Oil Capital Birthed From Dreams and Disasters

American Association of Petroleum Geologists (AAPG)
Annise Parker
Annise Parker

Houston grew into the energy capital of the United States, and possibly the world, through more than a century of growth.

But its fate as an energy center was seeded in the space of just 125 days, in a story of disaster followed by discovery.

Two New York brothers, Augustus Chapman Allen and John Kirby Allen, moved to the Texas region in 1832. When independence-minded “Texians” revolted against Mexico, the pair outfitted a ship to help move supplies and protect the coast.

After questions about their operations and rumors of privateering began to circulate, they sold the ship to the Texas Navy – doubling the size of its fleet. Two more schooners were soon added, but by the end of 1837 all of the ships had been lost at sea.

Meanwhile, Augustus and John acquired land by Buffalo Bayou in August 1836, planning to start a new city. They used money from an inheritance granted to Augustus’s wife, Charlotte, who suggested naming the city after Texian general and hero Sam Houston.

Present-day Houston Mayor Annise Parker noted that the Allens paid $1.40 per acre for 6,642 acres of land along the banks of the bayou.

“It was mosquito-infested land that just about anyone else would have passed up,” Parker said. “Who would have thought at the time that this real estate speculation would have grown into the international city we are today?

“John and Augustus Allen had a dream and they made it happen,” she continued. “We are still a city of entrepreneurs. We say that if you can dream it, you can achieve it here.”

John became the representative of Nacogdoches County to the first Congress of the Republic of Texas. He joined a successful lobbying movement to have Houston named the republic’s capital.

The new city got a big boost, but it didn’t last long. In 1839 the capital moved to a Colorado River townsite called Waterloo, which soon changed its name to Austin.

Sadly, John Kirby Allen didn’t last long, either. He died in August 1838.

The Game Changer

Houston grew into a major commercial, shipping and railroad hub for the export of cotton, thanks in part to the landings on Buffalo Bayou. By 1890 it had become the railroad center of Texas. Galveston and Houston were the state’s main export points, with Galveston having the natural harbor.

Then, on Sept. 8, 1900, the deadliest hurricane in U.S. history hit Galveston. Most of the island was leveled, and somewhere between 6,000 to 8,000 people died.

Economic recovery for Galveston happened slowly, and Houston emerged as the preeminent export hub for the state, with loading points at several places along the bayou.

At the same time, something was happening east of Houston that would prove just as important for Houston’s future.

Anthony F. Lucas, an expert on salt dome formations, had begun drilling a wildcat well on a dome called Spindletop, near Beaumont. He made it to 575 feet before running out of money.

Lucas was forced to secure funds from private investors and lost much of his financial interest in the lease, but was able to resume drilling.

On Jan. 10, 1901, the well reached 1,139 feet and the wildcat came in. In a huge way. The Lucas Gusher spewed oil 150 feet in the air and produced 100,000 barrels a day.

In a period of little more than four months, Houston was on its way to becoming an energy center for America and the world.

Events that followed strengthened the city’s position. In January 1910, Harris County voted to spend $1.25 million on dredging the Houston ship channel to a depth of 25 feet, an amount matched by federal funds.

The steamship Satilla, the first deepwater ship to arrive at the Port of Houston, established steamboat service between New York and Houston in June 1914. President Woodrow Wilson officially opened the deepened Ship Channel and enlarged port in November the same year.

Today, according to the city, the Port of Houston ranks first in the United States in international water-borne tonnage handled and second in total cargo tonnage handled. It is the tenth largest port in the world.

A Diverse, International City

Parker said the city’s success largely came from the early-day economic drive and “that entrepreneurial spirit that has continued since the Allen Brothers ­– it’s our can-do attitude and international diversity.

“There are businesses in Houston that do business around the world. Every language of the world is spoken here. We are comfortable with, tolerant and accepting of that which is different,” she noted. “This is what gives us an edge in expanding international ties.”

In fact, more than 90 languages are spoken throughout the Houston area and 92 countries have consular offices in Houston, the third highest number among U.S. cities.

Oil refineries began appearing along the Houston Ship Channel during the 1920s and 1930s, followed by large petrochemical complexes. The city’s oil, petrochemical and shipbuilding industries grew in prominence during World War II.

As international air travel developed, Houston became known as a convenient place to fly from to the west, east and south. By 2010, the city’s three-airport system served 49.5 million passengers per year, including more than seven million international travelers.

Home to more than 5,000 energy-related firms, Houston is considered by many to be the Energy Capital of the World. But it has a broad industrial base and contains the headquarters of 23 Fortune 500 companies, second only to New York City.

“In the past, we were known strictly as the oil and gas capital of the world. Today, oil and gas still reign, but Houston is also gaining a worldwide reputation in the ‘green’ arena,” Parker said.

“In fact, a lot of the research into sustainable options is being done by Houston-based energy firms who made their names in oil and gas. This is due to the wealth of knowledge we have available to work on development of the technologies that will fuel our lifestyles in the decades to come,” she explained.

By 1850, early-day Houston had exploded into a city with 2,396 residents. Now it has well over 2.1 million, making it the fourth most populous city in the United States.

Houston’s Consolidated Metropolitan Statistical Area consists of eight counties – Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery and Waller – and covers 8,778 square miles, an area slightly larger than New Jersey. The metropolitan area’s population is almost six million.

“We will always be the home of the energy giants, NASA and the Texas Medical Center,” Parker said, “but the economic diversification we’ve experienced since the 1980s oil bust has led to expansion opportunities for a whole host of other industries.”

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