2 Firms Helped Fuel State’s Growth

The union of ChevronTexaco Corp. and Unocal Corp. would bring together founding members of California’s oil patch.

Established 115 years ago as a venture between a Southern California land baron and two wildcatters from the oil fields of Pennsylvania, Unocal built one of the first service stations in downtown Los Angeles and became famous for its Union 76 fuel. The company helped lure the Brooklyn Dodgers to L.A. in 1958.

Although it was also innovative -- as Pacific Coast Oil Co. it launched California’s first steel oil tanker in 1895 -- ChevronTexaco probably would have been little more than a historical footnote if not for the long arm of monopolist John D. Rockefeller.

His Standard Oil Co. rescued struggling Pacific Coast Oil in 1900, only to be forced by the U.S. Supreme Court to divest the business 11 years later. That created the nominally independent Standard Oil of California, or Socal, which in 1984 changed its name to Chevron.

Both Unocal and ChevronTexaco are inextricably linked to the development of the state’s economy because they provided cheap, abundant and, importantly, local oil to fuel California through its 20th century industrial revolution.

“They are almost like sister companies,” said Mike Nelson, a former Unocal geologist who now heads the California Oil Museum in Santa Paula, Unocal’s birthplace. “Both originated in the late 19th century and are still here 100 years later, when so many of California’s oil companies have disappeared.”

For many decades, the two companies supplied the state with thousands of well-paying jobs in the oil fields of Southern California and the San Joaquin Valley and the refineries of the Los Angeles Basin and the San Francisco Bay Area.

“Chevron and Unocal put a whole lot of people into the middle class over the last century,” Nelson said.

Oil first became a factor in California during the Gold Rush, when crude collected by hand from pits in Los Angeles was used for lamp oil.

The development of the gasoline-powered engine and automobiles near the turn of the 20th century created a seemingly insatiable thirst for crude. It became California’s new gold, and by 1920 California was the nation’s top oil-producing state.

Cut loose from the Rockefeller empire by the Supreme Court ruling, Chevron launched a worldwide search for crude oil to keep its large refineries in El Segundo and Richmond operating. During the 1930s, its California Arabian Standard Oil Co. subsidiary was an early entrant in Saudi Arabia. The company also went exploring in other parts of the Middle East, the Philippines and Alaska.

It was about this time that it began branding its products with the Chevron name.

Demand for petrochemicals boomed after World War II, pushing the company to expand its reach, often through acquisitions. It gobbled up Standard Oil Co. of Kentucky, another former Rockefeller company, and Gulf Oil Corp.

In a 2001 deal the company merged with Texaco to form San Francisco-based ChevronTexaco, becoming the world’s fifth-largest oil concern. The company subsequently moved to nearby San Ramon.

Unocal, long the smaller of the two, was beset from its early days with strategy questions that would replay a century latter when in 1997 the company sold its West Coast service station network and refineries to Tosco Corp. for $1.8 billion.

Co-founder Lyman Stewart, one of the Pennsylvania wildcatters, believed that the business should focus on marketing petroleum products such as fuel oil for factories, steamships and railroads. Thomas Bard, the Ventura County landowner who eventually became a U.S. senator, wanted the company to remain a crude oil producer and wholesaler. Bard gave up the president’s post in 1894 during a battle over the company’s plan to focus on refining and marketing.

Unocal opened its first service station -- at the time called a “gas stand” -- on the corner of Sixth and Mateo streets in Los Angeles in 1913. At the time, there were 123,000 automobiles in California. Just a dozen years later Unocal had 400 such stands.

The company steadily expanded its crude resources and service station network through the first decades of the 20th century, fighting off a takeover bid by what later would become Royal Dutch/Shell Group in 1922.

In 1932, a marketing executive came up with Unocal’s patriotic Union 76 gasoline brand, which some in the company theorize was also a play on the fuel’s octane rating.

The company, which helped finance the $23-million construction of Dodger Stadium in Chavez Ravine, was a major sponsor of Dodger TV and radio broadcasts, and the ballpark’s expanse of orange and blue seats were painted those colors in imitation of the Union 76 logo.

Less happily, the company became an unwilling symbol of environmental destruction in 1969 when a blowout at a Unocal drilling platform off the coast of Santa Barbara spewed more than 3 million gallons of crude into the Pacific Ocean.

The spill was the largest in U.S. history until the Exxon Valdez ran aground in Alaska’s Prince William Sound in 1989. The disturbing images of oil-soaked birds and waves pushing thick sludge onto 30 miles of sandy beaches galvanized the modern-day environmental movement and are credited with pushing voters to approve creation of the California Coastal Commission.

Even with its long history in California, Unocal’s presence in the state has dwindled markedly since it sold its gas stations and refineries.

Unocal’s “only connection to California now,” said Joe Quoyeser, a vice president at Boston consulting firm Charles River Associates, “is the executive office, which is one or two floors of an office building in El Segundo.”

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A long history

1879: Pacific Coast Oil Co. is founded.

1890: Union Oil Co. of California is formed in Santa Paula.

1900: Pacific Coast is bought by Standard Oil Trust and eventually is renamed Standard Oil of California, or Socal.

1901: Union Oil moves its headquarters to Los Angeles.

1911: Standard Oil Trust is broken up by order of the U.S. Supreme Court; Socal becomes an independent company.

1930: Socal strikes oil in Bahrain, its first Middle East well.

1932: Union Oil introduces the Union ’76 brand.

1940s: U.S. oil companies boost production for the war effort.

1961: Socal buys Standard Oil of Kentucky to sell gasoline in the Southeast.

1965: Union Oil gains national reach by merging with Pure Oil Co. of Illinois.

1969: Union Oil has a major spill off Santa Barbara.

1970s: OPEC oil embargo rocks the petroleum industry.

1980: Saudi Arabia nationalizes Socal’s joint venture for drilling in that country.

1983: Union Oil reorganizes under the name Unocal.

1984: Socal changes its name to Chevron and buys Gulf Corp.

1985: T. Boone Pickens leads an unsuccessful hostile takeover of Unocal.

1993: Chevron partners with the government of Kazakhstan to develop the giant Tengiz oil field.

1996: Unocal unloads the last of its California oil fields.

1997: Unocal sells its oil refining and marketing unit for $1.8 billion.

2001: Chevron merges with Texaco, forming ChevronTexaco Corp.

March: Unocal settles a human rights lawsuit over its pipeline in Myanmar.

Monday: ChevronTexaco announces that it will purchase Unocal for $16.4 billion.

Sources: Company reports, International Directory of Company Histories

Los Angeles Times