When Southern California was the Kuwait of the Jazz Age
How Oil Transformed Long Beach and Built the Southern California Economy
This is another piece exploring California’s industrial past and present. We’ve covered many stories (here’s one, another, another) about the businesses, companies, and individuals who helped shape cities like Los Angeles into the vibrant, diverse economic powerhouses they are today. People often dismiss extractive industries as purely harmful, but without them, Los Angeles would never have become the city it is today.
Southern California is best known for its sun-soaked beaches and Hollywood glamour, but it also has a wilder, largely forgotten past: it was once an oil kingdom. It’s a story even many Californians don’t know, a tale of spectacular gushers, fortunes won and squandered, and larger-than-life characters straight out of a movie (There Will Be Blood takes place in the fictional town of Little Boston, but it's understood to be near the Signal Hill oil strike near Long Beach, according to the Los Angeles Times.)
Without oil, Los Angeles, and much of Southern California, would be very different places today.
The story of oil in Southern California is inextricably linked to the Long Beach fields. The discovery of oil here wasn't just a headline in the Los Angeles Herald Examiner (In the 1920s, the Los Angeles Times was actually smaller in circulation than the Examiner); it was a seismic event that transformed the landscape, both literally and metaphorically. And it provided an industrial center of gravity to a region of the state that was just beginning to emerge as one of the world's great gateways of commerce (The Port of Los Angeles was just beginning its ascent as one of the world’s great ports).
The early 20th century was the beginning of the era of oil in California, an era that would last decades. On June 23, 1921 at 9:30 a.m., the Alamitos No. 1 oil well on Signal Hill in Long Beach was drilling 2,765 feet beneath the surface when the drill struck an underground oil deposit. This oil was under high pressure due to natural gas, blowing a gusher of oil over 100 feet high, and heralding the start of the Long Beach oil boom.
This event marked the discovery of one of the most prolific oil fields in the Los Angeles basin. Throughout the 1920s, Signal Hill, along with the nearby Santa Fe Springs field, experienced numerous blowouts, which erupted into dramatic pillars of flame that could be seen for miles. These incidents eventually prompted calls for stricter safety regulations. Consequently, in 1929, the state mandated the use of blow-out prevention equipment on all oil wells drilled in California.
Signal Hill quickly mushroomed into a forest of oil derricks, with fortunes being made overnight. As one of the most productive oil fields in the world, the Long Beach field was at one point yielding a staggering one-third of California's total oil production. By the mid-1920s, California was producing nearly a quarter of the world's entire petroleum supply, much of it from the Long Beach area.
That so much oil is present beneath the surface of this stretch of Southern California is a gift of geology. Millions of years ago, the area that is now Long Beach was covered by the ocean. This marine environment was ideal for the accumulation of organic material, such as the remains of tiny plants and animals, on the ocean floor.
Over time, layers of sediment buried this organic matter. The high pressure and temperatures associated with deep burial transformed this organic material into hydrocarbons – basically oil and natural gas. Southern California is, of course, known for its active tectonics, influenced by the Pacific and North American Plate boundary and the San Andreas Fault. This tectonic activity has created a complex network of faults and folds in the earth’s crust in the Long Beach area.
The folding of the earth's layers and the formation of fault traps (where displaced rocks create a seal that traps oil), create reservoirs where oil accumulates and is preserved over geological time scales, waiting to be discovered and extracted. Another geological advantage was the Monterey Formation (we did a story on it), a Miocene-age sedimentary rock that has generated most of California’s oil. In naturally fractured zones, its high porosity and organic richness allowed it to trap and hold vast reserves.
As the oil gushed, a wave of ambitious, hard‑edged, and enterprising men descended on the fields, each determined to stake their claim in the rush for black gold. Perhaps the most famous of these was Edward L. Doheny, a name synonymous with California oil. Doheny, an ambitious prospector, was one of the first to recognize the potential of the Los Angeles Basin's oil fields. His success in the oil industry was meteoric, but it was not without controversy, as he was later embroiled in the Teapot Dome scandal, a 1920s bribery scheme that led to prison time for Interior Secretary Albert Fall, the first U.S. cabinet member ever jailed.
The impact of oil production in Southern California extended beyond economics. It reshaped the region's landscape, both physically and culturally. Towns sprung up around oil fields, and workers flocked to the area, drawn by the promise of jobs and prosperity. Long Beach, once a sleepy coastal town, burgeoned into a bustling city.
During the 1920s, regulations on well spacing were minimal, allowing Signal Hill to market narrow town lots. These lots were swiftly purchased by aspiring oil tycoons who installed wells so close to each other that they almost touched. Despite the dense placement, the wells generally remained profitable, though they rapidly depleted the oil field. The hill earned the nickname "Porcupine Hill" due to its appearance from afar, bristling with numerous wooden oil derricks since the more compact "nodding-donkey" pumpjack had not yet been developed.
The booming oil industry in the region attracted a massive influx of workers and investments. As oil fields expanded, Long Beach rapidly transformed from a seaside resort into an industrial powerhouse. The surge in economic activity and the availability of abundant oil fueled the growth of industries in and around Long Beach, including the burgeoning shipping and maritime sectors.
The construction of the Port of Los Angeles, (now the nation’s largest port) which began in earnest in the early 1900s, was driven by the need to support the growing economic activities in Southern California, including agriculture, manufacturing, and oil. (There’s an excellent new book about the creation of the port titled A Machine to Move Ocean and Earth by James Tejani.) The proximity of Long Beach to the port, only about 20 miles south, meant that it was perfectly positioned to benefit from and contribute to the port's activities. The port served as a critical node for shipping oil, among other goods, which further integrated Long Beach, and Southern California as a whole, into the global trade system.
Of course, the huge influx of wealth and people also brought challenges, including environmental concerns and the need for regulatory oversight. Several major oil spills have taken place off the coast, ruining beaches and killing animals by the millions. In 1969, the Santa Barbara oil spill released massive quantities of oil into the ocean, creating an environmental disaster along the California coastline. This catastrophic event galvanized public awareness and activism, leading to the creation of the first Earth Day, as well as significant environmental legislation, including the establishment of the U.S. Environmental Protection Agency.
Oil spills continue to take place in Southern California and the existence of 26 rigs off the coast are a reminder of that oil boom era. Those rigs are coming to the end of their productive life, however, and an ongoing controversy is what to do with them. Remove them or leave them, or part of them, as artificial reefs?
The easily accessible oil has largely been extracted, and production has declined from its mid-20th-century peak. Yet, the legacy of this era persists. As big and diverse Los Angeles has become, it mostly started with oil. The fact that Los Angeles is now hardly known for oil, but better known for its massive entertainment and tourism economies, is a pretty astonishing transformation. And it’s exactly the kind of story we like to tell here at California Curated.
That was really interesting. I did not know that about those beginnings for the Long Beach area. Thanks for sharing!
Thanks, Danell!