# The Mexican Problem (1917)/Pioneer Work Finished

CHAPTER X
PIONEER WORK FINISHED
The expansion of the Mexican Petroleum Company in its beginnings was by land acquisition. Such expansion may now be considered as ended. Some people figure that more than three-quarters of the oil values in this Mexican field are under the Mexican Petroleum Company's six hundred and twenty thousand acres and that they represent a potentiality of at least five billion barrels in production, a sum ten times the world's annual consumption. But no man can set limits or boundaries upon this oil territory.
Doheny truthfully says, "Geology is a joke in Mexico; values are where you find them. . . ." And Doheny has led in finding values both in California and Mexico.
His first purchases in Mexico were in August, 1900, although prospecting was begun by Doheny and Canfield in the May and June preceding. They were American pioneer inventors and soon found a cheaper method of ​prospecting than in crawling and cutting their way through the jungle. They announced they would pay five pesos to anybody pointing out the location of "tar spots." They were inundated with "tar spots" and readily took leases on thousands of acres. So pressing were the Mexicans to realize money that royalties were sometimes paid several years in advance, and when they would no longer pay extended advance royalties, titles were forced upon them.
EXPANDING ENGINEERING
The same forces that engineered the construction are still engineering the company's expansion in and out of Mexico. How successful this engineering has been to date may be illustrated by the fact that Manager Wylie estimated for the first eight-inch pipe line a capacity of twelve thousand five hundred barrels a day, with pumping stations twenty miles apart. By putting the pumping stations fourteen miles apart, the pipe line capacity was advanced to twenty thousand barrels a day; then the pumping stations were improved and the oil was a little thinner than expected and the eight-inch pipe line was soon carrying thirty-five thousand barrels a day. But improvements and expansion continued. ​Now the two pipe lines carrying oil are delivering seventy-five thousand barrels a day at the Tampico terminal, and sixty thousand barrels a day are being exported, along with more than one hundred thousand barrels of gasolene per month. Orders have just been given to burn oil at the pumping stations and the topping plant, releasing the third pipe line, which is now used as a gas line, so that it can be used to transport oil. This may bring the company's capacity for delivery at Tampico to above one hundred thousand barrels per day.
The engineering enterprise in the Mexican Petroleum Company resembles the history of our western railroad pioneers, who laid their rails on the prairies in advance of the settlers. The Mexican Petroleum people actually had the audacity to build railroads and pipe lines in advance of their wells and upon the basis only of the oil seepages.
A million and a half dollars went into the first pipe line and two million and a half dollars into the railroad and pipe lines to Cerro Azul, all in advance of any oil well.
​where it might have done incalculable damage, but the company's engineering forces put up fifty-five thousand barrel tanks at the rate of one every four and a half days. Last year Cerro Azul shot a million and a half barrels into the air before it could be controlled. But here again the company's forces saved, by earth dams, more than half of this, and then for safety burned the overflow. There is no evidence as to the number of oil gushers that may burst forth in the future, but knowledge of how to handle them has increased.
And speaking of the standard fifty-five-thousand-barrel steel oil tanks, the reader may be interested to know that they are thirty feet high and one hundred and fifteen feet in diameter, are usually surrounded by an earth dam to save the oil in case of accident, and have usually a bottom valve through which the oil may be drawn off if a bolt of lightning fires the tank.
The Mexican Petroleum Company on its thousand acres of ground at "Tankville" and at its Tampico terminal has one hundred and three of these tanks, but the eye will meet them at almost any railroad shipping point in the United States.
The first complete monthly shipments were ​in January, 1913, when two hundred and forty-seven thousand barrels left the wharf at Tampico. By October, 1916, the shipments had reached eight hundred and ten thousand barrels. Now they are above a million and a half barrels a month.
PIPE LINES, RAILROADS, MOTOR WAYS, AND WATERWAYS
This American concern has nearly half the pipe-line mileage in the country. It has three eight-inch pipe lines from Tampico to the Casiano well, sixty-five miles distant. Thence two eight-inch lines to Cerro Azul, twenty-two miles, and an eighteen-mile line to Tres Hermanos, a total of two hundred and sixty-four miles. The oil is kept moving by seven pumping stations operated by gas from a line to the Casiano well, but the stations are equipped with oil-burning apparatus, now to be put in commission as already noted above. The oil gushes at such a temperature that it flows without reheating.
There are one hundred and nineteen miles of four-and six-inch water mains, and the company is opening other water supplies.
Over these lines, well buried in the earth, runs ​the company's fenced-in private motor road, for eighty miles, with surveyed right of way to the Tuxpan River, one hundred and twenty-five miles in all.
There is no speed limit on a private line and the company's officials claim their trucks and motors do business over this road cheaper than the business could be handled on a railway; but be it remembered this company makes its own gasolene of sixty-three specific gravity, at a cost of less than a cent a gallon.
The company also parallels this highway most of the distance, or to San Geronimo, by its own motor boat line and water route. From San Geronimo south it operates a thirty-five mile railroad to Cerro Azul, and has nineteen miles further surveyed for construction. It has also five miles of standard gauge road at Ebano; but not a passenger coach on any line. It is all business. The pleasurable way of travel in this country is by the company's motor boats, for it has a very complete line of marine equipment, including the yacht Casiana, usually at hand to take out all Americans when so ordered by the United States or Mexican de facto governments.
The company has been as far-sighted and ​ahead of its rivals in its Tampico terminals as in its oil land acquisitions. In tanks, storage, river-frontage shops, machinery, and loading equipment it holds the ground and leadership. I figure it has more oil in pipe lines and storage than it sold last year, and perhaps as much as its 1916 production twelve million four hundred thousand barrels.
The great pioneer work of acquisition, production, construction, finance, and organization has been accomplished in seventeen years, and the patient owner should reap handsome rewards in the next seventeen years.
A CAUTION
But there is one caution I may give him, and that is not to be alarmed concerning reports from Mexico and Tampico, whence there is very little reliable news in the despatches of the day. Indeed, the two worst informed countries concerning each other's affairs are those countries lying either side of the Rio Grande.
​news. All the foreigners interested in Mexico and its development are afraid to speak concerning their properties or their operations for fear of misconstruction either at Washington or Mexico City, and harmless, inane, or weakly stupid news reports are allowed to pass censorship. We have all sorts of "frightful" German reports; now it is Villa moving on Tampico and, as I write, comes the report that shipping is tied up at Tampico by a strike of oil handlers. One would think, to read the press reports, that there was a similarity between the work of longshoremen loading ships in New York harbor and thousands of Mexicans loading oil ships at Tampico.
I stood at the loading-station on the east side of the Panuco River at the Mexican Petroleum Company's terminal opposite Tampico and witnessed one of the big oil ships slowly draw up to the wharf for its load of oil. There must have been a very large party on the pier, for it consisted of myself, two Mexicans, and Dr. W. W. Hills and his wife. The doctor was explaining to me his remedies for resuscitating the men at Cerro Azul when in the fumes of that gusher the American engineers were working day and night to shut in the torrent of oil, —how as fast ​as a man began to stagger he was grabbed by the doctor's assistants and quickly dragged away from the well so that the doctor might promptly restore him by gas antidotes, and before he had finished his explanation the two Mexicans had moved a giant hose to the ship's side and the ship was being filled by gravity from a tank on the hill, some fifteen hundred feet away. The next day the ship departed with her sixty five-thousand-barrel load.
But what is the poor newsman to do with a press report when it arrives. It may or may not be true. In this case there was no strike of oil ship loaders, but for a few days there was trouble and a labor strike at the Pierce Oil refinery and at the Mexican Eagle refinery, but the true news could not be given. Now, if you were a newsman on the firing line, would you send forth a report, if permitted, indicating delays in some oil shipments from Tampico, or would you wait till order had been restored, the censorship lifted and then telegraph a history of no value?
NORMAL DISORDER
The point, however, I wish to make for investment interests should be clear. Mexico as ​a country is not in a state of normal peace, but of normal disorder—disorder that has prevailed more or less for a hundred years, except during the reign of Porfirio Diaz. Correct news reports are not readily available, and the business investor should know his risks, should understand that he cannot be guided by newspaper reports, and should fully understand that Mexican values are selling at large discounts in the world markets, but that in the end they will be properly demonstrated and properly protected by American or European interests, and will some day be properly quoted.