The two-tiered system proved ineffective, as the price of gold on the open market began to fluctuate wildly, occasionally dipping below the official $35 price per ounce. The system’s viability was destroyed three years later, when President Richard Nixon ended the dollar’s convertibility to gold. This period of gold instability led to the largest gold bubble in history, exceeding even the price growth encountered during the first decade of the 21st century.
A frac-tastic history
The first successful use of hydraulic fracturing took place at Duncan, Okla. — and then later in the day near Holliday, Texas, by a team from Halliburton Company (NYSE:HAL) and Stanolind (later known as Amoco) — on March 17, 1949. The American Oil and Gas Historical Society reports:
By 1988, the technology will have been applied nearly one million times. The technique had been developed and patented by Stanolind (later known as Pan American Oil Company) and an exclusive license issued to Halliburton to perform the process. In 1953, the license was extended to all qualified service companies.
According to a spokesman from Pinnacle, a Halliburton Company (NYSE:HAL) service company:
Since that fateful day in 1949, hydraulic fracturing has done more to increase recoverable reserves than any other technique, and Halliburton Company (NYSE:HAL) has led the industry in developing and applying fracturing technology. In the more than 60 years following those first treatments, more than two million frac(turing) treatments have been pumped with no documented case of any treatment polluting an aquifer — not one.
Sunny days ahead for the oil industry
Sunoco — the Sun Oil Company — was formed in Ohio on March 17, 1890, out of the expanded properties of the Peoples Natural Gas Company. It had grown into a vertically integrated oil-industry powerhouse in four short years, with operations from the well to the engine, covering production, refining, transport, and distribution. The company continued to grow, expanding into shipbuilding and mining by the 1940s. International expansion followed in the 1950s, but by the 1990s the company had refocused on products and services rather than oil exploration and production. The shift away from production reached its ultimate end when Sunoco agreed to merge with Energy Transfer Equity, L.P. (NYSE:ETP) in 2012. That company is now one of the largest midstream operators in the United States, with more than 69,000 total miles of pipeline.
The article The Dow’s Big Shift and the Next Generation of Big Oil originally appeared on Fool.com and is written by Alex Planes.
Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter, @TMFBiggles, for more insight into markets, history, and technology.The Motley Fool recommends Halliburton and Johnson & Johnson and owns shares of Citigroup Inc (NYSE:C) and Johnson & Johnson.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
