The Power Years
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World War II and Texas Oil
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Thompson's take on the oil situation as of December, 1941
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During World War II, the old controversies surrounding Texas oil disappeared for good. The vast capacity of the East Texas field and other Texas pools was no longer a problem for the country. In fact, during the war, Texas and other oil-producing states pumped at maximum capacity. Of these states, Texas supplied 80 percent of the increase in production.
Fighting the war required oil on a scale never before produced. The Air Force alone used as much oil in one day as in all of World War I. An armored division needed 60,000 gallons a day. The amount of fuel needed to fill up a battleship’s tank could heat a single home for 500 years. Up to 10,000 gallons of oil and its derivatives (such as synthetic rubber) were used in every minute of a large air raid. With these statistics, it was no wonder that Admiral Chester Nimitz emphasized, “Winning the war is a matter of oil, bullets, and beans.” As the military’s needs soared, civilian use was strictly rationed.
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Portion of tank brigade, First Armored Division
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With German U-boats on the prowl, an alternative was needed to shipping Texas oil out of the Gulf of Mexico. Eleven oil companies joined together to build the Big Inch Pipeline, which stretched 1476 miles from the East Texas town of Longview all the way to Illinois, Pennsylvania, and New York. Completed in August 1943 after less than a year of construction, Big Inch carried more than 300,000 barrels of crude oil a day. It was joined in March 1944 by the Little Big Inch from Houston to New Jersey, which carried refined products at the rate of 175,000 barrels a day.
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Thompson's 1945 trip to the Middle East resulted in these foreign policy recommendations
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The Railroad Commission played an active role in ensuring the availability of Texas oil during the war years. Commissioner Thompson saw to it that drillers had access to steel and other materials they needed to keep pumping. The oversight of the industry was performed entirely by Texas under Texas laws. No federal control of oil ever proved necessary. As General George C. Marshall later said, "No plane failed to fly, no ship failed to sail, and no truck was ever delayed for want of oil."
In 1944, Commissioner Thompson also moved to protect Texas interests by leading the opposition to the Anglo-American oil treaty in the Middle East. This treaty would have formed a commission dominated by the major oil companies to assess post-war demand for Mideast oil and set production quotas. Thompson, along with Harold Ickes and most independents, opposed the idea of giving the majors so much control over global marketing and production. The treaty eventually failed, but the competition from Mideast oil would prove to be the shape of things to come.
Post-War Glory
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Thompson letter to Senator Lyndon Johnson on competition from imported oil, 1949
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The years following World War II were the glory years for Texas oil. With the war over, both domestic and foreign demand soared. A tremendous upsurge in exploration and drilling led to exciting new discoveries. Natural gas became profitable for the first time. The industry continued at full production to meet the needs of the Marshall Plan, the demand for fuel oil, and the enormous uptick in the number of automobiles on the road (the United States had 40 million autos on the road in 1950, versus 26 million in 1945). The start of the Korean War in 1950 also stimulated demand for petroleum. Until the 1970s, Texas would supply 35 to 45 percent of the nation's petroleum.
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U.S. oil reserves in 1950
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The industry changed to meet these demands. Rough-and-ready wildcatters and boom towns were a thing of the past. The oil industry came to be dominated by large corporate concerns, which integrated production from the wellhead to the retail outlet. Two Texas companies, Texaco and Gulf, joined the ranks of the major companies that dominated the industry in those years. The others were Standard Oil of New Jersey (Exxon), Royal Dutch Shell, British Anglo-Persian Oil Company (British Petroleum/BP), Standard Oil of New York (Mobil), and Standard Oil of California (Chevron). Together these seven companies were known as the Seven Sisters.
By 1951, Texas crude exceeded the billion-barrel-a-year mark. Five years later, Texas oil would reach its high water mark, with 21,519 wells in production.
One of the great controversies of the post-war years was control over the oil lying in the Tidelands off the Texas coast. The federal government tried to seize control of the oil, and Texas appealed the case all the way to the U.S. Supreme Court. The case was called the most serious constitutional crisis since the Civil War. The Tidelands were also historic politically. The issue was the key factor in Dwight Eisenhower’s carrying Texas in the 1952 presidential election, the first Republican ever to do so. For more about the Tidelands, visit our Portraits of Texas Governors site.
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