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third of the wells and produces about one-fifth of the oil. The statement of the Standard as to its purpose in entering the producing business is that it did so "in order to increase the supply of crude oil and to supplement the efforts of other producers in developing such difficult fields as West Virginia, where the expenses and the risks are especially great."
Aside from the small proportion of cases, therefore, in which the Company is itself the producer, it is when the oil is above ground and stored in the producer's tanks that the Standard first becomes interested in it.
As we drove back over (or rather through) the unspeakable roads of southern Illinois, fetlock deep with the stickiest clay mud I ever saw, a lone figure tramping cheerfully through the drizzle appeared, to typify this phase. A ten-foot pole in his hand and a flat leather case hanging at his side proclaimed him the gauger, the point of contact between producer and Standard. As he turned in from the road to the group of buildings indicating the center of an oil farm, we followed. Accompanied by the producer's pumper, who met him, he climbed to the top of the rough house covering the four-hundred-and-fiftybarrel tanks which receive the oil from the dozen wells on the farm.
Two tanks were full and ready for him. With an oblong brass instrument (known politely as the "thief") which he took from his leather case and let down to the bottom of the tank, he secured a sample of oil from the lowest layer. Pouring it out over his palm, he determined that the oil was of good quality, free from water and sediment. With his pole he measured the depth of the oil, recorded the figure on a blank known as a "runticket," and opened the valve which admits the oil to the gathering line of the Standard's pipe-line system.
The oil in the tank was now the property of the Standard, in accordance with a contract made with the producer when his first well began to flow. The next morning the gauger would visit the farm again, measure the depth of the oil remaining in the tank, record it on his run-ticket and shut and lock the valve. At night, when he returned to the office, the figures on the run-ticket would be telegraphed (the Standard has its own telegraph system wherever its pipe lines run) to the central office of the company for the Illinois field, the quantity of oil run would be figured out from his data, and the resulting amount placed to the credit of the producer.
As the producing company is very seldom the actual owner of the farm, the credit is divided, in the proportion fixed by the terms of the lease, between the producing company and the farm owner. The owner's royalty varies in different cases from one-sixth to one-quarter.
At any time within two months the producer (and the same is true of the farm owner) may elect to receive his pay for the oil so credited, at the market price ruling on the day he so elects. When he decides to accept payment, a check is sent him immediately; it may be within twentyfour hours from the time his oil is run, it may be sixty days later. If at the end of two months he has not requested payment, a check is sent him at the price ruling on the first day of the third month. The Standard provides the producer a market for his oil, taking it from him at the well, and giving him instant payment, if he wishes, at the market price, or the privilege of speculating on the price for two months.
In a field like Illinois the Standard provides the sole market for the producer. So the producer demands of the Standard that he be "taken care of," that his entire production be drawn off day by day, or as fast as his tanks are filled; and for this he has a very good reason. The business of producing oil is a peculiar one, from its uncertainty. As in every other kind of mining, there is no way of knowing the extent of the available supply. As a vein of ore often "pinches out" with disconcerting suddenness, so an oil field may run dry. But the owner of a coal mine or a gold mine knows that, whatever the supply of the mineral in his property may be, it is there and will stay there till he gets it out.
In an oil field, however, all the wells in a given section are drawing from one pool. If a producer stops drawing on the supply, his neighbor may get more than his share. Unlike the solid mineral, his oil may run away, and probably will, unless he makes every effort, and makes it continuously, to give it an outlet through his wells. This peculiarity of the supply leads to an interesting course of procedure in an oil field. Each producer drills first the wells nearest his neighbors' lines. These will draw, not only from the supply of oil beneath his own land, but from their portions of the pool. The wells in the center of his farm can wait; they will tap only his own supply of oil, not so likely to be drawn off by the competitor. If he can drill faster and pump faster, his share of the common fund in the pool below will be the greater.
A visit to another part of the field the next day showed how the Standard was doing its best to "take care of" the producer. On either side of the road, as we drove toward the main pipe-line station, a company of giant red cheeseboxes stretched in regular array over an area half a mile square. Each cheese-box, an iron tank ninety feet in diameter and thirty feet high, holds thirty-five thousand barrels of crude oil, bought from the producer, and paid for at a cost of nearly twenty thousand dollars. The sixty-one tanks on this "tank farm" contain over two million barrels of oil, representing an investment of a million and a quarter dollars.
On the far corner of the "farm" are eight or ten new tanks, in all stages of construction — one with its floor half laid, a second with the first layer of side-plates just being riveted into position, two others, side by side, being raced to completion by rival crews. The last of the group, with its wooden roof only half covered with its iron coat, is already two-thirds full of oil. For the producer cannot wait; he must be "taken care of."
Over each unfinished tank swarm gangs of men working with a will that brings one of these cheese-boxes to completion in ten days, and adds five thirty-five-thousandbarrel units to the farm's storage capacity every week. But this is only a new field; the stock of oil has been accumulated in less than eight months. In the Kansas field the stock of crude oil in storage amounts to twenty-one million barrels, bought and paid for, meaning an investment of between twelve and thirteen million dollars.
Beyond the tank farm lie two neat, square buildings of gray concrete, the tall iron stacks of the smaller proclaiming the pumping station. Here is the outlet of the oil field, the gate through which the petroleum from over three thousand wells pours out to the world. Within the large building a great triple expansion pump is drawing the oil from the nearest tanks of the "farm" and pushing it on through the two lines of pipe, one eight inches in diameter, the other twelve, stretching away toward the east.
Forty miles away another pumping station, similar in every detail, will take the oil, made sluggish by the friction of its long journey, and give it a fresh impulse for its onward journey. Two hundred miles from the start the oil, three times refreshed in its course, will join a greater
stream moving steadily from the west to the seaboard. Thirty-five thousand barrels a day this great pump is pouring out; in a few months two companion pumps, somewhat smaller, but by no means babies, will join in the work; for the product must be "taken care of."
Converging to this gateway from all parts of the field, five hundred miles of pipe line, varying in size from twoinch at the wells to eight-inch at the outlet, gather the oil from the producers' tanks. And all these lines, with the two hundred miles of line (double most of the way) affording the outlet to the East, have been built in eight months. So in each field — Pennsylvania, West Virginia, Illinois, California, Kansas, Ohio — miles on miles of gathering lines are bringing in the flood of oil to the gateways to be poured out through the trunk lines to the refineries on the seacoast, and the lake shores, and at vantage points for railway and river transportation. Eight thousand miles of trunk pipe lines the Standard has, fed by seventy-five thousand miles of gathering lines. By these means, and by means of hundreds of storage tanks on the "farms" in every field, the producer is being "taken care of."
The center of the Standard system is the refinery. On one side of it stretches out the network of pipe line bringing in from thousands of wells the crude oil; on the other, a distributing system of even greater extent carries to the markets of the world the refined products. Refining was the first business of the Standard; it is still its principal business. In the year 1906 the Standard produced 23,000,000 barrels of refined oil, a quantity sufficient to last a family using five gallons a week nearly four hundred and fifty thousand years. If that one year's product of refined oil were to be stored in a single tank of the diameter of the storage tanks in the oil fields, the tank