| Francois Micheloud's Homepage | En FRANCAIS s'il vous plaît |
 |
| 6.5 The Pipelines | ||||||
| The possibility of carrying oil through pipes had been thought of from the beginnings. In 1863 Samuel Van Syckle tried, under heavy mockeries from the other oilmen, to carry oil trough a 5 miles long pipe buried under 60 cm of earth. When the pipeline began working satisfyingly, charging only 1 $ a barrel, hundreds of teamsters (who so far earned 3 $ a barrel for transportation) tried to destroy the pipeline ! The sheriff had to post guards to protect it, and soon others pipelines were built. Transport on men's backs or on carriages disappeared quickly and everyone started building its own pipeline. |
The first pipelines were guarded by armed men |
|||||
|
. In 1872, John D. Rockefeller had bought United Pipe Lines, a group of small lines. Four years later, in 1876, he already controlled the half of all existing pipelines, through the active work of his lieutenants. After a price war and with help from the railroads he succeeded in eradicating his main competitor in this business, colonel Joseph Potts' Empire Transportation Company which passed over to him sword in hand by the weeping colonel. At the end of 1879 he controlled almost all pipelines built in the USA.
In 1879, Pennsylvania's independent producers succeeded in building a pipeline they owned, the Tidewater. Rockefeller first tried to have the government forbid the project, then to buy land on the pipelines proposed way, but without success. This was a major defeat for him, as now the public could see the independents' oil flow freely to the consumers and the price fixing scheme of the Standard Oil appeared in public light, like the railroads deals. An investigation was started and Rockefeller had to testify, but with little success. Rockefeller began to foment dissentions in the midst of the Tidewater, trying to damage its credit, to buy its directors, to suit it. In the meanwhile his men were buying the Tidewater's stock in secret. He finally took control of the company in 1882. Now the totality of America's pipelines were again under his firm control In oversupply episodes, especially after the discovery of the famous Bradford field in 1877, his almost perfect control on the carrying of oil from the fields to the refineries allowed Rockefeller to dictate the price he wanted to pay for the crude oil. This was possible because the oilmen could not store the enormous quantities of oil they extracted, and their only option was to sell it at bargain prices to Rockefeller if they didn't want to see it run to the ground and earn them nothing but tears.
|
||||||
