Sparks

The Gulf of miracles

 By David Bartlett

Houston and New Orleans, the key players in the United States climb in the world rankings for crude oil production, have benefited immensely from the proceeds of the great energy boom in the Gulf of Mexico. This marine area of over 600 square miles, which stretches from Florida to Mexico has become the international hub of the oil dream, as demonstrated by our infographic. Both are among their country’s great urban cultures, thanks in part to the support of patrons whose fortunes prospered in the shadow of the oil fields…

The gallons of the “oil capitals” have conquered the fields; but not by chance. Why? Because they are the key players of the energy history of the Gulf Coast. A story originating from an uncontrolled release of crude oil from the Spindletop oil field, in Beaumont, Texas, discovered in 1901 and capable of producing 100,000 barrels of oil per day. It took nine days to secure the well, but the struggle was worth it; it produced a business that would dramatically alter the country’s economic and energy fortunes.

There was no lack of money for investments, the risks were calculated, economic fortunes were accumulated and then dispersed, but here was an opportunity to exploit a product that would favor the development and widespread distribution of cars and that could be used to heat homes and for many other uses that we currently take for granted but which, at the time, were proposed as innovative. A transformation that promised to be important not only for the United States, as it heralded the creation of an industry that would soon become global and that would lead, as a first consequence, to the development of resources in the Gulf of Mexico.

Historical photo: Spindletop, Beaumont

Let’s define the historical context. We are in an era dominated by very wealthy men, including H. Roy Cullen, H.L. Hunt, Sid Richardson and Clint Murchison. H. L. Hunt was an oil tycoon. He traded poker winnings for oil rights and, for one million dollars, won a large part of the East Texas Oil Field, one of the largest oil fields in the world. He married three different women and had many children. Precisely due to his lifestyle, he is said to have inspired the television series Dallas, whose character J.R. Ewing reflected the public’s perception of Hunt. At the time of his death, he was one of the richest men in America.

Houston, Skyline (imagine by www.qz.com)

Immersed in an environment dotted with large resources, Houston is known worldwide for the energy and petrochemical industry that has become its hallmark: a center of excellence where several refineries and transport companies are gathered, all linked to the oil industry. Houston is the fourth largest city in the United States and, although oil plays a central role in the local economy, the city also plays an important role in other sectors, including biomedical research, aeronautics and renewable energy sources such as solar and wind power.

The latter, for example, covers almost 10% of Texas’ electricity needs. It’s a thriving port:  one of the 10 largest in the world; the busiest in the world in terms of tonnage of foreign origin; and the second port in the United States in terms of total tonnage. Proof of the economic wellbeing that oil has given Houston is reflected in the cultural heritage that the city can boast. Houston is one of the few U.S. cities that includes stable professional companies in all major performing arts. Good cultural institutions of course require money, and, not surprisingly, this often comes in the form of donations and support from supporters involved in or related to the oil industry.

Houston includes stable professional companies in all major performing arts...

A key figure in the development of Houston’s cultural wealth in the twentieth century was Ima Hogg, whose devotion to the arts and to the people of her state earned her widespread admiration. Daughter of then Governor of the state, James Hogg, also known as “Big Jim,” She became extremely wealthy when oil was discovered on her family’s plantation and subsequently devoted her wealth and life to creating philanthropic works, connected to both the world of art and aimed at improving the conditions of public welfare. Ima became an avid art collector of prime importance for the time, collecting works by Picasso, Klee and Matisse, among others, then donating them to the Museum of Fine Arts in Houston.

Ima Hogg, the "first lady" of Texas

New Orleans is unquestionably synonymous with Dixieland jazz, the city’s unique to global musical culture. Louis Armstrong was perhaps the most famous jazz musician out of the Big Easy, although his music was strongly influenced by the years he spent in Chicago. New Orleans is also known for Mardi Gras, a wild celebration on the days leading up to Ash Wednesday. Huge floods of people pour into the streets of the city for a riotous celebration.

Like Houston, New Orleans is close to the Gulf of Mexico, and its many offshore oil platforms. It has 19 refineries that can produce 2.8 million barrels per day, a figure that places the city near the top of the national oil rankings, second only to the entire state of Texas.

The whole of Louisiana is rich in oil and natural gas and has many deposits, both offshore and onshore. Moreover, vast oil and natural gas reserves are present offshore along the outer continental shelf, which falls under federal administration. Historically, Louisiana holds a record with respect to oil production. The world’s first drilling site was in fact created in Caddo Lake, in the northwestern corner of the state. The oil and gas industry, as well as the vast entrepreneurial activities that support it, especially as regards transport and refining, have dominated the state’s economy since the ‘40s.

New Orleans was founded precisely to provide a strategic center, a key logistics hub and a distribution center for trade by water. The city’s port is the fifth largest in the United States in terms of cargo handled, the second largest in the state after the Port of South Louisiana (the largest port in the world in tonnage volume) and the twelfth in terms of load value in the entire U.S. Moreover, many shipyards, shipping companies, logistics companies, shipping firms and brokerage companies are based in the metropolitan area of New Orleans or retain a solid local presence.

Over the city’s recent history lies a very dark shadow, named Katrina. This disastrous hurricane, which occurred in 2005, was one of the five worst  in the country’s history. It killed over 1,200 people and caused $108 billion worth of damage. New Orleans paid the highest price in terms of lives and property damage due to the failure of the levee system designed to protect the city from floods. The storm caused around 20 breaches in the dams and bulkheads; experts consider it the worst engineering disaster in the country’s history. In two days, 80% of New Orleans was flooded and some parts of the city were covered by approximately 5 meters of water.

The storm caused an interruption in the production, importation and refining of oil. Before the hurricane, one-tenth of the crude oil consumed in the U.S. and approximately half of the gasoline produced in the country came from refineries located along the coasts of the Gulf. Power outages caused distribution problems, since the gas pipelines were out of use due to pumps having shut down. 20 offshore oil platforms were lost, sank or drifted away. Shell’s Mars platform, which produced approximately 147,000 barrels of oil per day, suffered severe damage. This was an event that devastated a significant part of the U.S. economy, and helped many understand as never before that oil production in the Gulf, despite the enormous advantages it offers the country and world, involves natural risks that must always be kept in mind.

 

TROPICAL OIL – A GULF OF MEXICO INFOGRAPHIC

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about the author
David Bartlett
He is a freelance journalist living in Los Angeles. For many years he was a book publisher, first at Random House in New York City and afterwards as the Director of Temple University Press in Philadelphia. He is a past President of the American Association of University Presses.