INSIDE ENERGY: Leaky Barrels, German U-Boats And 2.6 Million Miles Of Pipe

Aug 1, 2014

There’s an invisible network connecting every corner of the United States. Without it, cars wouldn’t start and lights wouldn’t turn on. At 2.6 million miles, if it were stretched out, it would reach around the Earth more than a hundred times. Chances are, you’ve never noticed it. The nation’s sprawling pipeline network is buried underground, out of sight and out of mind.

But it wasn’t always the case that pipelines crisscrossed the nation, bringing energy where it was needed. When Edwin Drake drilled the world’s first commercial oil well in 1859 in rural Pennsylvania, there was no system for moving oil from the well to a refinery. Historian Susan Beates, with the Drakewell Museum, says the 25 barrels a day that gushed out of his primitive well were more oil than anyone had ever seen -- and there was nowhere to put it. “They even grabbed washtubs to help hold all the oil,” Beates said.

It didn’t take long for the drillers to start buying up barrels -- whiskey barrels, molasses barrels, fish barrels -- any barrels they could get their hands on. The barrels were better than washtubs, but they weren’t terribly efficient. Intended to hold 42 gallons of oil, they were built to hold 44, in order to allow for two gallons to leak in transit.

Barrels were used in the early days of oil to move it from one place to another. Often, the barrels were loaded onto barges and floated down Pennsylvania's major rivers to refineries in Pittsburgh, where it was turned into kerosene.
Credit American Oil and Gas History Association

Leakage aside, it was also really expensive to move oil in barrels, because the teamsters who manned the horse-drawn wagons that moved them from the well to the railroad charged exorbitant prices. There were huge traffic jams caused by “hundreds and hundreds of wagons following the same road, to get up to the same railroad terminal,” Beates said. “The expense was just phenomenal.”

All that changed with Samuel Van Syckel, an early Pennsylvania oil trader. He wanted to break the teamster’s monopoly, and succeeded. The pipeline Van Syckel built was 5 miles long and 2 inches wide and could transport up to 2000 barrels a day from his wells to a nearby rail depot. “Think how many wagons that would take, to transport that many barrels!” Beates said.

It was a technological revolution. The teamsters tried to stop it by sabotaging the line, but in the end, efficiency won out. Although oil continued, and continues, to be measured in barrels, it took just a few decades for the actual barrels to be rendered obsolete.

By 1920, the American Petroleum Institute estimates there were almost 40,000 miles of pipeline in the country. In the following decade, that number tripled, as welding technology made it easier to build long pipelines. Industry videos promoted the “great network” of “lines of pipe, alive with racing oil!”

As is the case today, people didn’t pay a whole lot of attention to that new network, but it was revolutionizing the energy industry. By the end of the 1930s, natural gas had become the primary heating fuel in cities like Houston and Denver, but most East coast cities still relied on coal or a derivative of coal called “manufactured gas” because no one had built the pipelines to move natural gas long distances.

World War II changed that. Not long into the war, German U-boats started bombing American oil tankers by the dozen. “People on the Atlantic seaboard are actually able to see the fires from these tankers that have been hit,” said California State University history professor Chris Castaneda.

Allied tankers were regularly torpedoed in Atlantic Ocean by German submarines during World War II in an attempt to disrupt the fuel supply chain.
Credit U.S. Navy

The oil in those tankers was critical to the war machine, so the government built the biggest, longest crude oil pipeline ever, from Texas to New Jersey -- the Big Inch. It worked like a charm. But then, the war ended and the government had to get rid of its wartime assets. A Texas company bought the Big Inch for $143 million ($1.4 billion in today’s dollars) and converted it to a natural gas pipeline. It was like opening the floodgates. “Other groups of entrepreneurs realize there’s this huge market for natural gas in the Northeast,” Castaneda said.

Companies built more pipeline in the next two decades than anytime before or since.

For the most part though, this pipeline build-out went unnoticed and undocumented. Joseph Pratt is a professor of history and business at the University of Houston. He and Castaneda -- who was once his student -- are among the few people who have studied that era of the nation’s pipeline history.

“The sexy part of oil and gas has always been exploration and production and the pipelines follow,” Pratt said. But he thinks it’s a good time to be looking back at the history of pipelines. “You look at what we've built, this envy of the world pipeline grid and you realize [it’s] not the envy of the world with fracking,” Pratt said.

Credit R.M. Chapin, Jr. / TIME

Today, the United States has 2.6 million miles of pipeline criss-crossing the country -- more than anywhere else in the world, but that pipeline grid doesn't work for the shale boom. While the Big Inch pipeline is still operating, carrying natural gas from Texas to the Northeast, there are few pipelines that can carry oil and gas away from the new boom: places like North Dakota and Pennsylvania. So, a build-out is underway. More than a hundred major pipeline projects are currently planned for the next five years in North America. The scale could easily rival that of the 1950s. And that has some big implications.

“There are pretty fundamental choices being made right now about the fuel of the future,” Pratt said. “These infrastructure questions are the first volley in the contest over which fuels it will be.”

As in, renewables or fossil fuels. Right now, industry projections anticipate the need for half a trillion -- yes, trillion -- dollars of investment in systems to move oil and gas around the country over the next twenty years. Just like it did half a century ago, that kind of build-out would likely cement the nation’s commitment to a fossil fuel future.