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History of Utah's Oil & Gas Industry

Utah has a long, rich history of oil and gas development. From very early on, Utah’s pioneer ancestors realized that oil and natural gas resources were prevalent across the State. Since those early days, the petroleum industry has been an integral part of the State’s development. From the earliest small discoveries to the current booming development, oil and gas exploration and development as well as petroleum refining have been a cornerstone of Utah’s economy, providing jobs and revenue to families, communities and the State.

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1850 | Petroleum in Utah

While on a survey of the Great Salt Lake, Captain Howard Stansbury of the Army Corps of Topographical Engineers, discovered evidence of the existence of "petrolium" along the northern shore of the lake.

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1891 | First Wells in Utah

In 1891 an enterprise called the Utah Oil Company, whose founders included Simon Bamberger (later to become Utah Governor), drilled a 1,000 foot well near Green River. The well was dry and the attempt abandoned. During the remainder of the 1890s oil and gas prospectors sank approximately 25 wells in various parts of the state.

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1907-1939 | Early Oil Drilling

Observation of oil in outcroppings turned the State's oil attention to Southern Utah's Washington and San Juan Counties. A former gold prospector named E.L. Goodridge drilled a well at Mexican Hat on the San Juan River that, for a time, produced enough oil for local use.

The period between 1910 and 1940 brought much excitement and speculation about the potential of oil and natural gas in Utah. Wells were drilled in many parts of the state, including in Salt Lake City. Some produced small amounts of oil and gas but never enough for the interest or investment to continue.

The Great Depression and first years of World War II really slowed exploration. Very few wells were drilled statewide.

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1909 | First Refinery

The Salt Lake City Refinery was built in 1908 by Lubra Oils Manufacturing Co. and was immediately sold in 1909 to Utah Oil Company (UTOCO). The early refinery was located on a small quarter acre north of Salt Lake City and produced seven barrels per day of kerosene, greases, and lubricating oils. A series of ownership changes ensued over the next several years. Standard Oil of Indiana acquired partial ownership in 1921 and full ownership in the 1950s. Standard continued for a number of years under the UTOCO brand. Utah Oil Company's products included Vico motor oils and greases and Pep gasolines. Pep gasoline later became Utoco gasoline, a brand that became familiar throughout Utah and Idaho, and later, in eastern Nevada, western Wyoming, and eastern Oregon and Washington. Standard Oil of Indiana later became the American Oil Company (AMOCO) which owned and operated the refinery for many years. In 2001, the refinery was sold to Andeavor who owns and operates the facility today.

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Intermountain Refining Complex

The period between 1932 and 1954 saw the construction of 4 additional refineries in the Salt Lake area making the region the largest refinery complex in the Intermountain West.

HollyFrontier's Woods Cross Refinery was built in 1932 by Wasatch Refining Company who marketed Golden Eagle and Wasatch gasoline. The refinery was sold to Phillips Petroleum in 1947. Phillips operated the refinery until 2003 when it was required to divest the facility as a result of its merger with Conoco. Holly Corporation (now HollyFrontier) purchased the refinery from ConocoPhillips and operates the facility today.

Chevron has continuously operated its Salt Lake Refinery since its construction in 1948. Chevron operates two pipelines that supply the majority of the facility's crude oil. One comes from Kimball Junction is Summit County and the other from Rangely Colorado.

Big West Oil's North Salt Lake Refinery was built in 1949 by Western States Refining Company. Subsequent owners included Frontier Oil, Husky Oil and Flying J. Following a financial downturn of Flying J, the refinery was acquired and is now operated by Big West Oil.

Silver Eagle's Woods Cross Refinery was built in 1954 by Sure-Seal Corporation. Sure-Seal developed a process to extract the wax from the Uinta Basin's Black and Yellow Wax crudes. Subsequent owners included W.M. Barnes Company, Petroflex Corporation, Frontier Oil, Crysen Refining and Inland Refining. Silver Eagle Refining purchased the facility in 2000 and continues to operate it today.

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First Commercial Production

Toward the end of World War II, oil exploration accelerated in Utah. Several large companies came to the State including Standard Oil of California, Pure, Continental, Gulf and Union. A local Salt Lake Company, Equity Oil Company, beat them all to the punch in drilling the first truly successful commercial oil well in the Uinta Basin. Under the leadership of J.L. Dougan, Equity completed a well in Ashley Valley on September 18, 1948. Initial production was 300 barrels a day. The discovery ignited a series of discoveries in the Uinta Basin over the next several years which included major fields such as Roosevelt (1949), Red Wash (1951), Walker Hollow (1953), and Bluebell (1955). These fields became a part of two giant oil-producing complexes - Greater Altamont-Bluebell and Greater Red Wash.

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1950s | Expansion and Growth

During the 1950s other large companies, including Shell, Superior, and Texas Oil, explored and developed resources in southeastern Utah that soon would overshadow even the Uinta Basin. The discovery well was at Aneth, along the San Juan River east of the old Mexican Hat field. It produced over 1,700 barrels of oil per day when discovered in 1956. Other major fields were soon discovered in the region which became known as the Greater Aneth Area.

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1975 | Utah's Overthrust

In 1975 Summit County became an important center for oil development. As part of the Overthrust Belt, a region of highly complex mountain-forming faults and thrusts, Summit County became the scene of American Quasar's discovery at a field called Pineview, east of Coalville. Within the next five years, Amoco, Chevron, Gulf, Champlin and Anschutz Corporation hit large amounts of oil and gas in a series of fields that included Lodgepole, Elkhorn Ridge, Anschutz Ranch, and Anschutz Ranch East.

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2000s | Natural Gas Boom

Beginning in the late 1990s, natural gas demand and the resulting price increase encouraged a tremendous upswing in natural gas development around the country and in Utah. Coal-bed methane production in Carbon and Emery Counties as well as major developments in Uintah County accounted for the vast majority of wells drilled in the State during this time frame. Huge investments in gas processing and pipeline capacity were also made.

  • As of 2015, Utah ranks 11th nationally in oil production and 12th among states in natural gas production.
  • There are currently 141 operating refineries in the United States with 5 located in Utah. Utah refineries produced over 36 million barrels (1.5 billion gallons) of motor gasoline in 2015 and over 19 million barrels (798 million gallons) of distillate fuel (diesel).
  • Well completions in Utah (both oil and gas) have declined dramatically over recent years as commodity prices plummeted and have stayed low. There were 1243 completions in 2008, 925 in 2014 and only 305 in 2015.
  • Duchesne (46%), Uintah (34%) and San Juan (12%) Counties accounted for 92% of oil production in Utah in 2015. The balance was produced collectively from Sevier, Grand, Summit, Carbon and Emery Counties.
  • The ratio of oil wells drilled in Utah versus natural gas wells has shifted significantly over recent years as commodity prices have affected company's drilling programs. In 2008, only 28% of wells drilled were for oil while in 2014, 76% of all wells drilled were primarily seeking oil.
  • Wages for energy-related jobs are nearly double the average annual wage for all employment in Utah.
  • In 2015 petroleum products and natural gas accounted for 59% of total energy consumed in Utah. Coal was responsible for 38% while all renewables combined made up 3% of energy use.
  • Utah refineries received record amounts of crude oil in 2014 and only slightly less in 2015, with 43% coming from in-state and 8% coming from Canada.
  • Fossil fuels made up 98% of Utah’s total energy production in 2015, while renewable sources accounted for only 2% of Utah’s production portfolio.
  • Property taxes charged against Utah oil and gas activities have increased more than six times since 1996, totaling nearly $64 million in 2015.
  • The value of crude oil produced in Utah reached an all-time inflation-adjusted high of $3.2 billion in 2014, but then dropped to only $1.5 billion in 2015 as commodity prices sank.
  • Natural gas production in Utah reached a record high in 2012 of 491 billion cubic feet, but has since dropped to 423 billion cubic feet in 2015.
  • Oil and gas operations in Utah account for about 1.3% of the State's gross state product. Utilities (including some non-energy sectors), refineries, and pipeline transportation and maintenance account for an additional 1.9%.
  • The last major refinery built in the United States was put into operation in 1977.
  • Utah’s average price of residential natural gas in 2015 was $9.72 per thousand cubic feet, the 17th lowest in the nation. As recently as 2011, Utah’s price was the third lowest in the nation, but new natural gas pipelines have better connected our once captive market with the rest of the United States.
  • Natural gas is the largest source of annual energy production in Utah, surpassing coal for the first time in 2010.
  • In 2015, 76% of the electricity generated in Utah was from coal-burning power plants. Electricity generation from natural-gas power plants more than doubled since 2007, increasing its total share in 2015 to 19%.
  • Utah produced 18% more energy than it consumed in 2015, continuing its status as a net-energy exporter. This percentage is usually closer to 30%, but production of fossil fuels was significantly down in 2015.
  • Energy-related employment in Utah declined to 15,367 in September of 2015 (down 16% from the 18,236 recorded in October 2014 prior to the oil price crash), of which the majority (30%) came from the oil and gas sector.
  • Average yearly wages in the energy sector ($83,400, first three quarters of 2015) are more than double the statewide average annual wage ($41,500, first three quarters of 2015).

UPA's voice is strengthened by companies like yours joining forces with us to work towards maintaining and improving Utah's favorable business climate.

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