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AAPG Rocky Mountain Section Meeting

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History of Oil Refining in Wyoming and Montana

Abstract

Wyoming and Montana’s oil refining histories are an integral part of the development of the oil industry in the Rockies. Accounts of the petroleum industry often focus on the development of its numerous oil and gas fields, with little being said about how and where the liquids were transformed into useful products. Oil seeps in the Rockies were noted as early as the 1830s by Native Americans, prospectors, and adventurers. These sightings helped spark exploration and development beginning in the latter part of the 19th century, laying the groundwork for the need of refining. The first oil refinery built in Wyoming was located in Casper in 1895, constructed only five years after Wyoming was granted statehood. Montana’s first refinery would not be constructed until 1921. Plants were first built using concepts derived from whale-oil refining and coal-oil plants, and often referred to as topping, skimming, or stripping plants. These operations consisted of heating the crude oil to vaporize the lighter ends, and condensing the vapors to capture separated products. Initially, the desired products were mostly lamp oil (kerosene), lubricating oils, and paraffin wax. A market soon developed for fuel oil as it was determined that petroleum was superior to coal in powering the large engines of ships and railroad locomotives. With the onset of the automobile and its internal combustion engine in the early 1900s, demand soon developed for motor fuel, and gasoline became the principal refining product. With this increasing demand for gasoline, the process of “cracking” was developed, resulting in increased gasoline production. Refineries tended to be built wherever there was a source of crude oil. Other factors influencing a refinery’s location included availability of water needed for steam generation and product cooling, and ease of access to markets. Many refining plants were built in anticipation of a great flood of crude from nearby development. Some of these plants were simply attempts on the part of promoters without much experience in the business of refining oil to make a quick profit off of naïve investors. Although some skepticism prevailed as to the motives and legitimacy of the promoters in some of the smaller ventures, most plants were constructed by operators who were well-experienced in the risks, rewards, marketing, and technical challenges associated with oil refining. Smaller topping and skimming refineries tended not to be operated consistently due to uncertain crude supplies and operational issues. Pipelines were being constructed to connect many of the major oil fields to established refineries with cracking capabilities to secure maximum yields. The consolidation of major refiners to streamline operations and more efficiently compete for markets also became the trend. The refining landscape changed after World War II, with the shutting down of many of the smaller plants due to supply problems, the need for more efficient methods of refining, and larger operators committing production to their own refineries. At least 160 refineries, ranging in size from less than 100 barrels per day of processing capacity to as much as 85,000 barrels per day, have existed in Wyoming and Montana since 1895, with the simplicity of “tea-kettle” distilleries that sold fuels and lubricants to local markets to complex, fully integrated refineries capable of handling multiple grades of crude and refining the oils into a variety of products transported and sold worldwide. This work focuses on when, where, and why these plants were constructed, and why they ceased to operate. There currently remains five active refineries in Wyoming and four active refineries in Montana, a stark contrast to the 80 plants reported in operation throughout the two states during the peak years of the 1930s.