Petroleum in Utah
Utah is one of the Rocky Mountain petroleum-producing states. The history of Utah’s oil industry is one of slow development that can be divided into two distinct phases: a period of exploration, and a more recent time of commercial production. The exploratory period began in 1850 when Captain Howard Stansbury, while on a survey of the Great Salt Lake for the Army Corps of Topographical Engineers, discovered evidence of the existence of “petroleum” along the northern shore of the lake. Over the next forty years, Utah residents and visitors found other indications of oil in various parts of the region. Prior to 1890, gold prospectors traveling down the San Juan River in southeastern Utah noticed oil seeps along the river’s steep embankments. Around the same time, two Salt Lake City businessmen found oil dripping from the crevices of rocks along the Green River, and ranchers and other residents of the Uinta Basin came across similar occurrences in the area around Vernal.
In 1891 members of an enterprise called the Utah Oil Company, whose incorporators included Simon Bamberger and C.J. Millis, sank a shallow well near the town of Green River, Utah. Not finding any oil, the company abandoned its well after drilling to a depth of 1,000 feet. During the remainder of the 1890s, oil and gas prospectors sank approximately twenty-five wells in various parts of the state.
In 1901 Anthony Lucas’s fabulous petroleum discovery at Spindletop, Texas, encouraged Utahns to take more interest in their state’s oil potential. After witnessing a somewhat frenzied increase in the formation of petroleum companies and the leasing of promising oil properties, Salt Lake City’s Daily Tribune proclaimed in December 1901 that an “oil era” was at hand for Utah. Two years later, Utah’s coal-mine inspector supported the Tribune‘s claim by noting the existence of thirty-five oil companies within the state and the drilling of two wells.
By mid-1907 Washington and San Juan counties in southern Utah had become the focal points of oil-field activities. Early in that year Pat Holohan, a Nevada miner, found outcroppings of oil sand near a settlement called Virgin City in Washington County and quickly drilled two wells. Twelve different companies soon put down fourteen wells in the region. At the same time, a former gold prospector named L.L. Goodridge began drilling a well at Mexican Hat on the San Juan River in San Juan County. In March 1908 Goodridge produced a gusher, and by the end of 1909 as many as seven oil companies had started work on no less than twenty-five wells around Mexican Hat. While neither Virgin City nor Mexican Hat ever became major oil-producing fields, enough oil was extracted from both to supply small local refineries that operated intermittently for many years.
Oil men drilled more than eighty wells in Utah from 1907 through 1912. In addition, John C. Howard incorporated the Utah Oil Refining Company and completed the construction of a refinery at the northern edge of Salt Lake City in 1909. After 1912, however, the state’s oil industry went into a slump from which it did not totally recover until 1922.
However, the prospect of finding petroleum continued to lure a few explorers to various regions of Utah, and from 1916 to 1921 several companies, including such major operators as the Ohio Oil Company and the Midwest Refining Company, drilled a dozen deep test holes. Observing the persistence of these enterprises, one writer concluded in 1925 that their efforts were justified because Utah’s structural and surface conditions held “exceptional promise for oil and gas accumulation.”
During the 1920s petroleum companies accelerated the tempo of exploration throughout Utah. In addition to working over areas previously examined, oil men initiated drilling projects in new locations such as Salt Lake City itself, where one company drilled a well at the north end of Redwood Road while a second firm sank a well near Highland Drive. Enterprising petroleum operators also tested the Great Salt Lake to a greater extent than had been done previously. The Lakeside Oil Company drilled on the western shore of the lake, and an offshore rig was built on a pier near Rozel Point at the lake’s northern tip.
One of the most spectacular ventures of the period was a joint project on the Colorado River near Moab. The companies involved in this endeavor included the Utah-Southern Oil Company, the Midwest Enterprises Company, and John Howard’s Utah Oil Refining Company. Together these three firms drilled a well that hit oil on 8 December 1925. At first the well gushed oil, gas, rock, sand, and gravel hundreds of feet into the air, but very quickly the 84-foot-high wooden derrick caught fire and burned. The Salt Lake Mining Review hailed the discovery as evidence that Utah had just joined the ranks of the “real petroleum-producing states.” Such a sentiment was premature, however, because the well’s promoters were unable to produce any oil from the venture despite their extending the well eventually to a depth of 5,000 feet.
During the 1920s Earl Douglas, a paleontologist who discovered fossils in the area that became Dinosaur National Monument, was an eloquent spokesman for Utah’s oil industry. Being interested in petroleum geology and having conducted many scientific investigations in the Uinta Basin, Douglas became convinced that that region contained a great deal of oil, and throughout the 1920s he called attention to the Uinta Basin by writing journal articles and letters of correspondence, and by visiting financial centers to seek support for drilling projects.
The Great Depression and the first years of World War II, however, damped many oil men’s enthusiasm for Utah’s petroleum potential. Experiencing the worst slowdown in drilling since the period of World War I, Utah oil promoters drilled only 143 wells from 1930 through 1944. In 1939 only three wells were sunk; the total dropped to two in 1942, and no one ventured into any areas which had not already been explored before the Great Depression.
Utah’s oil industry managed to survive the slowdown. Developers continued to drill in Washington County’s Virgin oil field and completed a total of sixty wells before 1944. Standard Oil of California sank two test holes in Emery County, and the Utah-Southern Oil Company remained active in Grand County, even drilling one well to a depth of 6,715 feet. William E. Nevills, who began to work in the Mexican Hat oil field in the mid-1920s, enlarged his operations by adding three wells to his string of small producing wells.
Toward the end of World War II oil men began to accelerate Utah’s petroleum operations once again. This time they succeeded to the extent that from 1945 through 1947 they finished the groundwork necessary to propel the state into a period of commercial oil production. The focal point of these activities was the Uinta Basin. Here a number of large companies such as Standard Oil of California, Pure, Continental, Gulf, Carter, and Union began to explore more seriously than at any time previously. Despite the presence of these major firms, however, the Equity Oil Company, a Utah-based enterprise under the leadership of J.L. Dougan, was the first to find commercial amounts of oil in the Uinta Basin. Dougan was drilling in Ashley Valley on 18 September 1948 when his company tapped a pool of oil that produced 300 barrels a day. Within the next seven years, major oil companies would open Uinta Basin fields, including Roosevelt (1949), Red Wash (1951), Walker Hollow (1953), and Bluebell (1955). These fields became part of two giant oil-producing complexes–Greater Altamont/Bluebell and Greater Red Wash–which ultimately included White River (1961), Cedar Rim (1969), and Altamont (1970).
During the 1950s other large companies, including Shell, Superior, and Texas Oil, tapped into an oil region in southeastern Utah that overshadowed even the Uinta Basin. The discovery well was at Aneth, along the San Juan River east of the old Mexican Hat field, and produced 1,704 barrels of oil a day after it hit oil in 1956. During that year twenty other wells in the area were completed, each averaging a daily flow of 800 barrels of oil. The major companies operating in close proximity to the Aneth region soon discovered several other fields, and together these fields became known as the Greater Aneth Area.
From the late 1940s until 1975 almost all of Utah’s oil development occurred in an area extending down the eastern border of the state from the Uinta Basin to the San Juan River. The one exception to this was the Upper Valley oil field, which is located ten miles southeast of Escalante in Garfield County. In 1964 Tenneco opened the Upper Valley field. By 1978 there were twenty-six active wells that were capable of producing a total of one million barrels of petroleum a year.
In 1975 Summit County became an important center for oil development. As part of the Overthrust Belt, a region of highly complex mountain-forming faults and thrusts, Summit County became the scene of American Quasar’s discovery at a field called Pineview, east of Coalville. Within the next five years Amoco, Chevron, Gulf, Champlin, and Anschutz Corporation hit large amounts of oil and gas in a series of fields that included Lodgepole, Elkhorn Ridge, Anschutz Ranch, and Anschutz Ranch East.
From Howard Stansbury’s discovery of “petroliem” along the northern shore of the Great Salt Lake in 1851 to the opening of the giant Overthrust Belt fields in Summit County in the late 1970s, the history of Utah’s oil industry has been one of slow and intermittent development. The first companies to drill within the state were generally small and poorly financed, and the majority of wells they drilled did not even reach a depth of 1,000 feet. None produced the 300 barrels of oil a day that Equity’s first well initially yielded. Only gradually did the large petroleum companies enter Utah, and they did not succeed in discovering commercial quantities of oil until after 1948. Most of their development has occurred in the eastern third of Utah, from the Uinta Mountains to the San Juan River.
In the 140 years since Stansbury’s first discovery, nearly one hundred sixty fields have been explored, and approximately 900,000,000 barrels of oil have been produced in Utah (Texas yielded almost that much petroleum in 1947). Utah’s number of productive wells increased from 225 in 1957 to 875 in 1968 and 1,300 in 1978. While the state’s contribution to the amount of oil produced in the United States has remained relatively minor, the petroleum industry has become one of Utah’s significant commercial enterprises.
The future of Utah’s petroleum industry may be found in the extensive oil-shale and tar-sand reserves located in the eastern half of the state. Utah’s oil-shale reserves are estimated at several trillion barrels, with the richest deposits located in the Uinta Basin, where 90 to 115 billion barrels are contained in deposits that have the potential to yield twenty-five or more gallons per ton. Tar-sand, or oil-impregnated rock, is located in more than fifty deposits stretching from the Uinta Basin south into San Juan and Garfield counties. Utah’s tar-sand deposits contain an estimated 23 to 29 billion barrels. Beginning in 1970, the United States Department of the Interior started several programs to stimulate oil-shale and tar-sand development; however, commercial extraction of petroleum from oil-shale and tar-sand at this time remains a potential rather than a reality.