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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.