The discovery of the water beneath Sutton County is the event credited for the settlement of Sonora. During the period 1891-1894, there was a rapid increase in the drilling of wells in the county with up to six horse-powered drilling rigs operated in the county throughout that period. The new drilling rigs brought the prolific aquifers under the county within reach of the landowners above them. A good example of the period is the well on the D.J. Wyatt ranch, drilled to a depth of 190 feet through three layers of limestone. It took six months to complete.
Amid this rash of drilling, there was an omen of things to come. In 1892, while drilling on the J.T. Cooper ranch west of Sonora, at the 390-foot level a stratum of oil was discovered which flowed 6 barrels per day until the gas pressure was dissipated. Mike Murphy, owner of the Devil's River News (founded in 1890) obtained a sample of the oil and used it to lubricate his printing press, while extolling the lubricants' quality in his newspaper. Since this accidental discovery of oil and gas in the county, hydrocarbons have been an increasingly important component of the Sonora economy.
In the early days of petroleum exploration, liquid crude was the sought-after prize. But producers found that crude oil rarely came up the hole alone. Along with the oil came salt water, tarry materials, clear liquids such as kerosene and butane, and a colorless, odorless natural gas.
Liquids could be captured and shipped, but in the early days natural gas could not. In Texas oilfields, natural gas often was burned away, or "flared," as a waste product. However, geologists and engineers came to realize that natural gas often served as the driving force that brought the heavier hydrocarbons to the surface. This discovery had two major consequences: it promoted the conservation of both oil and gas, and it gave natural gas economic value.
Over time, as an infrastructure of pipelines grew beginning in the 1930s, natural gas developed into a commercial commodity, in some cases even surpassing crude oil in both production and value for some major domestic producers. Although oil and gas have been produced in Sutton County since the 1930's, it was in the latter half of the century that natural gas became the dominant hydrocarbon produced.
Although the price of crude oil and natural gas are driven by different market factors, both products are subject to cyclical imbalances of supply and demand. These swings in the marketplace have resulted in the classic "boom and bust" history of the industry.
Recovery from war shortages following World War II resulted in the steady addition of oil and gas supplies and near equilibrium of supply and demand until political unrest in the Middle East in the 1970's shocked the world and created shortages. This series of events spurred an unprecedented surge in domestic exploration for oil and gas, resulting in a "boom" in new and increased production. But, by the early 1980's the volume of new production began to exceed demand. By the time price deregulation came about in 1985, oil prices were headed down, and at the same time, over-supply had moved into the gas market-the so-called "gas bubble." Producers were hit with sharply lower prices because there was too much gas available. Many other causative factors were at play as well, including conservation, environmentalism, technological advancements and the weather (a significant demand determinate). The late 1980s were marked by uncertainty as the gas market moved toward a market-oriented environment after deregulation.
During the 1990s, gas continued its development as a competitive market while demand caught up with supply. According to the EIA, from 1990 through 1999, U.S. natural gas consumption increased by 16 percent due in part to its greater use as an industrial and electricity-generating fuel because of its relatively clean-burning qualities compared to other fossil fuels, such as oil or coal.
Sutton County gas production reflected these growth trends. Between 1972 and 1999, gas production in Sutton County was up 225% to almost 55 Billion Cubic Feet, the sixth largest increase of any producing county in the State.
During the first half of the new decade, hydrocarbon prices continued to climb and show wild volatility - beyond the norm for changes in supply and demand. National natural gas spot prices spiked as high as $10.50 per Mcf in December 2000. Regional gas prices soared above $30 per Mcf in California, where the costs of fuel triggered a crisis in that state's utilities. Some analysts suspected that new and expanded trading practices were also influencing prices.
Then, at the crest of the price climb with prices bordering on $11.00 per Mcf and Sutton County production at an historic high of almost 90 Billion Cubic Feet annually, the recession set in as demand slackened and prices plummeted to $3.00 by mid-2009. As a result, Sonora and Sutton County experienced a double-barreled economic slowdown due to the virtual shutdown in drilling operations and reduced production due to falling gas prices, as well as a general reduction in economic activity due to the national recession and crisis in world financial markets.
In the year 2010, we began to experience the start of the rebuilding process. After the rig count went to zero in mid-2009 and production slackened in late 2009 to near-1999 levels of 5 Billion Cubic Feet per month, there is now some regional activity and we are optimistic that production will increase as prices and demand improve.
Located within the Val Verde and Midland Basins, the Canyon Sand formation beneath Sutton County has provided commercial gas production for over 35 years. The area of this producing horizon covers over 10 counties in south central Texas with concentrations in Sutton, Crockett, and Edwards counties. With this dependable and prolific hydrocarbon source and the operational infrastructure that has evolved in Sonora to support drilling and production operations, Sonora continues to be a promising location for gas-related businesses.