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Before Hollywood, The Oil Industry Made LA
April 6, 2016NPR talk radio interviewed David Slater, Executive Vice President and COO for Signal Hill Petroleum, discussing how the Oil Industry turned Los Angeles into the thriving city that it is today. See below for the written article associated with the interview, along with the audio clip.
Before Hollywood, The Oil Industry Made LA
April 5, 20165:42 PM ET – Heard on All Things Considered
Jonaki Mehta
Ever watch The Beverly Hillbillies and wonder why Jed Clampett moved to Beverly Hills and not Texas or some town that we more closely associate with oil?
Even Angelenos forget sometimes that the Clampetts came first, then the swimming pools and movie stars. Think J. Paul Getty or Edward Doheny, men who made their fortunes on oil and then made LA.
Los Angeles is a world center for transportation, fashion, manufacturing and — above all — entertainment. In the heart of this metropolis, oil is hidden in plain sight. If you go on a walk to clear your head at NPR’s Culver City studios, cross the street and you’re in one of the largest producing urban oil fields in America.
“When you think about Los Angeles, you tend to think of big skyscrapers and beaches. You don’t generally tend to think of oil wells,” says Lars Perner, a professor at the Marshall School of Business at the University of Southern California.
“This is fairly valuable real estate, with some rather expensive homes close by,” he says of the Inglewood oil field. Perner points to the Baldwin Hills and View Park neighborhoods that are considered the “Black Beverly Hills” for former residents such as Tina Turner, Ray Charles and Nancy Wilson. “This oil is clearly very valuable to justify using that space for those oil pumps,” Perner says.
He says that as iconic as the Hollywood sign or the movie studios are, it’s the oil wells that made modern life in LA possible. The LA Basin is very isolated and vast. That makes getting goods into the area difficult, and it made transporting goods around the region very tough. That is until the invention of the automobile and the discovery of oil.
“Back in those days there weren’t really a lot of regulations as to how you could drill, so a lot of people got very entrepreneurial. And they were trying to get pumps onto their property before their neighbors could,” Perner says.
You can find oil wells hidden all over Los Angeles. Beverly Hills High School has multiple oil wells on its campus. (The school’s wells were the subject of a class action suit brought by Erin Brockovich). Edward Doheny, for whom the major thoroughfare in Beverly Hills is named, discovered oil under a private residence in 1892. His find set off an oil-drilling spree. The battle over the rights to that oil could fill several history books and many films. As J. Paul Getty once said, “The meek shall inherit the earth, but not its mineral rights.”
Part of what made Los Angeles oil so attractive, Perner says, was that the oil was close to the surface and easy to extract. Add to that the newly invented automobile, incredible weather and a port, and that’s a recipe for exponential expansion.
But Perner suggests that without oil there would be no modern LA. “Well, the petroleum industry of course made it possible to have Hollywood.” And he says it made it made it possible to build an infrastructure to transport agricultural produce from other areas to help support the growth of a relatively large city very quickly.
“Los Angeles was a sleepy pueblo that became LA, and Hollywood and the studios all popped up and people got wealthy because of oil,” says David Slater, chief operating officer of Signal Hill Petroleum. In 1921, oil was discovered on Signal Hill, a city near the Port of Long Beach. These two discoveries are what made Los Angeles one of the world’s major petroleum fields.
It’s difficult to overstate just how much oil was being produced in LA back in the 1920s.
“The production from here made Los Angeles the equivalent of Saudi Arabia today,” Slater says.
Today, the city of Signal Hill is one of the largest urban producers of oil in the U.S. But the steep drop in oil prices has had a big impact on smaller oil companies like Signal Hill Petroleum.
“The painful part, though, is when prices go down, contracting our business and eliminating jobs is never ever a fun thing to go through,” says Slater. His company has shrunk from 150 employees to 85.
As he looked out over the bay of Long Beach, where supertankers line the horizon, Slater said he wished he could drill more. He joked that cheap gas wasn’t completely bad, as he drove us down Signal Hill in his white Escalade.