Lima, Ohio - Lima's Oil History

Lima's Oil History

With the discovery of oil in Lima in 1885, Ohio began what came to be called the "Oil Boom of Northwest Ohio." Discovery actually began in Findlay, Ohio, a city forty miles north of Lima. The discovery of natural gas deposits there in 1884 led to national marketing efforts advertising free gas, as Findlay's business leaders tried to "boom" the town. In 1885, Benjamin C. Faurot of Lima was one of hundreds of businessmen who visited Findlay to see the seemingly unlimited supply of natural gas burning day and night. Faurot owned the Lima Paper Mill. He spent $2,500 on energy consumption annually. Water for his operation was also a problem. So Faurot decided to drill in Lima – for gas or water. Faurot's first oil, found along the Ottawa River on May 19, 1885, was more accidental discovery than deliberate scientific experiment.

During the first week, the well produced more than 200 barrels (32 m3) of oil. Faurot quickly organized local businessmen into a syndicate that would purchase oil leases from farm owners. The company was called the Trenton Rock Oil Company, and by 1886, had 250 wells from Lima to St. Marys, Ohio, and west to Indiana.

When the news broke that northwest Ohio had oil, Standard Oil of Cleveland decided to build a refinery in Lima. Unlike Pennsylvania's oil, northwest Ohio's "sour crude" was high in sulfur content, smelling like rotten eggs, and customers shunned it. Lima's new Solar Refinery was charged with solving the sulfur problem. Until then, Standard bought and stored as much northwest Ohio crude as was possible to maintain their monopoly. It dropped the price of crude from more than sixty cents a barrel to forty cents in an attempt to discourage further production.

Oil drilling fever hit northwest Ohio and "boom towns" sprang up overnight. Additional crude glutted the market, and trying to slow production, Standard Oil lowered its price to fifteen cents a barrel. This decision had little effect on the large producers elsewhere, but the smaller Lima producers, whose oil wells could not keep up, found themselves severely hampered. Fourteen independent Lima producers formed a combine – the Ohio Oil Company. Eventually, it became Marathon Oil, still located in Findlay, Ohio.

Lima's Solar Refinery General Manager John Van Dyke and Herman Frasch, Standard's chemist, solved the distillation problem for sour crude by devising a method for removing the sulfur. The gamble that John D. Rockefeller took building pipelines and storage tanks for Ohio's sour crude paid off. By 1901, the excitement about Ohio oil slowed with the news of a Beaumont, Texas, gusher producing 100,000 barrels per day (16,000 m3/d).

In 1911, the courts declared Standard Oil Trust a monopoly and broke it into several companies. Between 1887 and 1905, the Lima Oil Field was a world-class producer, yielding 300 million barrels (48,000,000 m3). Lima was also a pipeline center. Within three years of the discovery of oil, a trunk line reached Chicago. Lima oil lit the buildings of the 1893 World's Fair. Production peaked in 1904, and then dropped off rapidly. By 1910, the field was regarded as virtually played out. Still, the Lima Refinery has survived, continuing to operate for more than 125 years under a succession of owners—Solar Refining Company (1886), a subsidiary of Standard Oil until the breakup in 1911, SOHIO (1931), British Petroleum (1987), Clark USA (1998), Premcor (2000), Valero Energy Corporation (2005), and most recently Husky Energy (2007).