Fuel for the Car Culture 1930—1973
The Depression years of the 1930s were a difficult time for the oil industry. In Colorado, as elsewhere in the United States, oil was a glut on the market as early as 1931. That year it sold in some states for as little as 10 cents a barrel. The cause was too much supply and not enough demand. It was a long-term problem in that new fields, particularly in California, Oklahoma, and West Texas, had created surplus stocks of oil during the 1920s. Excess capacity assumed new proportions in October 1930, with the opening of the four-county East Texas field. Within ten months its yield was about a million barrels of oil a day. This, coupled with continued expansion in other states, sharply depressed the price of crude and refined products.
Conditions became so chaotic that major oil-producing states resorted to extraordinary measures in an effort to curb output and to raise prices. The governors of Texas and Oklahoma imposed limits on production and mobilized National Guard units to enforce them. In other states, operators frequently reduced output rather than sell oil at less than the cost of producing it. In Colorado, exploration and development slowed almost to a standstill. One hundred independent well owners at Florence closed down operations when the price of crude dropped to 32 cents a barrel in the summer of 1931. However, the Continental Oil Company continued to pump sixty wells to supply its local refinery.