California pioneers after 1848 discovered an increasing number of oil seeps—oil seeping to the surface, especially in Humboldt, Colusa, Santa Clara, and San Mateo counties, and in the asphaltum seeps and bituminous residues in Mendocino, Marin, Contra Costa, Santa Clara, and Santa Cruz counties. In southern California, large seeps in Ventura, Santa Barbara, Kern, and Los Angeles counties received the most attention. Interest in oil and gas seeps was stirred in the 1850s and 1860s, becoming widespread after the 1859 commercial uses of oil were demonstrated in Pennsylvania. Kerosene quickly replaced whale oil for lighting, and lubricating oils became an essential product in the Machine Age. Other uses later in the 19th century included providing paving material for many roads and providing power for many steam locomotives and steam-powered shipping—replacing coal.

Oil became a major California industry in the 20th century with the discovery of new fields around Los Angeles and the San Joaquin Valley, and the dramatic explosion in demand for gasoline to fuel the rapidly growing number of automobiles and trucks now being produced. Most of the oil production in California began in the late 19th century. At the turn of the century, oil production in California continued to rise at a booming rate. In 1900, the state of California produced 4 million barrels. In 1903, California became the leading oil-producing state in the US, and traded the number one position back and forth with Oklahoma through 1930. Production at the various oil fields increased to about 34 million barrels per year by 1904. By 1910 production had reached 78 million barrels. California drilling operations and oil production are concentrated primarily in Kern County, the San Joaquin Valley, and the Los Angeles Basin.