Oil Week

Newest method of distributing gasoline--and great current boon to the steel industry--is cross-country piping.* Last week a new Great Lakes Pipe Line Co. (jointly formed by Barnsdall Corp. and Continental Oil Co.) announced it would build a 1,400-mi. line with capacity of 30,000 bbl. daily to connect Barnsdall and Continental refineries in Oklahoma with Des Moines. From Des Moines a four-inch pipe will run through Iowa and Nebraska to Minneapolis and St. Paul. A six-inch line will join Des Moines and Chicago. Another four-inch line will run from Chicago to Milwaukee. The entire system will cost approximately $12,000,000.

President of Great Lakes Pipe Line Co. is Daniel James Moran, president of Continental Oil Co. which is J. P. Morgan- dominated. Great Lakes Pipe Line chairman is Edwin B. Reeser, conservative but optimistic president of Barnsdall Corp., stout defender of the five-day week.

Barnsdall Corp. last week purchased controlling interest in Mona Motor Oil Co., independent oil and gasoline distributor in Iowa, Nebraska, and South Dakota. The acquisition links Barnsdall's South Dakota and Northwestern marketing systems with its Oklahoma and Kansas chains of bulk and retail stations.

P: In Texas a committee organized at the request of the Texas Railroad Commission to study oil conditions suggested a reduction of 126,000 bbl. of crude in the State's average daily production. Present daily average is 863,450 bbl. Maximum demand according to the committee is 76,500 bbl. less than the average production.

P: In what was reported as one of the largest cash deals in oil history, Sinclair Consolidated Oil Corp. last week sold for $72,500,000 its 50% ownership in Sinclair Crude Oil Purchasing Co. and Sinclair Pipe Line Co. to Standard Oil Co. of Indiana which already owned the other 50%. Sinclair Consolidated, with only $34,189,000 invested in the two companies, made the staggering profit of $38,000,000 on the deal--which eclipses even the $23,000,000 which hard-bitten Leonor Fresnel Loree made for his Delaware & Hudson when he sold his control of Wabash and Lehigh Valley to Pennsylvania. The sale is first step in pipe reorganization in Texas, Wyoming and mid-continent oil fields. Next step: acquisition by Sinclair of Prairie Oil & Gas Co. and Prairie Pipe Line Co.

P: The U. S. Government last week rested its case to prevent the merger of Vacuum Oil Co. and Standard Oil Co. of New York, both offspring of the oldtime huge Standard Oil Co. of New Jersey. Vacuum and Standard reasons for merger are that they must face severe competition in New England and New York from Sir Henri Deterding's Royal Dutch Shell Oil. Testimony showed that Shell's 1929 sales in the district were 7,175,241 bbl. of 42 gal. each. Combined Standard and Vacuum 1929 sales in the same district were more than 17,500,000 bbl. of 50 gal. each.

During the taking of testimony, Harold F. Sheets, an oldtime Vacuum official, sketched the history of the oil industry since 1911, when the Standard of New Jersey trust was dissolved. In 1907 Standard of New Jersey handled 82% of U. S. petroleum business, and in that year there was not a single gasoline filling station in New York City. Standard Oil was then mostly household kerosene and machine oils, and Standard had an unchallenged monopoly. In 1904 (when Standard of New Jersey made a $62,000,000 profit) there were only 55,000 automobiles registered, 6.908.000 bbl. of gasoline produced in the U. S. Last year there were 26,501,000 automobiles registered, 447,-000,000 bbl. of gasoline produced. The sale of lubricating oil in this period, said Mr. Sheets, had risen only 4 1/2 times, the production in gasoline 64 times.

P: The Interstate Commerce Commission last week reported the net income of 37 pipe line companies for 1929 as aggregating $142,216,242. Largest net was Humble Pipe Co.: $27,260,314 (it declared dividends of $25,000,000). Next was Prairie Pipe Line Co.: $22,182,804 (dividends: $20,250,000).

*Novel is the idea of piping gasoline (not crude oil) across country. First company to do this was Standard Oil of New Jersey, which recently converted its 380-mi. crude oil pipe from Negley, Ohio to Bayonne, N. J., into a gasoline line. Most important of proposed gasoline pipe lines are: Magnolia Petroleum Co.'s go-mi, three-inch line from Luling, Tex. to San Antonio; Sun Oil Co.'s 500-mi. Susquehanna line from Marcus Hook, Pa. to Pittsburgh, Cleveland, Akron; Phillips Petroleum Co.'s 800-mi. line from Texas Panhandle to St. Louis and Kansas City.

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