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OIL: The Greatest Gamblers

6 minute read

Oil is the greatest single source of wealth in America for individual fortunes. At the same time, exploring for it is the greatest source of business failure, a fact to which wildcatters deliberately blind themselves. They disregard the unfulfilled dreams and broken lives that lie buried at the bottom of the staggering total of 300,000 dry holes drilled in America and think only of those who, despite every difficulty, persevered to success.

Thus writes Ruth Sheldon Knowles, 44, longtime (since 1937) U.S. oil consultant and wildcatter, in The Greatest Gamblers (McGraw-Hill; $6), out last week to mark the centennial of U.S. oil. Her message: the U.S. has grown to power in oil because of a few uncommon » men, who were armed only with faith, hope and their own by-guess-and-by-God oil-finding theories.

The man-making, man-eating industry began in 1859 when Edwin L. Drake, a sickly, bearded failure of a man in a stovepipe hat, brought in the nation’s first commercial oil well near Titusville, Pa. Though Discoverer Drake wound up virtually penniless and forgotten, his find opened the scramble for oil across the land.

In Drake’s wake came Captain Anthony F. Lucas, an Austrian immigrant with a vague theory that oil is locked under salt domes. He started drilling near Beaumont, Texas and in 1901 struck Spindletop. Within weeks, oilmen there struck no less than six gushers that could produce more oil than the rest of the world combined. More money was lost than gained in the ensuing land rush, but Spindletop spouted 50 million bbl.. spawned three great oil-producing companies: Humble, Texas, Sun.

Blind Lead the Blind. Oil fever sent men searching in the unlikeliest places on the unlikeliest leads. A miner in California, Edward Doheny, sniffed oil when he spotted an ice wagon loaded with tar jolting along a Los Angeles street before the century’s turn; he rustled up another prospecting pal, Charles Canfield, and with pick and shovel they dug a 4-ft. by 6-ft. shaft 165 ft. down into the nearby tar pits, struck a field that was to flow more than 70 million bbl., lead to the discovery of another 6 billion bbl. in the San Joaquin valley and the production of hundreds of millions for Canfield and Doheny.

The greatest wildcatter of all, Mike Ben-edum (TIME, Oct. 7, 1957), and his partner Joe Trees in 1904 found an arrow carved in a rock in West Virginia, heard a tale that it pointed to treasure buried by pirates years before, sighted along it and drilled a 3,000-bbl.-a-day producer. In the same state, hearing of a blind farmer’s vision of oil spouting over his maple tree, they drilled on the spot, found a 300-bbl.-a-day well. In Illinois, following the directions of a blind judge who had developed his own theory on oil finding, they drilled near Robinson, started the heaviest land rush since Texas, and enriched themselves by $8,000,000. In West Texas in 1924, when up-and-down Benedum was close to going broke, he drilled in the shade of a rig that had been blessed in the name of Saint Rita, saint of the impossible. The impossible area was a desert of dunes and cactus, 50 miles from water. On his ninth try there, he struck it; oil came roaring in at 5,000 bbl. a day.

“Within the next 30 years,” says Author Knowles, “explorers would find almost 10 billion bbl. in its 70,000 square miles. There were more giant oil fields lying under this wasteland than would be found in any other single area in the U.S. . . . The 2,000,000 acres belonging to the University of Texas made it one of the richest universities in the world.”

Arrogant and superstitious, Harry Sinclair liked to drill in cemeteries or places where blackjacks grew, created a $700 million empire.* Haroldson L. Hunt, who now commands a $600 million empire, was a professional gambler, writes Author Knowles, who got started in oil with an Arkansas lease that he won in a poker game, struck a 15-million-bbl. field in Louisiana after a poker-playing pal had a dream that it contained oil.

Sound Leads to Science. Life in the oilfields was tough. Following each discovery came hangers-on and prostitutes, phony stock promoters, poker sharps, and battling roughnecks. In Bowlegs, Okla. “a tough braggart was cut to ribbons in a knife fight. Instead of seeking a doctor he drunkenly toured the town pointing to the blood pouring from his wounds. Still boasting of his toughness, he fell dead.”

A new era began in the 1920s. Violence passed like a bad tornado. Scientists and statisticians grew to greater importance. Probably the most important geological breakthrough came when Geologist Everette Lee DeGolyer used a reflection seismograph on the Seminole plateau, sending man-made sounds deep into the earth and gauging the echo to find “the rock beds humped up into a little dome which might be a trap for oil.” In 1930 the well blew in at 8,000 bbl. a day. “This was the most important well drilled in America since Spindletop; reflection seismograph revolutionized prospecting for oil as completely as Spindletop had done.”

Modern prospecting has matured into a science, though man has yet to find a direct method of finding oil. The chances are still long. Only one wildcat field in 42 produces 1,000,000 bbl., and costs are so steep that a million-barrel field barely pays for itself. With risks growing higher and winnings less, fears have cropped up that the U.S., with only a twelve-year known reserve, will run dry of oil. Oilady Knowles disagrees: “Ever since Edwin Drake’s discovery 100 years ago, there have been fears of a shortage. Each time the cry of alarm was raised, the explorers’ reply was a new wave of discoveries.”

*In the Teapot Dome scandal of the 1920s, Sinclair went to jail for six months for contempt of court and the Senate. Doheny was acquitted of charges to defraud the Government and sold control of his Pan American Petroleum & Transport Co. holdings to Standard of Indiana. The ironic aftermath: instead of producing 130 million bbl. as the U.S. had predicted, Teapot Dome depleted itself after 2,000,000 bbl.

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