Daniel sent us this one — he's asking how Texas became synonymous with oil and gas. Not just the history, but the mechanism. Why Texas and not, say, Pennsylvania where it all started? What made the identity stick? And he wants to know if it's still true today or if we're just coasting on a century-old reputation. Honestly, it's one of those questions where the obvious answer is Spindletop, but the real story is way stranger.
And by the way, today's episode is powered by DeepSeek V four Pro writing our script. Which feels appropriate for a topic about drilling deep into things.
I see what you did there. I don't approve, but I see it.
Here's the thing most people get wrong about Texas and oil. They think it started with Spindletop in nineteen-oh-one, and that's the whole story. But Texas was an oil state before Spindletop. The first producing oil well in Texas was drilled in eighteen sixty-six near Nacogdoches, in East Texas. It was a modest well, nothing like what came later, but it was there. By eighteen ninety-five, Corsicana had a real oil field — the first commercially significant one in the state. They were refining it locally, using it for lighting and lubricants. Spindletop didn't invent Texas oil. Spindletop invented the idea that oil could make you unthinkably rich overnight.
Pennsylvania had the first boom with Drake's well in eighteen fifty-nine, and then places like Ohio and West Virginia had their moments. What made Texas different? Because Pennsylvania isn't what you picture when someone says oil.
Scale and geology, mostly. Pennsylvania's oil fields were relatively small and shallow. The Appalachian Basin is a complicated, fractured mess of a formation. You'd drill a well, get some production, and it would peter out. Texas sits on fundamentally different geology — massive sedimentary basins, especially the Permian Basin in West Texas and the Gulf Coast salt domes. These are enormous, continuous structures that hold staggering amounts of hydrocarbons. The Permian Basin alone covers something like eighty-six thousand square miles. That's bigger than the entire state of Kansas.
Wait, the Permian Basin is bigger than Kansas?
The whole basin, yeah. The producing part in Texas and New Mexico is about eighty-six thousand square miles. Kansas is about eighty-two thousand. So the geological endowment is just on a different scale than anything in Pennsylvania or Ohio. But geology alone doesn't make a place synonymous with an industry. There's a cultural and regulatory story here that's just as important.
Walk me through Spindletop. I know the broad strokes — January tenth, nineteen-oh-one, a geyser of oil shooting a hundred feet in the air, the whole Beaumont area goes insane. But what actually happened that day, and why did it change everything?
The location was a salt dome just south of Beaumont called Spindletop Hill. People had known there was oil seepage there for years — you could literally smell it. A mining engineer named Pattillo Higgins had been convinced for years that there was a massive oil reservoir beneath that salt dome, but nobody believed him. He eventually partnered with a Croatian-born engineer named Anthony Lucas, and they brought in a new kind of rotary drilling rig that could go much deeper than the old cable-tool rigs.
Lucas struck something.
On January tenth, nineteen-oh-one, at about eleven hundred feet, the well blew. And it wasn't a controlled blowout — this was a violent, uncontrolled gusher that shot oil more than a hundred feet into the air. It took nine days to cap it. In those nine days, it was spewing an estimated eighty thousand to a hundred thousand barrels per day. To put that in perspective, the entire daily production of the United States at that time was about a hundred and seventy thousand barrels. One well doubled the nation's output.
That's insane. So the economics of oil just completely rewrote themselves overnight.
Before Spindletop, oil was mostly a lighting and lubricants business. Kerosene for lamps, grease for machinery. Gasoline was basically a waste product that refineries would sometimes just dump into rivers. After Spindletop, the sheer volume of cheap crude made it economically viable to think about oil as a fuel for transportation and industry. The price of oil cratered from about two dollars a barrel to three cents. It was cheaper than water in some places.
Which is where the Texas identity starts to form, right? This idea of the wildcatter, the independent operator who risks everything on a hunch. The sudden wealth.
It wasn't just a myth. Between nineteen-oh-one and nineteen-ten, something like five hundred oil companies were chartered in Texas. Some of them became giants — Gulf Oil, Texaco, what became Exxon's predecessor companies. But most of them were tiny, speculative operations run by people with more guts than sense. That culture of independent risk-taking became baked into the Texas self-image in a way it never did in Pennsylvania or Oklahoma.
Oklahoma had its own booms, though. Glenn Pool, Osage County. Why didn't Oklahoma become the shorthand for oil the way Texas did?
A few reasons. First, Texas just had more of everything — more fields, more production, more sustained output. But the bigger reason is the Railroad Commission of Texas.
The Railroad Commission. Which, famously, has nothing to do with railroads.
It started with railroads. It was created in eighteen ninety-one to regulate railroad freight rates and prevent monopolistic practices. But in nineteen seventeen, the Texas legislature gave it authority over oil and gas pipelines. Then in nineteen nineteen, it got jurisdiction over oil and gas production itself. And by the nineteen thirties, the Railroad Commission was effectively setting global oil prices.
Explain that mechanism, because that's the part that always sounds like a conspiracy theory. How does a state regulatory body set global prices?
Here's what happened. In nineteen thirty, a wildcatter named Dad Joiner — real name Columbus Marion Joiner, but everyone called him Dad — discovered the East Texas Oil Field. And this field was monstrous. Forty-five miles long, five to ten miles wide, holding something like five billion barrels of recoverable oil. It was the largest oil field in the contiguous United States ever discovered. And when it came online, everyone drilled at once. The price of oil collapsed to as low as two cents a barrel.
Which is great if you're buying oil, but catastrophic if you're selling it.
Texas was selling it. The state's entire economy was getting wrecked by its own success. So in nineteen thirty-one, the governor declared martial law in the East Texas field and sent in the Texas National Guard to shut down production. The Railroad Commission was given the authority to set production limits — prorationing orders — for every well in the state. The idea was to match supply to demand and stabilize prices.
The National Guard shutting down oil wells. That's wild. You don't think of Texas as a place that sends in troops to stop business.
It was desperate times. But here's where it gets globally significant. The East Texas field was so large that whatever the Railroad Commission decided directly affected world oil prices. And the Commission was setting production levels based on market demand forecasts. So effectively, a state regulatory agency in Austin was managing the global oil supply. When OPEC formed in nineteen sixty, its prorationing system was explicitly modeled on the Texas Railroad Commission. They copied the mechanism.
Texas didn't just produce oil. Texas invented the regulatory architecture that governs global oil markets to this day. That's a much bigger claim than just "they had a lot of wells.
It's one of those things that cuts against the Texas self-image. Texas loves the myth of the freewheeling wildcatter, the rugged individualist striking it rich. But the reason Texas oil survived long enough to become an identity was aggressive government intervention. The Railroad Commission was one of the most powerful economic regulatory bodies in the world for about forty years. It wasn't free markets. It was managed markets.
That tension between the mythology and the reality seems like it's at the heart of this. The mythology is all about independence and risk-taking. The reality is that the state stepped in and managed production to keep the industry from destroying itself. And both things are true — the wildcatters were real, and the regulation was real.
There's a third layer. The cultural export. Texas didn't just produce oil — it exported the image of the Texas oilman. After World War Two, you had this wave of Texas oil wealth reshaping American culture. The Hunt brothers, H.Hunt in particular, became the archetype of the right-wing oil billionaire. The TV show Dallas, which started in nineteen seventy-eight, broadcast the image of the Texas oil family — the Ewings — to the entire world. By the nineteen eighties, if you said "oil" to someone in Tokyo or London or Buenos Aires, they pictured a man in a Stetson in Texas.
Hollywood ran with it. Giant in nineteen fifty-six, with James Dean and Rock Hudson. There Will Be Blood, which is loosely based on California's oil history but everyone assumes is Texas. The whole aesthetic — the flat, dusty landscape, the pumpjacks, the sudden wealth, the big cars.
There's a great line from the historian Walter Prescott Webb. He said that the oil industry created a new kind of Texan — not the cowboy or the farmer, but the oilman, who combined the cowboy's risk-taking with the industrialist's scale. And that figure captured the American imagination in a way that, say, the Oklahoma oilman or the Louisiana offshore roughneck never quite did. Texas had the narrative.
The narrative had material backing. The Permanent University Fund, which funds the University of Texas and Texas A and M systems, was built on oil and gas royalties from state lands. We're talking about tens of billions of dollars in assets. The discovery of oil on university lands in West Texas in nineteen twenty-three essentially created the financial foundation for the entire Texas public higher education system.
The Santa Rita number one well, on University of Texas lands in Reagan County. Brought in nineteen twenty-three. The story goes that the well was named after the patron saint of impossible causes, because everyone thought drilling in West Texas was a fool's errand. It produced for something like sixty years. And the royalties from that well and the fields that followed built an endowment that now rivals the Ivy League. As of a few years ago, the Permanent University Fund was worth over thirty billion dollars. That's oil money directly funding education.
Which brings us to the modern question. Daniel's asking if it's still true today. Is Texas still synonymous with oil and gas, or is it a legacy identity? Because the state's economy has diversified enormously. Tech in Austin, healthcare in Houston and Dallas, defense, finance. Oil and gas isn't even the largest sector anymore.
It depends on how you measure it. Direct employment in oil and gas extraction is relatively small — maybe two to three percent of the state's workforce. But the indirect effects are enormous. The Texas Petro Index tracks upstream activity, and even with the volatility of the last decade, the industry's footprint on manufacturing, logistics, professional services, and real estate is massive. Houston is still the energy capital of the world. When oil prices spike or crash, you feel it in every corner of the Texas economy.
The Permian Basin is having a second life. Hydraulic fracturing and horizontal drilling unlocked enormous amounts of tight oil that were previously uneconomic. went from being a net importer to the world's largest oil producer, and most of that growth came from the Permian.
The numbers are staggering. In twenty eighteen, the Permian Basin was producing around three point five million barrels a day. By twenty twenty-four, it was over six million barrels a day. That's more than most OPEC countries produce. The United States as a whole is producing something like thirteen million barrels a day, and the Permian alone accounts for nearly half of that. So Texas is not just still in the oil business — it's the single most important producing region on the planet right now.
Yet the identity question is trickier now. Because the industry is less visible. The pumpjacks are still there, but they're increasingly automated. The roughneck jobs that built the mythology have been replaced by skilled technicians monitoring computer screens. The office towers in Houston are full of geologists and data scientists and finance people. It's a white-collar industry doing blue-collar cosplay.
That's a sharp point. The mythology is rooted in physical labor and risk — the guy on the drilling floor, the wildcatter betting his farm. The reality is that modern oil and gas is a technology industry. The shale revolution was enabled by advances in seismic imaging, directional drilling, and data analytics. The Permian Basin today is as much a triumph of software as it is of geology. And that's harder to romanticize.
There's also the political dimension. Texas's political identity is intertwined with oil in ways that are genuinely unique. The oil depletion allowance, which lets producers deduct a percentage of gross income from taxable income, was a huge political fight for decades. It was seen as a special-interest giveaway by critics and as an essential incentive by supporters. Texas politicians — from Sam Rayburn to Lyndon Johnson to George H.Bush — were deeply involved in shaping federal oil policy.
The Railroad Commission, which we talked about, was a political powerhouse. Getting elected to the Railroad Commission was a launching pad for higher office in Texas for decades. The commissioners were basically celebrities in the oil patch. They controlled who could drill and how much they could produce. That's enormous power. It wasn't until the nineteen seventies that federal energy policy and global markets really started to erode the Commission's dominance.
If I'm Daniel, sitting in Jerusalem, and I ask why Texas became synonymous with oil and gas instead of some other place, my summary would be: geology gave it the resource base, Spindletop gave it the spectacle, the East Texas field gave it the scale, the Railroad Commission gave it the regulatory muscle to stabilize the industry, and Hollywood gave it the global image. Is that about right?
I'd add one more piece. Texas's biggest oil discoveries happened just as the automobile and the military were becoming the dominant consumers of petroleum. The nineteen twenties and thirties saw the mass adoption of cars. World War Two made oil a strategic resource of the highest order. Texas was the arsenal of democracy in terms of fuel. The petrochemical industry that grew up along the Gulf Coast — refining crude into plastics, synthetic rubber, and chemicals — was directly tied to wartime demand and then postwar consumer growth. Texas wasn't just an oil producer. It became the center of the entire hydrocarbon value chain.
That value chain created an ecosystem. You don't just have drillers. You have pipeline companies, refineries, chemical plants, equipment manufacturers, service companies, law firms specializing in mineral rights, banks that understand oil and gas lending, universities with petroleum engineering programs. Once that ecosystem exists, it's self-reinforcing. Even if you discover oil somewhere else, the expertise and the capital and the supply chains are in Texas.
Houston was a midsize regional city before oil. By the nineteen seventies, it was the fourth-largest city in the country. The skyline downtown was built by oil companies. The Texas Medical Center, the largest medical complex in the world, was funded in significant part by oil fortunes. Rice University's endowment was built on oil. The Houston Symphony, the Museum of Fine Arts — oil money built the cultural infrastructure of the city.
Which brings up the philanthropy angle. The oil barons were complicated figures, but many of them were committed to building institutions. Sid Richardson, H.Hunt, the Bass family in Fort Worth. They funded universities, hospitals, museums. There's a civic legacy that goes beyond the industry itself.
That's part of why the identity stuck. In a lot of resource boom regions, the wealth gets extracted and spent elsewhere. The classic resource curse — you see it in parts of Africa and the Middle East. But Texas oil wealth was reinvested locally on a massive scale. The families stayed, built institutions, competed with each other in philanthropy. That created a durable civic identity tied to oil even as the industry's direct economic share declined.
Where does this leave us now? The energy transition is real. Electric vehicles are gaining market share. Renewables are growing. Is Texas going to become the next coal country — a place defined by an industry in structural decline?
I don't think so, and here's why. First, oil demand isn't actually declining yet globally. It's still growing, albeit more slowly. The International Energy Agency projects peak oil demand sometime in the twenty-thirties, but that's a projection, not a certainty. Second, natural gas is going to be needed for decades as a transition fuel, and Texas is also the largest natural gas producer in the country. Third, and most interestingly, Texas is becoming a leader in the new energy economy too.
Wind and solar. West Texas is one of the best wind resources on the planet.
Texas produces more wind energy than any other state by a huge margin. Something like twenty-five percent of all wind power in the United States comes from Texas. If Texas were a country, it would rank in the top five globally for installed wind capacity. The state's competitive electricity market, combined with its transmission infrastructure buildout in the two thousands, made it incredibly attractive for wind developers. And now solar is booming too. The same wide-open spaces and abundant sunshine that made West Texas good for oil rigs make it good for solar farms.
The thesis is that Texas isn't an oil state so much as it's an energy state. The identity is about energy production, not specifically hydrocarbons. And that identity can survive the transition.
That's the optimistic case. The pessimistic case is that the political and cultural identity is more brittle than the economic one. If you define Texan-ness in terms of oil, then a transition away from oil feels like an existential threat. You see this in the political rhetoric around energy policy. There's a defensiveness that goes beyond economics. It's about identity. And identities don't update as quickly as electricity grids.
There's also the question of whether the new energy economy creates the same kind of cultural identity. Wind turbines and solar panels don't have the romance of the gusher. There's no wildcatter myth for the renewable age. It's utility-scale infrastructure, mostly owned by large corporations and investment funds. The wealth doesn't concentrate in the same way, and it doesn't create the same local economic multiplier effects. You don't need a Houston if you're building wind farms.
That's a real point. The oil industry created dense networks of high-paying jobs — geologists, engineers, rig workers, pipeline welders, refinery operators. The renewable energy industry creates jobs too, but they're different. More distributed, often lower-paying, and the manufacturing is often overseas. The economic geography of energy is changing, and Texas is going to have to navigate that.
If anyone can do it, it might be Texas. The state's regulatory environment is famously business-friendly, which is why wind developers flocked there in the first place. The same transmission infrastructure that moves electricity from West Texas wind farms to Dallas and Houston was built under a Republican governor, Rick Perry, who understood that energy is energy. There's a pragmatism beneath the political posturing.
The human capital is transferable. Petroleum engineers understand subsurface geology, fluid dynamics, and complex project management. Those skills apply to geothermal energy, carbon capture and storage, hydrogen storage in salt caverns. The Gulf Coast's industrial infrastructure — refineries, pipelines, ports — can be repurposed for new energy applications. The Texas Gulf Coast is already a hub for proposed carbon capture and hydrogen projects.
The through-line from Spindletop to whatever comes next is engineering capability and infrastructure. The identity might shift from "oil and gas" to "energy" more broadly, but the underlying competence doesn't have to go away.
Here's a wild thought. The Railroad Commission, which we talked about as this incredibly powerful regulatory body, still exists. It's been renamed the Texas Railroad Commission, but it still regulates oil and gas. It doesn't regulate wind or solar, though. So the institutional architecture that managed the oil age isn't set up for the next one. That's either an opportunity to build something new, or it's a vulnerability.
Legacy institutions tend to protect legacy industries. The Railroad Commission's entire reason for being is oil and gas. It doesn't have a mandate for the energy transition, and it probably doesn't want one. So you might get a situation where the state's regulatory apparatus is actively slowing down the very transition that the state's geography and business culture are accelerating.
That tension is already visible. You have counties in West Texas that are simultaneously the largest oil producers in the country and the largest wind energy producers. The same landowners are collecting royalties from both. But politically, oil and renewables are often framed as enemies. The reality on the ground is more complicated.
To circle back to Daniel's question — why Texas? It's the confluence of geology, timing, regulatory innovation, cultural storytelling, and reinvestment. And it's still true today, but the meaning of "synonymous with oil and gas" is changing under our feet. It might mean "synonymous with energy" in another generation.
If I had to bet, I'd say Texas is better positioned than almost any other petro-state to make that transition. Not because of policy foresight, but because of the underlying assets — the land, the infrastructure, the human capital, and the sheer scale of the energy economy. The Permian Basin isn't going to stop producing oil anytime soon. But West Texas might also become the center of a new energy economy that looks very different.
One final thing I want to hit. You mentioned the East Texas field and Dad Joiner. There's a story there that captures something essential about the Texas oil identity. Joiner was a seventy-year-old wildcatter who had drilled dry holes all over the state. Everyone thought he was a fool. He raised money from widows and small-town investors, promising them riches. And against all geological advice, he kept drilling in Rusk County. When he finally hit the Woodbine formation in October nineteen thirty, it wasn't just oil. It was the largest oil field ever found in the lower forty-eight. The wells were so prolific that some of them produced for more than seventy years.
Joiner himself died relatively poor. He sold his leases too early, got tangled up in lawsuits, and never really cashed in on the scale of his discovery. That's the other side of the Texas oil myth — for every H.Hunt who built a fortune, there were hundreds of Joiners who found the oil but couldn't hold onto it.
The romance and the tragedy, side by side. That's probably a better encapsulation of Texas oil than any statistic.
That romance is still there. Drive through West Texas today, and you'll see pumpjacks nodding away in the middle of nowhere, wind turbines spinning behind them, and a guy in a pickup truck who's probably running three different energy-related businesses. It's a different world than nineteen-oh-one, but the bones are the same.
I think that's the answer, then. Texas became synonymous with oil and gas because it had the resource, the timing, and the story. And it's stayed synonymous because it reinvested the wealth, built institutions, and kept adapting. Whether that identity survives the energy transition is the big open question.
And now: Hilbert's daily fun fact.
Hilbert: The largest octopus ever reliably recorded was a giant Pacific octopus found off the coast of Tasmania in nineteen-oh-three. It was documented by a marine survey team and reportedly had an arm span of just over thirty feet and weighed more than six hundred pounds, though the survey vessel's log notes the specimen was "incomplete" due to being partially eaten by sperm whales before retrieval.
I'm going to think about that every time I'm near the ocean now.
This has been My Weird Prompts. Thanks to our producer Hilbert Flumingtop. You can find all our episodes at myweirdprompts dot com. We'll be back next time.
