The Capital of Oil
Within three years of its discovery in 1912, the Cushing field in Oklahoma was producing almost 20 percent of U.S. oil. Two years later, it was supplying a substantial part of the fuel used by the U.S. Army in Europe during World War I. The Cushing area was so prolific that it became known as ...
Within three years of its discovery in 1912, the Cushing field in Oklahoma was producing almost 20 percent of U.S. oil. Two years later, it was supplying a substantial part of the fuel used by the U.S. Army in Europe during World War I. The Cushing area was so prolific that it became known as “the Queen of the Oil Fields,” and Cushing became one of those classic wild oil boomtowns of the early 20th century. “Any man with red blood gets oil fever” was the diagnosis of one reporter who visited the area during those days. Production grew so fast around Cushing that pipelines had to be hurriedly built and storage tanks quickly thrown up to hold surplus supplies. By the time production began to decline, a great deal of infrastructure was in place, and Cushing turned into a key oil hub, its network of pipelines used to bring in supplies from elsewhere in Oklahoma and West Texas. Those supplies were stored in the tanks at Cushing before being put into other pipelines and shipped to refineries. When the New York Mercantile Exchange -- the NYMEX -- started to trade oil futures in 1983, it needed a physical delivery point. Cushing, its boom days long gone, but with its network of pipelines and tank farms and its central location, was the obvious answer. As much as 1.1 million barrels per day pass in and out of Cushing -- equivalent to about 6 percent of U.S. oil consumption. But prices for much of the world’s crude oil are set against the benchmark of the West Texas Intermediate crude oil -- also known as “domestic sweet” -- sitting in those 300 or so tanks in Cushing, making this sedate Oklahoma town not only an oil hub but one of the hubs of the world economy.
Within three years of its discovery in 1912, the Cushing field in Oklahoma was producing almost 20 percent of U.S. oil. Two years later, it was supplying a substantial part of the fuel used by the U.S. Army in Europe during World War I. The Cushing area was so prolific that it became known as “the Queen of the Oil Fields,” and Cushing became one of those classic wild oil boomtowns of the early 20th century. “Any man with red blood gets oil fever” was the diagnosis of one reporter who visited the area during those days. Production grew so fast around Cushing that pipelines had to be hurriedly built and storage tanks quickly thrown up to hold surplus supplies. By the time production began to decline, a great deal of infrastructure was in place, and Cushing turned into a key oil hub, its network of pipelines used to bring in supplies from elsewhere in Oklahoma and West Texas. Those supplies were stored in the tanks at Cushing before being put into other pipelines and shipped to refineries. When the New York Mercantile Exchange — the NYMEX — started to trade oil futures in 1983, it needed a physical delivery point. Cushing, its boom days long gone, but with its network of pipelines and tank farms and its central location, was the obvious answer. As much as 1.1 million barrels per day pass in and out of Cushing — equivalent to about 6 percent of U.S. oil consumption. But prices for much of the world’s crude oil are set against the benchmark of the West Texas Intermediate crude oil — also known as “domestic sweet” — sitting in those 300 or so tanks in Cushing, making this sedate Oklahoma town not only an oil hub but one of the hubs of the world economy.
Daniel Yergin is the vice chairman of IHS Markit and author of The Quest: Energy, Security, and the Remaking of the Modern World.
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