For Peoples' People

OIL & GAS

Near Joliet, Ill. one afternoon last week, a group of oilmen and Chicago city officials assembled around a 30-in. pipe. While the state flags of Texas and Illinois fluttered in the breeze, the wheel of a big control valve was turned. There was a rearing whoosh, and gas from Texas began to flow to Chicago through a new 1,417-mile pipeline.

The pipeline, which cost a thumping $135 million, was laid by a subsidiary of Peoples Gas Light and Coke Co., Chicago's only gas supplier and one of the biggest in the U.S. It marked the latest step in a huge expansion program, which in four years has added 70,000 new customers for Peoples, boosted its sales by 49% to $66.6 million last year. Chairman James F. Gates, 52, the man responsible for this growth, hopes that the new pipeline will ease Chicago's gas shortage, but he isn't sure it will. There are still 100,000 gas-less Chicagoans.

In the Beginning. When Peoples was founded 96 years ago, the market in Chicago (pop. 80,000) was small. As the city mushroomed and other companies came in, Peoples won a series of rate wars, absorbed twelve competitors, and by 1907 had the market to itself. As demand spared still higher, it bought into a pipeline company with gas reserves in Texas, helped build the first long-distance pipeline, began selling gas to heat homes.

By the end of World War II, the company's biggest problem was a lack of supply. To help solve it, Peoples brought in Illinois-born Jim Dates, a Northwestern-trained lawyer who had bossed purchasing policy for the Ordnance Department for two years during the war, previously made a name as an expert in utility law.

Under the Dome. Peoples was part owner of a pipeline from Texas. Oates's first move was to acquire it outright for more than $42 million, thus got control of a second pipeline under construction. Gates then formed another pipeline subsidiary with $120 million capital, and last year started the new 30-in. line snaking its way up from the Gulf Coast.

Jim Oates's newest pipeline will boost the Chicago area's natural-gas supply by 374 million cubic feet daily, an increase of 73%. Gates is working on still another method of satisfying his customers. His company has leased 12,000 acres of land outside Joliet, under which is a domelike geological formation. In the next few years, Gates plans to start pumping surplus gas into the ground there each summer, store it for use in the peak winter season. Developing this vast storage space (90 billion cubic feet) will cost $50 million, but spending that kind of money has never yet fazed Jim Gates.

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