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It Happened Here 4/26/12

Pensacola’s Oil Bust: 1901-1902
By Jessica Forbes
In late 1901, Pensacola became the site of the first oil well dug in the state of Florida. A rollercoaster ride of high expectations and deflated hopes ensued throughout the following year, as Pensacola investors waited with anticipation to learn if they were sitting on the next cache of oil along the Gulf Coast.

The so-called “Gusher Age” of American oil began in January 1901, when, during exploratory drilling near Beaumont, Texas, the Spindletop gusher blew up through its drilling rig in a fountain of “black gold.” A flurry of drilling and lucrative oil discoveries followed in Southeast Texas. Such a discovery amounted to winning the lottery of natural resources, and a small number of prospectors turned their attention to other Gulf Coast states to find the next Spindletop.

Pensacola’s oil excitement began when a substance resembling crude oil floated to the surface of the bay in a stream of bubbles behind the Bar Pilot’s Association building on South Palafox Street. Samples were sent to a New Orleans-based chemist, who verified in September 1901 that the substance was petroleum. The oil was also analyzed locally at the D’Alemberte Drug Store, where it was reportedly “declared to be good petroleum.”

Immediately, local businessmen formed and began selling shares of the Escambia Oil Company, “a million dollar stock company,” incorporated in Delaware. The Pensacola Development and Investment Company also formed in late 1901 for the purpose of oil exploration in Pensacola.

A delegation from the Escambia Oil Company traveled to New Orleans to secure oilrig machinery, and work was underway at the Bar Pilots’ property by December. Further west, the Pensacola Development and Investment Company was preparing to sink their first well approximately one mile east of Palmetto Beach.

The beginning of 1902 saw great excitement at both wells. The Bar Pilots’ Association opened the back porch of their building to spectators, providing the closest vantage point for the public to view the drilling operation.  In January and February, a familiar sequence developed: the drill would hit a small amount of oil, then a thick sheet of rock or sand that slowed efforts.

Weeks later, the bay well hit a pocket of warm water that some believed was a medicinal spring. Crowds gathered to taste and even bathe in the water in showers the oil company installed.  The Daily News reported that, “the fountain of youth has been found at last,” and lauded Pensacola’s future as a health resort. Within a month, chemists discovered the water had no medicinal properties and in May, the water stopped flowing altogether. The company then resumed drilling for oil.

The Pensacola Development and Investment Company abandoned their first well in the spring of 1902 after drilling to a depth of 1,880 feet with no success. The company chose a site in East Hill and sank their second well. In May, the drill penetrated what was at first thought to be a deposit of sulfur, but unfortunately turned out to be pyrite, or fool’s gold.

From there, it was a downhill slide for both companies. In June 1902, the Escambia Oil Company announced it was abandoning the well behind the Bar Pilots’ building. The Development and Investment Company had only $500 left to carry on their work, and asked the public to contribute funds.  Some thought if the company drilled another 1,000 feet, oil would surely be found. Evidently, the citizens of Pensacola had grown tired of oil mania, and maintaining hope in the face of few results. The well was abandoned as a dry hole.

Oil exploration took place in Pensacola sporadically throughout the following decades, but never resulted in a productive well. Attention was directed to successful discoveries in Santa Rosa County in the 1950s and, increasingly, offshore after 1947 when the first oil well was dug off the coast of Louisiana, and the Gulf of Mexico became the next American oil frontier.

Jessica is a Pensacola resident with a Master’s degree in Public History. When she’s not digging up history facts, you can find her at Music Box Pensacola.