and_other_resources
Now on to Canada…. Actually, nevermind Canada in general. Let’s focus on the province of Alberta:
“Alberta has 39% of Canada’s remaining conventional oil reserves… but if oil sands are included, Alberta’s share is over 98%.[4]“ 
In fact, nevermind Alberta. Let’s focus on Fort McMurray:
“Fort McMurray, one of Canada’s fastest growing cities, has grown enormously in recent years because of the large corporations which have taken on the task of oil production. As of late 2006 there were over $100 billion in oil sands projects under construction or in the planning stages in northeastern Alberta.[45]“
Now I probably do not need to tell you that the only possible reason that Fort McMurray and Alberta are growing so much faster than other regions is because of their political system based off of those of Alaska and Texas and Venezeula and Russia and Saudi Arabia, right? Anyway, let’s just hope that for the future of Alberta and Fort McMurray, no evil people show up and ruin everything.
Moving on from Canada, how about Mexico? Frankly, Mexico is the reason I am sending out this piece, but I wanted to set  up the following info with all of the preceding context. Note again that the top-producing oil field in the US generates 400,000 barrels per day. Actually, nevermind Mexico in general….
“In 2002 Pemex (the state-owned oil company of Mexico) began developing an oil field… located 105 kilometers from Ciudad del Carmen. It is estimated that by 2011 the field will produce nearly 800 thousand barrels per day…. Ciudad del Carmen was a small city mostly devoted to fishing until the 1970s when oil was discovered in the region; since then it has grown and developed substantially.”  (Note chart showing the recent peak of oil production in Mexico.)
In conclusion, all of you know that there is only one reason that evil people like me are promoting this ridiculous conspiracy theory connecting oil to economics. We are obviously trying to distract you from copying our vastly superior political ideology so that you do not compete against us. Thank you for your cooperation, complacency, and compliance. Please follow the guidelines we established to ruthlessly exploit the people of Wortham, Texas, which boomed in the early 20th century due to the oil industry, but of which you have probably never heard because it is now of no particular importance economically or politically.
Also, please do not share this information. This is top secret. Please do not ever click this link: www.The DominOILeffect.com or else you may explode into laughter like that one guy in Willy Wonka and the Chocolate Factory.
originally published: Apr 19, 2011
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This entry was posted on March 17, 2012 at 7:55 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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