The Petrochemical Industry

What does “petrochemical” mean?

O a chemical that is made from petroleum or natural gas

Origins of the Petrochemical Industry

O Oil drilling began in Texas after the Civil War and by the 1890s, the state had its first large oil refinery.

O Workers turned crude oil into other products.

Origins of the Petrochemical Industry

O Howard Hughes, Sr., realized that more Texas oil could be retrieved if the oil drilling bit could go through thicker rock more quickly.

O He designed a bit that would grind rock as it drilled.

O This new design was called the Hughes Rock Bit.

O 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 - O The need for petrochemicals grew during

World War II. American armed forces needed: O Synthetic rubber for tires O Explosives for bombs

O The U.S. government helped build the

petrochemical industry in Texas to make these items.

O What are tidelands? O They are lands under the water along the Texas coast.

O Tidelands Controversy (dispute-argument) O 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.

O This was the greatest state vs federal power conflict of the 20th century.

O Texas native Dwight D. Eisenhower (Republican presidential candidate in 1952, sided with Texans making them vote for him (he won the election).

Political Challenge: The Tidelands

O Democrats were still a powerful force in the state. O They played a big role during REPUBLICAN Dwight

Eisenhower’s time in office. O Texas Democrats Sam Rayburn and Lyndon Johnson

worked closely with the Republican President. O Most Texans still considered themselves Democrats. O 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).

O Texas clearly was becoming a two-party system.

Emergence of Two-Party System

OPEC Oil Embargo - O 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 O In 2008, new oil was found in Eagle Ford

Formation in South Texas. O It quickly became the largest oil and gas

development in the world = new Texas oil boom. O This translates into jobs –

O Eagle Ford Shale employs nearly 7,000 people (12,000 workers including other related industries)

O A University of Texas study predicts nearly 70,000 jobs by 2020.