Tret-O-Lite and Petreco: The Birth of Petrolite Corporation (P4)

The Unstoppable Merger: Tret-O-Lite and Petroleum Rectifying Company Join Forces to Form Petrolite Corporation – Redefining Crude Oil Treatment for Decades to Come.

In this Part 4 of my four-part series on William S. Barnickel, I describe how it takes a particular type of person to go after a challenge in any technically challenging field with little to no experience and solve problems—through his hard work and knowledge of chemistry William S. Barnickel, a St. Louis chemist, developed the first chemical crude oil emulsion breaker leading him to found the Tretolite company. In Part 1 and Part 2 of this series, I describe Barnickel’s research and the commercial start of Tretolite. I also describe how he discovered the first chemical emulsion breaker and expanded it to include a range of chemical agents to separate crude oil from produced water. In this post, I describe the evolution of Tretolite into Petrolite.

In Part 3 of the four-part series on William S. Barnickel, I describe how Barnickel never witnessed the extraordinary growth of his company supplying chemical products and processes. A complication in an unfortunate surgery failed to repair a perforated ulcer, and he passed away at 45 years old.

Following Barnickel’s death, the previously appointed executors and trustees of his estate were Sears Lehmann, John S. Lehmann, and Frederick W. Lehmann Jr., executors of his will. He left instructions that gave one-third (1/3) of the income in his estate to his young daughter Genevieve Barnickel, One-sixth (1/6) of the income to each of his sisters, Mrs. Della Barnickel Singer, and Mrs. Leonora Barnickel Taylor, and the final one-third (1/3) divided between employees and close friends. Sears Lehmann, Frederick W. Lehmann, Jr., John S. Lehmann, Herbert L. Barthels, Miss Katherine Purcell (Barnickel’s long-time secretary), F. C. Reyburn, F. L. Kelley, C. C. Averill, Bernard Keiser, and Eugene O. Sanguinet. Barnickel’s will states that if his sisters died before his daughter, their interests given by the will would go to his daughter or her children equally.

He directed the business of the William S. Barnickel and Company, the partnership where John S. Lehmann has a 10% stake in the company's profit would continue in the business he had begun. All of Genevieve’s stock in William S. Barnickel and Company was held in trust and, by its terms, would be terminated upon her death. Much later in the corporate life of the business, this stipulation would factor in a significant way. In time his daughter married John V. Janes, and they had a son Michael V. Janes.

As the William S. Barnickel Company evolved into the Tret-O-Lite Company, it was the dominant provider of chemical emulsion breakers in the oil and gas industry globally.

At the same time, Barnickel was working in the oilfield to invent a chemical emulsion breaker for operators; physical chemist, entrepreneur, professor, and philanthropist, Frederick Gardener Cottrell in California, was investigating using electricity to separate particles in smokestacks.

Frederick Gardener Cottrell - Inventor of Electrostatic Separators

In the early days of industrialization, smokestacks belched out thick plumes of smoke and harmful micro particles, causing severe pollution and health hazards. However, Cottrell developed a revolutionary technology known as the electrostatic precipitator to address this issue.

In a basic description, electrostatic forces attracted the charged smoke and dust particles to the oppositely charged collection plates. This effect, known as electrostatic attraction or precipitation, caused the microparticles to migrate toward the plates. The charged particles adhere to the collection plates and are effectively removed from the smoke. Over time, a layer of accumulated particles called the "precipitate," formed on the surface of the plates.

Cottrell’s early work focused on using electrostatic precipitation to collect sulfuric acid from acid mists. While doing this, he learned his approach could collect fly ash, dust and fumes, acid mists, and fogs that spewed from turn-of-the-century plants and contributed to industrial air pollution. In 1906, Cottrell applied electric current to a small laboratory device emitting sulfuric acid mist, and the concept became a reality.

Cottrell applied for a patent on his electrostatic invention in 1907. The U.S. Patent Office granted a patent on August 11, 1908, U.S. 895,729, titled, Art of Separating Suspended Particles from Gaseous Bodies.”

Figure 1 - Basic Process Diagram of Cottrell’s Electrostatic Precipitator

Cottrell, learning about the water-in-oil emulsion problem, ran experiments to investigate if electricity could also work to separate particles of water in oil. The process begins by passing the emulsified crude oil through an electrostatic precipitator. Inside the device, an electric field is generated, which charges the water droplets and other impurities present in the oil. This charging is achieved by applying a high-voltage electric current.

Once charged, the water droplets gain an electric charge, either positive or negative. The charged droplets are then subjected to electrostatic forces within the precipitator. These forces cause the droplets to be attracted to oppositely charged collection plates or electrodes. The charged water droplets are pulled toward the collection plates due to the electrostatic attraction. As they approach the plates, they adhere to the surface and are effectively separated from the crude oil. Over time, the separated water droplets accumulate on the collection plates, forming a layer. To remove these droplets and maintain the efficiency of the electrostatic precipitator, the plates are periodically cleaned by dislodging the accumulated water.

Cottrell patented his invention of using an electrostatic precipitator to treat crude oil emulsion. He claimed that using an electrical current, the water droplets in the crude oil can be effectively separated, reducing the BS&W content. Just as with Barnickel’s chemical approach to breaking crude oil emulsion, Cottrell’s electrical process improved the quality of the oil, making it more commercial for various applications and reducing potential issues during transportation and refining.

Cottrell’s invention worked by sending the crude oil emulsion into the electric field in two distinct ways. In the older design, a simple distributor introduces emulsion above the water level but below the electrodes. The emulsion then rises through the electric field, with the larger brine droplets being separated from the oil in the weak field below the electrodes while the smaller droplets coalesce in the strong field between the two energized electrodes. In the more modern design, the emulsion is introduced directly between the electrodes so that the emulsion moving through the electric field has a horizontal motion.

On May 20, 1909, Cottrell and co-inventor Speed filed a patent application. On March 21, 1911, they were awarded, U.S. Pat. No 987,115 titled, “ Separating and Collecting Particles of One Liquid Suspended in Another Liquid.” The named inventors are Frederick Gardener Cottrell and James Buckner Speed. Interestingly the words “emulsion” and “crude” are not in the patent text. Perhaps by not putting those words in, the US Patent Office didn’t dispute the application as they did with Barnickel’s first patent application.

Cottrell & Speed First Patent for Electrostatic Liquid Treatment

Cottrell used the profits from his invention to establish Research Corporation, a foundation that funds scientific research. He tried to donate the patent to organizations, but they refused. With the help of others, he created a board of directors who invested $10,100 to fund the organization. The board shared Cottrell's vision of using profits from inventions and patents to support scientific research. The precipitator business was successful, and philanthropy supported the scientific community and Cottrell's research.

In 1909 Cottrell and Speed set up a plant in California’s Coalinga oil field to treat emulsified crude oil. They received a half-cent per barrel royalty on the recovered oil or about $3 daily. Despite early success, the process became increasingly challenging to make money at this rate. Speed relinquished his share of the patents for cash and pursued other interests. Cottrell stuck with the project and brought in Walter Schmidt and Allen C. Wright, two former college pupils. Both met Cottrell at Berkeley. They worked to set up a second plant at Orcutt, Santa Maria Field in California. They discovered how emulsions can vary significantly by geography and formation. They suspended operations after 12 months of effort and spending more than $10,000 in borrowed money. In 1910 Cottrell sold the business rights to Wright for about $5,000 for his share.

Wright took the process and incorporated many innovations based on his work in the previous plants. Those changes were successful, and he increased the fee to 12.5 cents for each barrel of water removed. With this success, Wright convinced Henry S. Howard, a San Francisco businessman, to join him in a new venture. Together they purchased all known precipitation patents for dehydrating petroleum that would allow them to expand the business. In 1910, Wright and Howard formed the Petroleum Rectifying Company of California (Petreco).

After selling his oil treating rights, Cottrell joined the U.S. Bureau of Mines in 1911 with a passion for public service and the environment. The Bureau was the primary agency for conducting scientific research on mineral resources in the US then. After setting up an office in San Francisco, Cottrell fulfilled multiple roles within the Bureau, including director in Washington, D.C. During World War I, Cottrell played a crucial role in making helium production financially feasible, which began as an experimental process for use in balloons and dirigibles at the Bureau of Mines in 1917. The high cost of $1,700 per cubic foot of helium at that time made it impractical for use in the war. However, Cottrell's search for a low-cost process to extract helium from oil well gases resulted in its commercial availability at a mere 1 cent per cubic foot by 1920.

Wright went looking for new opportunities, which he found at Union Oil Company. They agreed to a contract calling for a 10-unit plant at Avalia, the terminal of Union’s pipelines from the Santa Maria-Orcutt-Lompoc districts. The oil leaving Petreco’s dehydrating units was fed directly into Union’s crude oil stills, increasing their output from 12,000 to 15,000 per day by removing water and salts from the oil.

Unfortunately, as fate would have it, Allen Wright died in the spring of 1913, creating a crisis for the new company. Losing Wright meant the company lost not only its Chairman, President, and General Manager, but also much of its fabrication, analysis, and research ability. Balfour D. Adamson would succeed Wright. He would hire Harold C. Eddy of Los Angeles to pick up the pieces and complete the Union Oil installation. At 31, Eddy was considered an oil man and an oilfield veteran. His background in electroanalysis and oilfield production was needed at the right time.

The Union Oil units and operations were fraught with problems from the start. Eddy wrote in his journal, “It was like a nightmare you keep hoping will end.” At times all of the Petreco units caught fire at the same time from failures with wiring. With constant improvements in the field, the treaters gradually became stable, and Eddy could meet the 15,000 barrels a day target. In 1914, with the company showing a nice profit, it completed its first wholly redesigned dehydration plant. It was incorporated into a 6-unit Standard Oil of California plant at the Murphy Coyote lease near Fullerton, California. In 1917 the company shipped Petreco units to Comodora Rivadavia in Argentina, making its first international application.

The Petreco company continues to expand with more and more units going out. By 1922, Petreco had 417 treater units in operation, 320 in California, 55 in Texas, 12 in Kansas, 5 in Arkansas, and 25 in foreign countries, primarily Argentina and Egypt. As it grew, it was running into a new kind of competitor. That competitor came in a barrel of chemicals supplied by Tret-O-Lite Company. They quickly learned Tret-O-Lite could quickly separate crude emulsion without first needing to install and power an electrically driven process. These were radically different approaches to solving the crude emulsion problem.

Late in 1930, a significant acquisition occurred. The Petrolite Corporation became the parent company for the acquired subsidiaries Petroleum Rectifying Company of California (also known as Petreco) and Tret-O-Lite. The companies joined to form a new company that dominated their respective fields in crude oil dehydration. Each was already the master of their markets with little to no competition in many regions. They would grow their dominance by adding the ability to treat oilfield fluids using electricity and chemicals. The merger created a more robust and more diversified organization. Here's a description of the merger and the formation of Petrolite:

Tret-O-Lite was a notable company specializing in developing and producing chemical additives and solutions for the petroleum industry. Their expertise would come to be recognized for creating products that enhanced the performance and efficiency of oilfield operations.

Petreco, on the other hand, was a well-established company engaged in manufacturing equipment and providing services for the oil and gas industry. They focused on designing and supplying equipment such as separators, filters, and treaters, which were crucial for oil refining and production.

Recognizing the complementary nature of their businesses and the potential synergies, Tret-O-Lite and Petreco agreed to merge their operations. By combining their resources, expertise, and product portfolios, they aimed to create a stronger and more comprehensive company that could better serve the evolving needs of the petroleum industry.

The merger resulted in the formation of Petrolite Corporation, a new entity that inherited the best of both companies. Petrolite became a leading provider of a wide range of solutions for the petroleum industry, encompassing both chemical additives and specialized equipment. The company's offerings included products for drilling fluids, production chemicals, fuel additives, water treatment, and advanced equipment for oil and gas processing and refining.

Petrolite's merger allowed them to leverage the collective knowledge and capabilities of Tret-O-Lite and Petreco. They could now provide integrated solutions to their customers, addressing various challenges faced in oilfield operations and refining processes. The combined expertise of the two companies enabled Petrolite to develop innovative solutions that improved productivity, efficiency, and environmental performance across the petroleum industry.

Through the merger, Petrolite strengthened its position in the market, expanded its customer base, and enhanced its research and development capabilities. The formation of Petrolite marked a significant milestone in the petroleum industry, bringing together two respected entities to create a unified and formidable force in chemical additives and equipment for the oil and gas sector.

I am grateful to Chris Oversby and Danny Durham, two executives in the energy chemicals industry, for kindly providing me with historical documents related to Barnickel and Petrolite. These documents have been immensely beneficial for my research and have aided me in creating several posts on this topic.