OIL: Pipeline to the West

Said Dallas Oilman Lowell M. Glasco last week, “This is the greatest thing that ever happened to the Texas oil business.” Though somewhat exaggerated, Glasco’s news was indeed big; he was ready to build the first crude-oil pipeline between the west Texas oilfields and the oil-hungry West Coast. The line, to be built by Glasco’s West Coast Pipeline Co., will cost $87 million, be as big as the Big Inch (24 in.). Starting from Wink, Texas, it will snake through 953 miles of Texas, New Mexico, Arizona and California, terminating at Norwalk, near Los Angeles. It will be able to carry an initial load of 180,000 bbls. of crude a day when it is completed in the fall of 1953. As a “common-carrier,” it will transport oil of independent as well as major producers.

The Government also agrees that Glasco’s pipeline is a big thing. It gave him a fast tax write-off on 25% of the line’s construction cost and priorities for 214,000 tons of steel. These terms made the whole deal look so good that last week two Manhattan financial houses, Union Securities Corp. and White, Weld & Co., agreed to manage the underwriting of the entire $87 million. To build the pipeline, Glasco had lined up Burt Hull, builder of both the Big and the Little Inch and the 1,068-mi.-long line across the desert of Saudi Arabia, named him the company’s chairman of the board.

Business Aplenty. There is plenty of need for the pipeline. Texas oil shipments to the West Coast now go by tanker through the Canal or by railroad. These carriers currently aren’t carrying all the crude needed. Glasco estimates that California refineries could use 100,000 bbls. more a day. The line will also help the California oil industry. Since California wells can’t keep up with consumption, oilmen are pumping their wells so hard that they are clogging the pores in the oil sands, thus endangering the future yield. By offering to ship the first barrels for 60¢ and promising to slice that down to 50¢ when his volume goes up, Glasco expects to chop a dollar in transportation costs off every barrel that now goes by tanker or rail.

Trouble Galore. Glasco has had a long fight for his line. A handsome, burly (6 ft., 210 Ibs.) oilman whose father brought in the first well in Oklahoma’s Key West Field, Glasco has been tramping through Washington offices for years asking for permission to build the line. Last March he took his problem to Arizona’s Senator Ernest W. McFarland, who persuaded the Petroleum Administration for Defense to okay the line. To benefit Arizona, Glasco agreed to tap his line with a $17 million refinery in Florence, Ariz, capable of processing 15,000 bbls. of crude a day. Glasco hopes to slash petroleum costs in Arizona drastically; they are now among the highest in the U.S., since every drop must be brought in by truck or railroad car.

In Dallas, Glasco reported that he already had commitments to ship 40,000 bbls. a day the minute the line is finished, figured that he needed only about 15,000 more a day to break even.