A BROKEN, barren, sun-baked ridge in California 5 miles wide and 30 miles long that the desert rats called Kettleman Hills has proven to be the richest oil field in the world and the greatest storehouse of wealth ever uncovered by man. There nature's oil tanks, a mile and a half underground, by 1931 had been tapped by two score wells and the flow, though restricted, could be started at any time as simply as one turns a spigot. When this was done a forbidding strip of waste land, shunned and despised a few brief years earlier, would produce riches faster than it ever came from all the gold mines of the world combined.
The Government, in the person of the Department of the Interior, observing this possibility, and having gravely and through a generation studied the wastes incident to competitive development of oil fields, thrust its often-mentioned and sometimes-commended long arm all the way out to California and pointed an admonishing finger at the humpbacked hills where the wealth lay and might be wisely used or wasted in accordance with the manner in which the situation was handled. The result was that Kettleman Hills will be developed differently, that the good accruing from it promises to be doubled, and that an example in oil-field conservation will be set up so spectacularly that all the world is likely to take notice.
In an attempt to measure this oil bonanza it may be compared to Cripple Creek, in Colorado, which reached the maximum of gold production in America from a single field in 1900, when it yielded up $18,000,000; or the famous Comstock lode, in Nevada, which in 1877 produced $14,000,000 worth of the yellow metal. When three wells had been brought in at Kettleman Hills that area was producing wealth faster than either of these gold fields at its maximum.
The Homestake mine, in South Dakota, which in 50 years has yielded more gold than any other such American property, produces about $4,000,000 annually. The average of the first eight wells to flow at Kettleman Hills was 1,000,000 barrels a year, which, with the incidental gas and gasoline recovered, was worth $4,000,000. Thus a single average well in this wonder area was as productive of wealth as is the whole Homestake region.
Yet a single well at Kettleman is but one unit in a multitude. There is room for 1,000 such wells if but one were put down on each 20-acre tract. On this basis the field would yield wealth as fast as 1,000 Homestakes.
Oil wells, the skeptic may say, are short lived. The next-door neighbor of Kettleman Hills, however, is the Coalinga field, in a similar earth wrinkle, and it has been producing for 35 years. The Midway-Sunset field, 60 miles down the valley in a similar formation, has been pouring out its wealth for 20 years and is still at it. Over in the Los Angeles area are such fields as Santa Fe Springs, studded with derricks as thick as they can stand, that have been producing for years and, with a bit of exploiting for new sands from time to time, yield ever-increasing wealth.
Mother Earth, molten in the heart of her, shrinking as she cools, here and there has made continent-long cracks in her 10-mile-thick crust. In milder moods she has merely wrinkled it as a carpet ridges when a chair is dragged across it. Just this was done in ages past in California. A group of such wrinkles fluttered for a hundred miles along the desert, sun-parched, west fringe of San Joaquin Valley. The geologists call them anticlines. Wherever they are found, they say, it is worth while to look for oil.
An anticline is not unlike a great bathtub turned upside down. The inverted tub at Kettleman Hills is 5 miles wide and 30 miles long. Ten miles up the valley another such wrinkle accounts for the Coalinga field. An equal distance to the south is the Lost Hills area and a little farther along is the famous Elk Hills Naval Reserve and Midway-Sunset field. Deep below these inverted bath tubs Mother Earth brews oil and gas out of water bugs or other forms of life that died millions of years ago. These find their way up through the porous earth, ordinarily reaching the surface and passing off into the air. Nearly all of the gas of the ages has long ago dissipated itself. Only these anticlines and kindred formations form traps that catch it as it tries to get away. Into them it may have crowded, always increasing its pressure upon itself, liquefying, rearing to go. Puncture the bottom of one of these topsy-turvy tubs and it hisses forth just as will the gas in a ginger-ale bottle if a tack is driven into its cap.
Geologists may "read the rocks" from surface indications and advise as to localities in which formations indicate the presence of oil traps. Oilmen then "ask the drill" by putting down wells. The geologists long ago pointed out the various wrinkles of the western San Joaquin. Government geologists came to Kettleman Hills 25 years ago, drew geological maps, and set it down as an oil field of the future. One after another the San Joaquin wrinkles were drilled and, with the exception of Kettleman, oil was found at depths ranging from 1,000 to 4,000 feet. As it turned out, the oil at Kettleman was too deep to be reached by the drills of that day.
The history of drilling in Kettleman Hills reveals a generation's story of the increasing depth of oil wells. In 1900 half a dozen attempts were made in this area, the wells ranging in depth from 600 to 1,000 feet, without results. In 1908 a well was sunk to a depth of 1,290 feet, but remained a dry hole. In 1910 four started down and reached depths of 2,800 feet, 3,500 feet, 4,300 feet, 4,800 feet, getting only traces of gas. Standard Oil started a well in 1919 which in thee years reached the unprecedented depth of 6,600 feet, got in a jam, and had to give it up. During the period 1924-1926 a number of wells were started, some of them going down 5,000 to 6,000 feet, encountering many oil and gas showings but nothing of value. The oil here was not in the horizons in which it was found in the related folds up and down the valley. If it existed at all it was at depths such as man, with all his ingenuity, had never been able to reach. But finally, in 1928, at an expense of $250,000, and at a depth of 7,200 feet, the discovery well was brought in.
This deep drilling for oil is one of the mechanical marvels of the age. Conceive of the drill at the tip of a string of pipe, boring its own way down though the various rock layers of the earth, refusing to be stopped by flint-hard layers hundreds of feet thick or diverted when glancing blows strike the sloping side of huge bowlders. Conceive this little tool at the end of a string of this pipe, half a mile, a mile, a mile and a half long, feeling its way, meeting emergencies, leaving behind it a pipe channel that will remain in place and carry without leakage a roaring and high pressure torrent if the exploration turns out successfully.
Eight wells at Kettleman Hills were in production two years after the first discovery well came in. They were bringing to the surface more oil and gas than the market warranted. The gas in particular was being blown off into the air. The 80 billion cubic feet of gas blown into the air at Kettleman in 1929 from half a dozen wells represented twice the power that will be generated at Hoover Dam in a similar period when that greatest of power plants is completed. Four million dollars a year in gas were being blown into the air at Kettleman from the few wells in production. Twenty-eight more wells had been driven to the top of the oil sand and were being held in readiness for production at any moment. Hundreds more could have been started on a few weeks' notice. There was already more oil above ground than the market demanded. There was no use whatever for additional gas. Oil and gas might here be turned on as though at a spigot that would paralyze the industry for the whole West. Each new well would have added to the chaos of overproduction and waste. An emergency existed.
The Department of the Interior had seen this situation developing. Considerable responsibility rested on it, for the public domain was in its care and almost half the land here was Government owned. The oil and gas under the privately owned land, as a matter of fact, was a natural resource deserving to be conserved. It was just as foolish to throw away a billion dollars' worth of natural gas, tucked snugly away in this underground tank, as it would be to throw away a billion dollars' worth of sugar in a warehouse.
Yet other oil fields had been wasting similar billions all the time. The set-up of oil-field development was such that it led to a preventable waste of half the wealth discovered. We had been going along through these mad oil decades getting one dollar out of these fields where we might have had two.
This oil field could be allowed to develop helter-skelter or it could be considered as a whole and developed as a unit. Under this latter plan the oil would not be produced until the market was right. It would not be produced until a market be found for the gas. Kettleman Hills, operated on this basis, should produce twice its ultimate return on the old method. The difference was worth saving. Under such operation the established oil structure would escape the wasteful production. A spectacular precedent might be established that would be followed elsewhere.
The organization of the property holders in Kettleman Hills was attempted. Far-seeing companies operating there, with the department's cooperation, undertook the task. The Government owned nearly half the land but had leased it for development. Almost half been given in land grants to the Southern Pacific Railroad, which had held it for 50 years and, just before this discovery, had sold it to the Standard Oil of California. The Government could exert certain pressure on its lessees. Standard saw the advantages in deliberate production. But fragments of Government land and railroad land had gone into private ownership. These individuals were likely to want to tap their wealth right away. They may have been waiting for 30 years and wanted a taste of wealth before they died. Yet if they drilled any scheme of conservation would be upset, for everybody else would have to do the same. The task was to bring all into agreement.
Negotiations went on for a year and a half. Innumerable obstacles were overcome. Special permissive legislation was put though Congress. A State law prohibiting the production of oil until the gas coming up with it can be used had gone into effect in California. The oil industry added its favorable pressure to that of State and Nation. Dissenters who had insisted on wrecking the scheme were dissuaded. Certain land and lease holders about the fringe of the field remained obdurate, insisted on independent production, and caused the results to be less than complete. Quite comprehensive agreements, however, finally were signed. Thus unit operation sufficiently complete to furnish an impressive object lesson was brought about.
The result will be a systematic, economical, and unhurried development of the heart of the field that its entire wealth may be conserved and ultimately used. Oil and gas will be produced in the unified area only as it is needed. Gas sufficient to supply California for two generations will be saved instead of escaping into the air. The oil and gas market will remain undisturbed from this source. The field will produce in the long run twice the wealth that it would under competitive development. The different areas will be operated by corporations established for the purpose. The proceeds will be divided among those interested in proportion to their holdings in acres. A model plan for oil-field operation and conservation will be presented to all the world in a way so striking that it can not escape notice. The result may be the development of a method that will greatly increase the span of years during which those most convenient of fuels, oil and gas, may be available to multitudes of people all around the world. The engineers and company executives who have brought this result about by voluntary action are pioneers in a new era of cooperation. Compare their achievement with the demoralization forced on the industry by the unrestrained flood of oil from the east Texas field, finally controlled only by martial law.
Last Updated: 20-Jul-2009