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Pet-ro-chem-i-cal: Any chemical derived from fossil fuels. End products include gasoline, diesel, aviation fuel, pesticides, herbicides, fertilizers, plastics, asphalt, synthetic fibers, pharmaceutical components, etc.
Oil was first discovered in Texas in 1543 by Luis de Moscoso, a survivor of the De Soto Expedition. He noted in his journal that he observed oil floating on the surface of the ocean, and that he gathered it up and used it to calk his vessels. Thereafter, it was common for settlers and visitors to Texas to note seepage of oil on land and water in their letters and journals. However, it was not until after the Civil War, when the demand for kerosene and other petroleum products increased, that drilling for oil in Texas took on new meaning.
 Before the discovery of oil, Houston’s economy was largely based on agriculture and ranching. Cattle, cotton, timber and rice were overshadowed by the discovery of oil at Spindletop in 1901. Houston became synonymous with oil and money nearly overnight. Vast fortunes were made in oil and Houston quickly gained financial power, surpassing San Antonio and Galveston in size and importance. Houston’s rise from a small backwater settlement to a prosperous metropolis of international significance took little more than a century and a half. Houston was no boomtown, however, the oil and petrochemical industry had a huge impact on the city’s growth and significance.
In 1899, the Texas Legislature began to realize the tremendous natural resources they were sitting on. Understanding the potential for exploitation of the land for profit, with little consequence for the environment, the Legislature passed the first regulatory statute regarding drilling for oil. The new laws addressed the issue of protection of groundwater, the abandonment of wells and the conservation of natural gas. Then came the boom.
Black Gold
Texas was in the midst of an oil drilling frenzy. By 1905, the Texas government started taxing oil production and oil became an important source of pubic revenue. In 1919, the State of Texas profited $1 million from oil production. By 1929, profits had increased to $5.9 million. Oil was king and the nouveau riche Texas oil man was the envy of a nation.
Industrial development was booming, the economy was prospering and towns and cities founded on oil sprung up around the state. Oil and gas production offered employment to share croppers who left the land and began migrating with the oilrigs. A common sight across Texas at that time was Model A or Model T Fords loaded down with boxes of household goods, mattresses strapped to the roof, mom and dad in the front and all the kids crammed in the backseat traveling from hotspot to hotspot following the oil.
The Great Depression hit Texas like it did everywhere else in the country. However, the effects were less harsh in Texas due to the prosperity of the oil and gas industry. During the Depression, Houston’s economy was relatively stable and not one bank failed.
Boomtowns sprang up all over the state with all the vice imaginable – moonshiners, gambling halls, prostitutes, brothels – all ready to tempt hard earned dollars from oil field workers. Across the entire state of Texas, oil gushers and drilling rigs were replacing Longhorn cattle as a symbol of the Lone Star State.
 Build It And They Will Come
By 1870, Houston’s population topped 9,000 but it was still third in significance behind San Antonio and Galveston. Although it had a major steamboat and railway terminus, it was 50 miles inland. It’s prime location was not fully realized until after the devastation of the Galveston Hurricane in 1900, when thousands lost their lives and hardly a building on the island was left standing.
After the Galveston Hurricane left Galveston’s port in ruins, local bank presidents, railroad executives, ship building CEOs, freight forwarders, packers, union leaders, importers, and exporters all put their heads together and decided that Houston was a much safer place to build a port than Galveston Island had been. Houston was readily accessable to the Gulf of Mexico but better protected from the kind of devastation Galveston Island had suffered.
In November of 1914, President Woodrow Wilson pushed a button in the White House, which fired a cannon by remote in Houston, and the Port of Houston was officially open for business. This was a major blow to Galveston, who until then, had been known as the “Wall Street of the South.” As soon as the Houston Ship Channel opened in 1914, it began attracting oil refineries. The Port of Houston’s greatest asset was its location.
The first petrochemical plant was built along the Houston Ship Channel in 1918. During WWI, the U.S. government turned to Houston to supply the oil and fuel it needed for the war effort. The building of petrochemical plants along the Houston Ship Channel to produce synthetic rubber and other strategic materials for the military prompted the industry’s biggest growth trend in history.
Again, during WWII, the military called upon Houston’s petrochemical industry to supply the U.S. Armed Forces with necessary materials. After WWII ended, the growth of the petrochemical industry along the Houston Ship Channel flourished as a result of the profits to be had in manufacturing the by-products of oil exploration. Despite the occurrence of oil and gas in almost all parts of Texas, most of the states’ petrochemical plants were built along the Houston Ship Channel, where low cost water transportation was available. Pasadena, La Porte, Baytown and Deer Park became major centers of development in Texas’ petrochemical industry.
The manufacturing of petrochemicals is done in several phases and often in different plants, which are connected by several thousand miles of pipelines. The “Spaghetti Bowl” is a term used to describe the approximately 200 elaborately interconnected petrochemical complexes that have been built along the Houston Ship Channel.
Bust
All good things must end. The oil boom in Texas was no exception. Through the 1960s, 1970s and on into the early 1980s, Houston was riding high on the profits from oil. Houston had become a one-industry town. Companies expanded, venture capitalists were having a hey-day, and Houston’s wealth and extravagance attracted many newcomers who flocked to the city in hopes of finding their fortunes. Then, the bottom fell out.
Projections had been too optimistic. By 1983, the world economy had declined. While Texas was booming, the development of fuel substitutions and conservation efforts had reduced the demand for oil. Then, the price of oil declined sharply. Businesses failed, real estate prices went through the floor, and hundreds of banks across the state went bankrupt. Tens of thousands of workers were laid off, and Texas was headed for a major recession.
During this time, only the petrochemical industry came out unscathed. In fact, the petrochemical industry prospered. Lower oil prices allowed petrochemical refineries to increase production and expand operations. While the rest of Texas was on the downhill slide from Spindletop, the petrochemical industry along Houston’s Ship Channel was thriving.
Into the Future
Since oil was first discovered at Spindletop in 1901, 48 percent of Houston’s economy has been energy related. Even during the oil bust of the 1980s and the recession of the 1990s, oil and natural gas related technology, expertise, and resources remained in Houston meeting national and international needs.
Today, Houston is one of the world’s largest manufacturing centers for petrochemicals. The Port of Houston is home to a $15 billion petrochemical complex – the largest in the nation and the second largest in the world. The Houston Ship Channel houses 40 percent of the nation’s petrochemical manufacturing plants, with the capacity to produce 3,853 million barrels of refined petroleum products per day. • |
