Burt E. Hull Interview - Burt E. Hull Interview [part 6 of 6]

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  • Well, the government says, within less than a month they said,
  • "We're going to build a pipeline, and we're going to force you to move all that, that pipeline will hold to the Atlantic seaboard through the pipeline.
  • We're going to charge you sixty cents a barrel or sixty five cents a barrel, I've forgotten what.
  • We haven't got anybody in the government that knows anything about pipelines.
  • You've already--you're going to build a pipeline anyhow.
  • You projected a pipeline.
  • You were going to build one.
  • We'll just take that.
  • We'll save you the job of financing and the government will build it itself and operate itself.
  • And charge you an arbitrary sixty cents a barrel, or sixty
  • five cents, I've forgotten now what it is.
  • And that'll be your cost of moving up here.
  • And whatever your cost was in August, why you'll get the difference in, in what do you call it?"
  • O.- Subsidy. H.- Subsidy. Well Ickes then went to Jesse Jones, who was head of the Reconstruction Finance Corporation, said, "The government wants to build this line. It's going to cost,"--what did it cost? I've forgotten now, "two lines we want to build."
  • Well, they didn't do it all at once; it was in three different, four different moves, they do line.
  • First they were going to--they went at it by steps.
  • The first step was to build half of the crude line to Norris City, Pennsylvania--Norris City, Illinois.
  • There take it out of the pipeline, put it on tank cars.
  • That'd save half a tank car haul anyway, and half of the tank cars.
  • There wasn't enough tank cars to haul all the oil.
  • Then they decided to build it, extend it from Norris City on to Newark, New Jersey.
  • That was the crude oil.
  • The products line was handled the same way.
  • It started at the refineries on the Gulf Coast and ended at a place in Indiana--I can't think of the name of the place, where it was taken off.
  • It was to be taken off of the pipeline and put on tank cars, to save half the tank car rate on products.
  • But that same thing happened there.
  • We just kept going from that point in Indiana went right on to Newark with it.
  • We never did ship anything from that point--oh, what's the name of it, I can't think of it now.
  • I know there was a lot of scandal in the paper about it at the time because they said we hadn't stopped our pipeline.
  • And we were going on into Newark with it.
  • We had two companies that were opposing the thing that had production, that they supplied our
  • line at Ohio and at Chicago, the Standard of Indiana, and the Allied Oil Company.
  • They opposed it because they weren't supplying out of the Gulf Coast.
  • Anyway, we finished both lines, finished one line in August, 1942, and the other one about a month later.
  • And by April or May, 1943, the government had saved enough in subsidies over what it actually cost to pay both lines out.
  • What was the V-J Day?
  • O.- In 1945.
  • H.- That's when both lines shut down.
  • O.- Yes, September 2, 1945.
  • H.- Well, my recollection is something like three hundred million dollars saving in subsidies of cost over what it would have been if they'd paid for transportation some other way.
  • Now, in addition, the government had no further use for those lines.
  • They sold it to the Texas Eastern Transportation Company for gas lines.
  • And got every damn cent they put into it.
  • O.- Why do you call them Big Inch and Little Inch?
  • H.- Well, that was done by newspaper writers.
  • Years ago, any pipe bigger than, let's say, ten inches in diameter was called big inch pipe.
  • Any pipe ten inch or less, ten inch and eight inch and six inch, any other size was called little inch pipe.
  • And that, that expression was used commonly among workmen.
  • O.- Yes. H.- Now when the newspaper writers began to make stories about the governments' two lines, they heard these expressions and they began immediately to dub the twenty-four inch crude line as the Big Inch, because it was such a large line.
  • Nobody believed that you could move
  • more than one grade of crude oil through one single line at once, and keep it segregated as crude oil.
  • In other words it's bound to mix up somewhere in that line 1300 miles long, why, somewhere it would mix.
  • But those who advocated it, even the oil companies, decided that if it didn't lose too much speed, kept it at a velocity of 4 miles an hour or more, it wouldn't mix.
  • It would shove itself out you know.
  • As it goes down in a sag, why, one grade of oil would shove out the other one ahead of it, without the necessity of putting in slugs of water, which were in batches to keep one grade from mixing with the other.
  • See, some grades of crude oil--it depends on what you're going to make of the crude, whether you're going to make lubricating stocks, or whether you're going to run it to asphalt, or what--some grades are suitable for one thing, some suitable for others.
  • So the refineries are rather particular in getting the particular crude that they buy because they bought it for a certain purpose.
  • Some haven't got refinery equipment to run profitably some grades of crude.
  • So they're very particular.
  • They want to get the identical oil that they bought.
  • And they didn't believe you could do that in a line so big in diameter as 24 inch.
  • And it remained for us to prove that by actual proof of it, which we did.
  • And I remember the products line.
  • The government wouldn't ship any natural gasoline through that line for awhile.
  • And that was the big product on the Gulf Coast and what they needed worst on the Atlantic seaboard.
  • So they said, "We can't afford to lose one gallon of that aviation gasoline."
  • And we said, "We won't lose one gallon for you."
  • Well, we'd rather have it in tank cars and pay the extra cost of freight because we want to get up to there, we want to get every gallon.
  • And we know what we can
  • do in tank cars, but we don't know what you can do with your damn old pipelines."
  • So we says, "Let us try a batch of it, from Philadelphia, from Sinclair Plant."
  • And, "All right, here's a hundred thousand barrels, try that."
  • So we didn't lose any.
  • And sure enough when we got through, we moved several million barrels of natural gas.
  • Finally they let us move it all.
  • But we moved several million barrels of natural gasoline from the Gulf Coast Refineries to the Atlantic seaboard, and delivered it back to the government up there.
  • And we delivered more natural gasoline in Newark, New Jersey than we received in Beaumont, Port Arthur, and Houston, Baytown.
  • Now that sounds impossible, it is impossible.
  • The whole answer is this: that we were able to by a little fanagling we mixed some house brand with aviation gasoline somewhere along the route.
  • And were able to convince inspectors, government inspectors at Newark that it was all natural gasoline, it was all aviation gasoline.
  • So that worked out all right too.
  • We saved the government lots of money.
  • O.- How big was the Little Inch?
  • H.- Twenty inch.
  • O.- Twenty?
  • H.- Twenty inch diameter, yes.
  • O.- How far back does that expression big inch go? How early did you--
  • H.- I didn't hear it, I've heard it all my life, big inch pipe.
  • O.- Yes, or little inch, un-huh.
  • H.- But it wasn't generally used prior to those two lines.
  • O.- Yeh. Well, I'd like to know something about your operation in the Trans-Iranian pipeline company.
  • H.- Trans-Arabian
  • O.- Arabian, I'm sorry.
  • H.- Anglo-Iranian is in Iran only.
  • The Persian Gulf confuses people because they figure that Persian Gulf over there, you might as well say, it's just the same confusion as the Gulf of Mexico is on this side of the world.
  • O.- Yes sir.
  • H.- The Gulf of Mexico doesn't mean that Mexico owns the Gulf.
  • O.- Yes.
  • H.- And the Persian Gulf doesn't mean that Persia owns the Gulf, the Persian Gulf either, or Iran.
  • Well the Arabian-American Oil Company dates back to about 1929 or '30.
  • At that time the Texas Company had already established and was supplying a big civilian market in the Pacific.
  • The Standard Oil Company of California, about the same size as the Texas Company, had no market in the Pacific.
  • The only market they had was in Honolulu, in the Hawaiian Islands.
  • But all the balance of the Pacific, the Phillippine Islands, Australia, and Indonesia, and all of those markets, they had no part, not Cal out there.
  • They wanted to send Cal out there.
  • Well, Kingsbury, who was then president of the Standard of California, and Rieber, who was head of the Texas Company, they got together and they decided that inasmuch as the Texas Company already had a market for products and the Standard of Cal had no market,
  • and the Standard of Cal has a prospect of developing a lot of crude oil production from Indonesian properties and from Saudi, no, from Bahrein Islands in the Persian Gulf and other points, and Texas Company had no leases at all, that they could make a trade.
  • They could reach a trade agreement, so they did.
  • Without changing any money, the Texas Company acquired half of Standard's interests in leases in Indonesia and in
  • Persian Gulf.
  • And the Standard of Cal acquired half of the Texas Company's interest in market for products in those countries.
  • So they formed what they called the Cal-Arabian Oil Company, fifty-fifty, to exploit production on, in leases in, or concessions in the Persian Gulf, and in Indonesia, what's now Indonesia.
  • It wasn't Indonesia then, what is now Indonesia; New Guinea, Java, Sumatra, and some of those other islands.
  • And on a condition that when conditions justify, in other words when they had enough production, the new company, Cal-Arabian or some other company jointly owned, would drill the pipeline from the Persian Gulf to the Mediterranean.
  • That cuts off that Arabian Peninsula, seventy five hundred miles around there.
  • That's a long haul for oil.
  • It's economically unsound to try to haul oil that far, unnecessarily.
  • So in 1946, I was placed on leave of absence.
  • And Johnny Suman, who you mentioned--he was on the Standard' board then--and he says, "On one condition: that you send this guy, that little son-of-a-bitch Hull down there, up there and let him build this pipeline."
  • So the company said, "That's all right. We don't use him very much.
  • He'll be retired in a few years anyhow.
  • He's just back off the Big Inch and we can spare him."
  • So in 1946, I was shifted over there to the Trans-Arabian pipeline in charge of that.
  • Now, before Texas and Standard of California got very far, they began to look at their hole cards.
  • "What are we going to have to pour into this in money in 1946, '7, '8, and '9?
  • How much is that pipeline going to cost?
  • Two hundred and thirty or forty million.
  • And how much we going to have to spend in development?
  • We got to build a refinery at Rastanura and where we going to get all this money?
  • Well, we're going to."
  • And they finally--The Standard of
  • New Jersey, and the Socony Vacuum had each been wanting to get in on the Arabian, In the meantime they'd taken on the Arabian possessions.
  • And the Standard of New Jersey and the Socony Vacuum says,
  • "Gee, there ought to be some way for us to get in this over there.
  • All we've got's some contracts to buy oil from Anglo-Iranian,"
  • And today those contracts would be no good at all.
  • But at that time that was where they were going to get their crude.
  • "And we don't want to have to buy all our crude.
  • Isn't there someway for us to get in?
  • Let's see if we can't buy in with this outfit."
  • So they sat down with the Texas Company and the Standard of Cal, and sure enough, it was more profitable to the Texas Company and the Standard of Cal to sell 20% each to these other fellows, and let them carry 40% of the load, no 30% of the load jointly than for each to carry 50% of the load jointly in the future.
  • Because it'd take such an enormous amount of capital.
  • They've already got markets established through the Standard Vacuum Oil Company in Europe particularly.
  • And so they sold to the Standard of New Jersey and the Socony Vacuum each, between the two of them 40%,
  • They finally agreed that the Socony Vacuum goes along with 10% interest, and the Standard of New Jersey 30% interest.
  • So they changed the name to the Arabian-American Oil Company, And that is owned, and so is the Trans-Arabian pipeline, 30% by Texas, 30% by California, 30% by Esso Standard, and 10% by Socony Vacuum.
  • Works all right too.
  • O.- Well, you must have had a great number of special problems there in laying a line.
  • H.- Well, they're mostly political, and problems due to peculiarities of the laws and customs.
  • O.- I see a section of that pipe apparently here, before me.
  • H.- Yes, that's part of the thirty inch.
  • O.- The thirty inch?
  • H.- Yes. You may ask why do you have half of it thirty and half of it larger, thirty one inch diameter.
  • There's only one reason for that.
  • That is we took the thirty inch and stuck one joint into the well.
  • Ocean freight Is charged by the square feet of spacing, not by the weight, but by square feet.
  • A single joint of thirty inch pipe does not take up forty pounds to the cubic foot, so we take thirty inch pipe and shove it inside the thirty one.
  • And the effect is that we save half the ocean freight.
  • Because even a thirty one and a thirty inch just barely does take up thirty pounds, forty pounds per cubic foot.
  • And that's what we had to pay for space tonnage rate.
  • O.- Yes.
  • H.- So we saved about seven and a half million dollars in ocean freight.
  • O.- That's an interesting story.
  • Who thought of that one?
  • H.- Well, we thought of it of course.
  • But the reason it hadn't been done heretofore is because nobody had any in their ship for pipe that big.
  • O.- Yes.
  • H.- Now everybody shipped it in pipes, and over there done the same thing.
  • The Iraq Petroleum just finished a thirty, thirty two inch line from Kakuk down to Tripoli--Banneas they call it, Banneas, Syria.
  • Then do the same thing, they made half of theirs thirty and half thirty two inch.
  • O.- Well, when did you finish your contract there?
  • H.- Well, I agreed to stay with that till it was finished.
  • Then we
  • loaded the first boat full of crude oil in December, 1950.
  • There was 15 months where we shut down because we couldn't get export licenses from the U. S. Department of Commerce.
  • Don't know why, they never have explained it.
  • They just shut us down and wouldn't give us any license.
  • But I agreed to stay on as long as my health was good until that was finished and operating.
  • And so when it started operating in December, 1950, I went back to San Francisco.
  • And I stayed there just a few more months until my retirement should have occurred in 1949.
  • Yes, in June 1st, '49.
  • But I stayed on till June 1st, '51, when I left the company because I retired.
  • O.- Well, a few questions more I'd like to ask.
  • First of all, if you had it to do over again, would you go this same route?
  • Through A. & M., to pipelining and so on.
  • H.- Well, of course there would be certain things available to me in the future, that were not available in the past.
  • I believe I would take a little different course at A. & M.
  • So far as the pipelines's considered, why I enjoyed it.
  • It was interesting.
  • And I don't know if I had to do it over again that I would change a bit in my so-called work to be done, or work done, because I enjoyed it all.
  • Wouldn't be any way to improve on that, that I know of.
  • O.- Well, you're definitely a pioneer in the laying of pipeline?
  • H.- Yes. In other words, anything that's in use today, I tried it first.
  • O.- Yes. Did you make any inventions yourself along the way?
  • H.- Oh, a few. But things that were invented, I assigned immediately to the company and they asked for the patents on it.
  • O.- Yes. H.- Some of it's patented in my name.
  • I never owned any royalty,
  • don't retain any royalty.
  • O.- All went to the company?
  • H.- Yes. When you sign an application for employment, you agree that if you patent anything that's useful in the industry you agree right then and there to assign your rights to the company.
  • After all the company is going to pay your time, they're paying you.
  • If you make any mistakes, it's their cost, so if you make anything that isn't a mistake, they'll profit by it.
  • It's fair enough.
  • O.- Is that standard practice?
  • H.- Yes. It is among the larger companies.
  • O.- Yes.
  • H.- Now in the past and probably in the future, it has been a common practice for somebody to create something that has value, patentable value to just quit,
  • "What the hell's the use of staying with a fly by night oil company?
  • Might as well start a business of my own,"
  • And quit, get a patent on blowout preventor, for instance.
  • Look at Jim Ambercrobbie.
  • He was of a creative mind and he got a lot of patents.
  • He patented the blowout preventor and he quit.
  • I forgot what he was doing.
  • He was working for some small company.
  • He just quit and went into business for himself.
  • He made millions.
  • O.- Well, before we leave the recording I'd like to ask you something about that Texas Club you lived in in Beaumont.
  • H.- Well, the Texas Club was owned and operated by Mr. and Mrs, T. J. Donohoe.
  • Mr. Donohoe was at that time executive vice--he was functioning as executive vice-president of the company, and to provide a decent place to live, he and Mrs, Donohoe kindly agreed to lease or rent a large building, larger than they needed out on
  • Calder Avenue.
  • And Mrs. Donohoe agreed to operate a dining room and, for the accommodation of Mr. Cullinan, Fred Freeman, Ide McFarland, Guy Carroll, Ambrose Donohoe Jr., and a few others who really used the Texas Club as a home.
  • And Mrs. Donohoe fed and took care of us.
  • Well, in the fall of 1905 I was living there with some of the other boys and Adrian, no John Melether, came to Beaumont, was sent there by Arnold Schaet to get a little first hand information and a little experience in the oil industry.
  • John was going into the export end of the business in, with headquarters in New York.
  • And I was appointed more or less as glad-hand artist to welcome John to Port Arthur.
  • And I didn't know what else to do with him so I took him up to T. J. Donohoe's Texaco Club for dinner.
  • And then we got to deciding where is John going to board while he lives in Port Arthur, Beaumont.
  • We could have taken him to the Crosby House, I suppose, or the Oaks Hotel, but we began to see if we couldn't find room for him in the Club, and decided to put him in the room with Ambrose Donohoe, who was rooming there, for an extra bed.
  • So we went up to Ambrose's room and up to that time I had never seen any men's underwear other than the old long-handle type coming down to the ankle, worn in the summer or winter.
  • So if they wore any underclothes at all, they wore long ones, covered the leg all the way down to the ankle.
  • Well, John sat there on his bed in Ambrose Donohoe's room and began to disrobe.
  • And I noticed he had on some B.V.D.'s, the first ones I'd ever seen.
  • And I was, I was terribly mortified to have been instrumental in bringing this Italian--you know, Bill, he's part of the, what do you call it? The--
  • O.- The royalty?
  • H.- The royal family of Italy.
  • They come over here and wear short drawers.
  • I put him as a roommate with Ambrose Donohoe.
  • I didn't know what to do. I was so---.
  • I'll never forget my reaction at having seen him, the first pair, my first pair of B.V.D.'s that I ever saw or ever heard of, he was wearing 'em.
  • O.- What'd you say?
  • H.- I don't recall what remark I may have made at the time.
  • But I felt that I was responsible for having parked in there with Ambrose Donohoe, a foreigner, who, with a pair of short drawers on, I didn't know what to think.
  • O.- Well, sir, we've come to the end of this tape. Thank you very much. You've been very patient and kind with your information.
  • H.- Well, thank you, Mr. Owens. (end of tape)