Oil and Gas

George H. Bissell, a New York lawyer, was largely responsible for the drilling of the well that started the petroleum industry in the United States. Bissell acquired some land that had oil seepages, on Oil Creek near Titusville in western Pennsylvania. He was one of the organizers of the Pennsylvania Rock Oil Company, which was later reorganized as the Seneca Oil Company. The well on Bissell’s land was drilled by the Seneca Oil Company.

The man who planned and supervised the drilling was Edwin L. Drake. He erected a wooden tower, or derrick, which was used to lower and raise the drilling tools. After cave-ins of the well occurred, he lined the well with sections of pipe. As the well was drilled deeper, the pipe was driven downward and kept the sides of the hole from caving in. This was a major contribution to the technique of drilling, and it is still a standard practice. In August 1859, Drake’s well struck oil at a depth of 69.5 feet. The well flowed at a rate of 8 to 10 barrels per day, and crude oil was then selling at $20 per barrel.

Natural gas reserves were first discovered in the United States in the early 1810s, when salt well drillers accidentally tapped into pockets of natural gas. However, it took 40 years before natural gas’s potential began to be realized as a fuel for lighting and heat for homes, and the first deep natural gas well was drilled in 1854.

The first commercialized use of natural gas occurred before oil became an important resource. The first business to offer natural gas to customers started sometime around 1785 in Great Britain, when natural gas companies used coal to generate the gas used to light houses and streetlights. It took more than another 30 years for natural gas to become commercialized in the United States. This occurred in 1816, when natural gas was used to light the streets of Baltimore, Maryland.

At the time, oil was primarily used to make kerosene, which was then used to fuel lamps. It wasn’t until the 1900s, when cars became more widely used, that oil’s primary use was switched to fuel for automobiles, and later planes and ships.

With the development of the automobile, the demand for gasoline grew dramatically. World War II further increased society’s dependence on gasoline and other petroleum products by creating a demand for fuel for tanks, ships, and other wartime vehicles. This stimulated the need for exploration of oil wells across the country. After the war, surplus oil was used in the development of gas-powered farm vehicles and machinery. Refineries also produced petroleum derivatives to be used for synthetic rubber, medicinal oils, and explosives. In the early 1950s, petroleum overtook coal as the largest energy source in the United States. This trend continued until the mid-1960s. During its period of growth, the oil industry’s primary goals were pursuing the development of new drilling areas and increasing the speed at which oil could be shipped from existing fields. By the 1970s, the demand for oil had increased to the extent that Western nations could no longer supply enough to meet their own needs and were forced to import it from Middle Eastern countries and nations in Africa and South America. To control the quantity and the price of oil being sold, these countries formed a cartel, known as the Organization of Petroleum Exporting Countries (OPEC), founded in 1960. OPEC became one of the major influences on the world economy during this period. To combat the influence of OPEC, Great Britain, the United States, and other oil-producing countries increased domestic production in order to reduce the world’s dependence on oil from OPEC member nations. OPEC was forced to reduce prices and lost some of its control of the oil market.

Throughout the 1980s and 1990s, the U.S. government deregulated the natural gas industry. The result was a surge in the number of companies offering gas for sale directly to consumers. The end users were able to save 20 percent to 30 percent on their gas bills, depending on their usage.

In the early 21st century, strong demand from a growing U.S. population, reductions in domestic oil exploration and production, and regional conflicts in oil-producing countries such as Iraq caused a significant increase in the price of petroleum. To address this crisis, the U.S. government set a goal of increased domestic production, as well as encouraged energy conservation and the development of renewable energy resources.

Today, the U.S. petroleum industry continues to explore economical oil exploration and production methods to meet the energy needs of the U.S. population. At the same time, the natural gas industry is working to meet increasing environmental regulations concerning fracturing as well as overcome growing public concern over this extraction method. New technology has allowed energy companies to tap into previously inaccessible sources of oil and gas.

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