At 10:30 on the morning of Jan. 10, 1901, on a low hillock called Spindletop just outside Beaumont, Texas, gas rumbled out of its prehistoric tomb, shot up a black plume of petroleum and launched the oil age. The heavy oil spouted 200 feet into the air in the greatest gusher Americans had ever seen. Men saddled their horses and rode off, shouting: "Oil, oil on the hill." As one of the men passed 38-year-old Pattillo Higgins, he reined in, yelled: "People are saying you're the wisest man on earth. Hell, ain't you surprised?" "Not exactly." replied Higgins.
The Turning Point. Few had listened to Pattillo Higgins' theory that Spindle-top's escaping gas and foul water indicated oil. The experts had scoffed in a body. At the time, America's 58 million annual barrels of oil came from the east, mainly Pennsylvania. John Archbold, one of the lords of John D. Rockefeller's Standard Oil monopoly, had snorted that he would drink every gallon of oil produced west of the Mississippi. Calvin Payne, Standard's production genius, conversant with fields from Baku to Borneo, had come to Spindletop and warned: "You will never find oil here." The U.S. Geological Survey agreed with Standard's Calvin Payne.
"Ignorant men in high places," snorted Higgins, as he kept on looking. In 1892. promising "millions," he persuaded three fellow Beaumonters to back him, but all he returned was three dry Spindletop holes. He became the town bore. Beaumont residents sneeringly called him "the millionaire." Desperate for a believer, Higgins advertised in a New York trade journal the glowing promise of oil, gas and sulphur in Spindletop, and flushed one reply. It was enough. Dalmatian-born Anthony Lucas, one time Austrian naval lieutenant who came to the U.S. to visit and stayed on to work as a mining engineer, agreed to drill for oil on Spindletop.
That was a turning point in the history of the U.S. economy. The first Spindletop gusher transformed the U.S. oil business from a tight little enterprise hobbled by the Standard Oil monopoly and near-exhausted wells (each pumping an average 10 to 50 barrels daily) into an enterprising giant. That first well alone turned out as much oil as 37,000 eastern wells combined, and by year's end production of Spindletop's 138 wells more than equaled that of the rest of the world. Before Spindletop, Russia was the world's No. 1 producer; afterward, the U.S. took the lead it has never since lost.
Spindletop took petroleum out of lamps and lubricants, put it into gas tanks and made it a source of cheap power. It cracked the coal's monopoly grip on fuel and Standard's grip on oil. Before Spindletop, Standard directly controlled 83% of America's annual 58 million barrels; a year later it was just another competitor. Spindletop gave birth to the entire Texas oil industry and to two of its giants: Texaco and Gulf Oil.