The Petrochemical Industry

What does “petrochemical” mean? a chemical that is made from petroleum or natural gas

Origins of the Petrochemical Industry Oil drilling began in Texas after the Civil War and by the 1890s, the state had its first large oil refinery. Workers turned crude oil into other products.

Origins of the Petrochemical Industry Howard Hughes, Sr., realized that more Texas oil could be retrieved if the oil drilling bit could go through thicker rock more quickly. He designed a bit that would grind rock as it drilled. This new design was called the Hughes Rock Bit. Within a few years, the Hughes Rock Bit was an international success.

What are some of the products made from petrochemicals?

What are some of the products made from petro-chemicals?

Oil Boom - The need for petrochemicals grew during World War II. American armed forces needed: Synthetic rubber for tires Explosives for bombs The U.S. government helped build the petrochemical industry in Texas to make these items.

Political Challenge: The Tidelands What are tidelands? They are lands under the water along the Texas coast. Tidelands Controversy (dispute-argument) The U.S. claimed ownership of the tidelands but Texans disagreed because they wanted to claim the land where there was a lot of oil. This was the greatest state vs federal power conflict of the 20th century. Texas native Dwight D. Eisenhower (Republican presidential candidate in 1952, sided with Texans making them vote for him (he won the election).

Emergence of Two-Party System Democrats were still a powerful force in the state. They played a big role during REPUBLICAN Dwight Eisenhower’s time in office. Texas Democrats Sam Rayburn and Lyndon Johnson worked closely with the Republican President. Most Texans still considered themselves Democrats. The power of the Republican Party grew in Texas – in 1961, Republican John Tower won a seat in the U.S. Senate – the first Texas Republican to win a seat in the Senate since Reconstruction (after the Civil War). Texas clearly was becoming a two-party system.

OPEC Oil Embargo - OPEC - (Organization of Petroleum Exporting Countries) – most of the members were Arab nations in the Middle East. They put an embargo on oil to the United States. Embargo - a government order that limits trade in some way (video – stop at 3:17)

Oil Boom Bust Cycle - BOOM: OPEC’s embargo had a big effect on Texas. The price of Texas oil TRIPLED. Thousands of people moved to Texas to benefit from the oil economy. BUST: Other oil-producing nations lowered their prices and increased production causing oil prices to drop from $34 to $10 a barrel. Many Texans lost their jobs.

Oil Boom - Again In 2008, new oil was found in Eagle Ford Formation in South Texas. It quickly became the largest oil and gas development in the world = new Texas oil boom. This translates into jobs – Eagle Ford Shale employs nearly 7,000 people (12,000 workers including other related industries) A University of Texas study predicts nearly 70,000 jobs by 2020.