The Story of Oil in California

Signal Hill
Signal Hill rises up 110 meters (365 feet) behind Long Beach, 32 km (20 miles) south of Los Angeles. Its name is derived from a local Native American practice of signaling to each other from the imposing hill. Because of its size, signals could be sent by way of smoke or fire either to other hills in the area, or to boats out at sea. Oil men first started exploring the area in 1916 after the successes of other ventures in southern California. In 1921, Dr. W. Van Holst Pellekaan, Chief geologist for Shell, tried to stop the drilling at Signal Hill, unconvinced of its potential. He was too late, however, and the drilling proceeded.

Signal Hill, California, 1932

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Photo courtesy of Atlantic Richfield Company

The Shell Game
Shell's reluctance to drill Signal Hill was understandable. The company had spent three million dollars at Ventura in the previous 5 years, and had no oil to show for it. And only 4 years before, Union Oil had drilled an unsuccessful well (also known as a "duster") on Signal Hill. But it was ultimately the tenacity of Frank Hayes and Alvin Theodore Schwennesen, geologists with Shell, that moved the project forward.

Work began on the Alamitos # 1 well on March 23rd. By May 2, the hole reached 843 meters (2,765 feet) and gave a showing of oil. Soon thereafter, 21 meters (70 feet) of standing oil was found in the bottom of the hole. But still, no oil flowed, and the crew, lead by driller O.P. "Happy" Yowells, began to wonder what exactly was happening. Then on June 23rd at 9:30 PM, the Alamitos #1 erupted with so great a gas pressure that oil gushed 35 meters (114 feet) into the air. Unfortunately, the bottom of the hole soon caved in. Much cleaning of the hole was required, and on June 25, 1921, the well was producing more than 1,000 barrels of oil per day. The well would eventually produce 700,000 barrels of oil.

The rush is on....
The discovery created a stampede. While the well was being drilled, the area was in the process of being subdivided into residential lots. Many of the lots, though already sold to prospective homeowners, were not yet built upon, and potential homeowners quickly changed their minds and entered the business of looking for oil, hoping to get rich quick. The parcels of land were so small and the forest of tall wooden derricks so thick that the legs of many of them actually intertwined. Oil promoters were selling shares of wells that had not yet been drilled. Signal Hill was to prove so prolific that, almost unbelievably, many of those buyers actually made money on their investments. The next-of-kin of persons buried in the Sunnyside Cemetary on Willow Street would eventually receive royalty checks for oil drawn out from beneath family grave plots.

By April 1922, only 10 months after completion of the discovery well, Signal Hill was covered with 108 wells, producing 14,000 barrels daily. By the fall of 1923, 259,000 barrels of crude was being produced every day from nearly 300 wells.

Signal Hill was the biggest field the already productive Southern California region had ever seen. In 1923, Signal Hill produced 244,000 barrels, alongside Huntington Beach (discovered in 1920) at 113,000 and Santa Fe (1921) at 32,000. This made California the nation's number-one producing state, and in 1923, California was the source of one-quarter of the world's entire output of oil! Even so, fears of shortage were still very much in the air. "The supply of crude petroleum in this country is being rapidly depleted", the Federal Trade Commission warned in 1923. But in that same year, American crude oil production exceeded domestic demand for the first time in a decade.

Remote location turns into tanker technology
Because of California's remote location relative to the industrial centers of the east, California oil companies were at the forefront of tanker technologies. As a consequence, much of the state's market was overseas. In 1894, the Pacific Coast Oil Company and the Union Oil Company partnered to build the first true oil tanker on the Pacific Ocean. Named the George Loomis, its maiden voyage departed Ventura, California in January, 1896, and a new era was born. The development of California oil also presented challenges to the geologist that had been seen in no other oil field. As a result, the complexities of the geology of Southern California lead to a significantly increased knowledge of petroleum geology and exploration.

By the end of 1938, the Long Beach Field had produced 614.5 million barrels of crude, 750 million barrels by 1950, and over 900 million barrels by 1980. This made Signal Hill one of the most productive fields per acre the world has ever known.

Franks, Kenny A. and Lambert, Paul F. (1985). "Early California Oil: A Photographic History, 1865-1940." Texas A&M University Press, College Station, Texas. 243 pp.

Yergin, Daniel (1991). "The Prize." Simon & Schuster, New York. 885 pp.

Rintoul, William (1976). "Spudding In." California Historical Society, San Francisco. 240 pp.

Lockwood, Charles (1980) "In the Los Angeles Oil Boom, Derricks Sprouted Like Trees." Smithsonian October, 1980. pp 187-206.

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