Petroleum Timeline

	3000 B.C.	Mesopotamians of that era used rock oil in architectural adhesives, ship caulks, medicines, and roads.

	2000 B.C.	The Chinese refined crude oil for use in lamps and in heating homes.

	600-700 A.D.	Arab and Persian chemists discovered that petroleum’s lighter elements could be mixed with quicklime to make Greek fire, the napalm of its day.

	1750	A French military officer noted that Indians living near Fort Duquesne (now the site of Pittsburgh) set fire to an oil-slicked creek as part of a religious ceremony. As settlement by Europeans proceeded, oil was discovered in many places in northwestern Pennsylvania and western New York-to the frequent dismay of the well-owners, who were drilling for salt brine.

	Mid-1800s	Expanding uses for oil extracted from coal and shale began to hint at the value of rock oil and encouraged the search for readily accessible supplies.

	1859	Oil was first discovered when a homemade rig drilled down 70 feet and came up coated with oil. This rig was near Titusville (in northwestern Pennsylvania) and was owned by "Colonel" Edwin L. Drake.

	1890s	Mass production of automobiles began,creating demand for gasoline. Prior to this, kerosene used for heating had been the main oil product.

	1920	There were 9 million automobiles in the United States and gas stations were opening everywhere.

	1950-present	Oil became our most used energy source because of automobiles.

	1960	The Organization of Petroleum Exporting Countries (OPEC) was formed by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. The group has since grown to include 11 member countries.

	1970	Production of petroleum (crude oil and natural gas gas plant liquids) in the U.S. lower 48 States reached its highest level at 9.4 million barrels per day. Production in the lower 48 States has been declining ever since.
	1972	Oil well productivity for the Nation reached a high of 18.6 barrels per day per well.

	1973	Arab Oil Embargo- In 1973, several Arab OPEC nations embargoed, or stopped selling, oil to the United States and Holland to protest their support of Israel in the Arab-Israeli “Yom Kippur” War. Later, the Arab OPEC nations added South Africa, Rhodesia, and Portugal to the list of countries that were embargoed. Arab OPEC production was cut by 25 percent, which caused some temporary shortages and helped oil prices to triple. Some filling stations ran out of gasoline and cars had to wait in long lines for gasoline.

	1973	Price Controls - In reaction to the Arab Oil Embargo of 1973, Congress passed laws that tried to protect consumers from gasoline shortages and high prices. The price controls of the Emergency Petroleum Allocation Act were generally considered a failure, and they were later repealed.

	1975	The Energy Policy and Conservation Act – Congress passed the Energy Policy and Conservation Act aimed at increasing oil production by giving price incentives. This act also created the Strategic Petroleum Reserve (SPR), and required an increase in the fuel efficiency (miles per gallon) of automobiles.

	1978-1980	Oil Prices Doubled- The Iranian Revolution, which began in late 1978, resulted in a drop of 3.9 million barrels per day of crude oil production from Iran from 1978 to 1981. At first, other OPEC countries made up for the drop in Iranian production. In 1980, the Iran-Iraq War began, and many Persian Gulf countries reduced output as well. By 1981, OPEC production was about one-fourth lower than it had been in 1978, and prices had doubled.

	1980-1985	OPEC kept prices high by producing less oil. Saudi Arabia acted as a “swing producer”, cutting more production than any other OPEC country. But high prices caused less oil to be used. For example, cars became smaller using less gasoline. The drop in oil consumption meant that less oil needed to be produced. Oil production from Saudi Arabia fell from 9.9 million barrels per day in 1980 to 3.4 million barrels per day in 1985.

	1981	Removal of Price Controls -The U.S. Government responded to the oil crisis of 1978-1980 by removing price and allocation controls on the oil industry. For the first time since the early 1970s, market forces(supply and demand) set domestic crude oil prices.

	1986	Crude Oil Price Collapse – In 1986, Saudi Arabia stopped holding back production, and other OPEC increased production. This caused an oil glut and prices were almost cut in half. Oil consumption grew quickly in the late 1980’s because prices remained low.

	1988	Alaska’s production at Prudhoe Bay peaked at 2.0 million barrels per day and fell to 1.0 million barrels per day in 1999. By then U.S. total output had dropped to 7.8 million barrels per day, 31 percent below its peak.

	1990-1991	Persian Gulf Crisis -Iraq invaded Kuwait on August 2, 1990, causing crude oil and product prices to rise suddenly and sharply. Prices rose even higher when the United Nations (UN) limited the oil that could be purchased from these countries. Between the end of July and August 24, 1990, the world price of crude oil climbed from about $16 per barrel to more than $28 per barrel. The price rose even higher in September, reaching about $36 per barrel. As UN troops began seeing military successes in Iraq, concerns about long-term supply problems were eased and oil prices dropped again.

	1990	The Clean Air Act Amendments required many changes to gasoline and diesel fuels to make them pollute less. The use of these cleaner fuels was phased-in during the 1990s. Since 1995 “reformulated” gasoline has been used in places with the worst pollution problems.

	1993 forward	For the first time the U.S. imported more oil and refined products from other countries than it produced. More and more imports have been needed because of growing petroleum demand and declining U.S. production.

	1997-1998	The Asian financial crisis that occurred in 1997 had worldwide economic effects. As the Asian economies shrank, their demand for petroleum products declined. The slow demand for petroleum, along with the reluctance of OPEC to cut its production quotas, led to the plummet of oil prices in 1998.

	2001	The Nation’s petroleum production measured an average of 11.0 barrels of oil per day per well, 41 percent below the 1972 peak. U.S. petroleum consumption reached 19.7 million barrels per day, an all-time high. Of every 10 barrels of petroleum consumed in the United States, more than 4 barrels were consumed in the form of motor gasoline. The transportation sector alone accounted for two-thirds of all petroleum used in the United States. To meet demand, crude oil and petroleum products were imported at the rate of 11.9 million barrels per day, while exports measured 1.0 million barrels per day. Net imports (imports minus exports) of crude oil and petroleum products more than doubled between 1985 and 2001. The five leading suppliers of petroleum to the United States that year were Canada, Saudi Arabia, Venezuela, Mexico, and Nigeria.

	2005	The record-setting hurricane season of 2005 caused massive damage to the U.S. petroleum and natural gas infrastructure. The Gulf of Mexico, one of the nation's largest sources of oil and gas production, was dealt a one-two punch by Hurricanes Katrina and Rita during August and September. The Energy Policy Act of 2005 was passed. It required increased use of renewable fuels for transportation and new measures to reduce pollution from gasoline and diesel. Gasoline prices broke $3.00 per gallon for the first time.

	2006	Refineries began using more ethanol, a renewable fuel, in response to the Energy Policy Act of 2005. The Act also included new measures to reduce pollution from gasoline and diesel.

	2008	Crude oil price broke $100 per barrel for the first time. Gasoline prices broke $4.00 per gallon for the first time.

Last Revised: June 2008