41.

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89- tri Z4‹.

THEFTS FROM INTERSTATE PIPELIN8`T

GOVERN M EN" 

Storage

HEARING

BEFORE THE

COMMITTEE ON COMMERCE

UNITED STATES SENATE

EIGHTY-NINTH CONGRESS

SECOND SESSION

ON

S. 3433

A BILL TO MAKE IT A CRIMINAL OFFENSE TO STEAL,

EMBEZZLE, OR OTHERWISE UNLAWFULLY TAKE

PROPERTY FROM A PIPELINE

KSU LIBRARIES 

AUGUST 25, 1966

Serial No. 89-77

Printed for the use of the Committee on Commerce

68-962 WASHINGTON : 1966 0342

U.S. GOVERNMENT PRINTING OFFICE

:9961.
•

COMMITTEE ON COMMERCE

WARREN G. MAGNUSON, Washington, Chairman

JOHN 0. PASTORE, Rhode Island

A. S. MIKE MONRONEY, Oklahoma

FRANK J. LAUSCHE, Ohio

E. L. BARTLETT, Alaska

VANCE HARTKE. Indiana

PHILIP A. HART, Michigan

HOWARD W. CANNON, Nevada

DANIEL B. BREVVSTER, Maryland

IVIAURINE B. NEUBERGER, Oregon

ROSS BASS, Tennessee

RUSSELL B. LONG, Louisiana

GERALD GRINSTEIN, Chief Counsel

EDWARD JARRETT, Chief Clerk

JEREMIAH J. KENNEY, Jr., Assistant Chief Counsel

RALPH HORTON, Assistant Chief Clerk

DONALD W. BRODIE, Staff Counsel

II

NORRIS COTTON, New Hampshire

THR USTON B. MORTON, Kentucky

HUGH SCOTT, Pennsylvania

WINSTON L. PRO UTY, Vermont

JAMES B. PEARSON, Kansas

PETER H. DOMINICK, Colorado
CONTENTS

Page Text of S. 3433 

Agency comments: 1

Federal 

Comptroller 

Power 

General of the United States, dated June 13, 1966 3

Interstate 

Commission, dated August 24, 1966 3

Department 

Commerce Commission, dated August 23, 1966 2

of Justice, dated August 22, 1966 Statement of— 1

Durand, J. D., general counsel, Association of Oil Pipelines, Washing- ton, D.C.; accompanied by Mr. Harris G. Squire, vice president, traffic, Service Pipe Line Co., Tulsa, Okla Heady, Kenneth, 4

assistant general counsel, Phillips Petroleum Co., Bartlesville, Okla 

McCollough, 20 vice president, Texas Eastern Transmission Corp., Houston, Tex 

Thomas, 18

Vickrey, 

Robert E., president, Mid-America Pipeline Co., Tulsa, Okla_ 16 vice president and general counsel, Colonial Pipeline Co., Atlanta, Ga 14

INDEX OF ORGANIZATIONS AND GOVERNMENT AGENCIES

Association of Oil Pipelines 

Colonial Pipeline 4

Co 

Comptroller 14 General of the United States Federal Power 3

Commission 

Interstate Commerce 3

Commission 

Department 2

of Justice 

Mid-America 1

Pipeline Co 

Phillips 16 Petroleum Co 

Service 20 Pipeline Co 

Texas Eastern 4

Transmission Corp 18

THEFTS FROM INTERSTATE PIPELINES

THURSDAY, AUGUST 25, 1966

U.S. SENATE,

COMMITTEE ON COMMERCE,

Washington, D.C.

The committee met at 10:15 a.m., in room 5110, New Senate Office

Building, Hon. A. S. Mike Monroney presiding.

Senator MONRONEY. The Committee on Commerce begins hearings

this morning on S. 3433, a bill to make it a Federal offense to steal,

embezzle, or otherwise unlawfully take property from a pipeline.

The bill amends section 659 of title 18, United States Code, which

makes it a Federal offense to steal goods or chattels moving in interstate commerce from a railroad car, wagon, motortruck, or other

vehicle, or from any station, station house, platform or depot, or

from any steamboat, vessel, or wharf, or from any aircraft, air terminal,

airport, aircraft terminal, or air navigation facility.

This bill would give interstate pipelines the same protection enjoyed by the railroads, motor carriers, water carriers, and air carriers.

Without objection there will be printed in the record at this point

a copy of S. 3433 together with the official reports on this legislation

from the Department of Justice, the Interstate Commerce Commission, the Federal Power Commission, and the Comptroller General.

All reports favor enactment.

(The bill and the official reports follow:)

[S. 3433, 89th Cong., 2d sess.]

A BILL To make it a criminal offense to steal, embezzle, or otherwise unlawfully take property from a

pipeline

Be it enacted by the Senate and House of Representatives of the United States of

America in Congress assembled, That the first paragraph of section 659 of title 18,

United States Code, relating to theft, embezzlement, or other unlawful taking

from interstate transportation facilities, is amended (1) by inserting before the

word "railroad" the word "pipeline,", (2) by inserting before the word "station"

where it first appears the word "tank,", and (3) by striking out the words "or

express" and substituting a comma and the words "express, or property".

HOD- WARREN G. MAGNUSON,

Chairman, Committee on Commerce,

U.S. Senate, Washington, D.C.

DEAR SENATOR: This is in response to your request for the views of the Department of Justice on S. 3433, a bill to make it a criminal offense to steal, embezzle, or otherwise unlawfully take property from a pipeline.

Section 659 of title 18, United States Code, makes it a Federal offense to steal

or unlawfully take money or property moving in interstate commerce.

The first paragraph of section 659 reads as follows:

OFFICE OF THE DEPUTY ATTORNEY GENERAL,

Washington, D.C., August 22, 1966.

Staff counsel assigned to this hearing: Donald W. Brodie.

1
THEFTS FROM INTERSTATE PIPELINES

"Whoever embezzles, steals, or unlawfully takes, carries away, or conceals, or

by fraud or deception obtains from any railroad car, wagon, motortruck, or other

vehicle, or from any station, station house, platform or depot or from any steamboat, vessel, or wharf, or from any aircraft, air terminal, airport, aircraft terminal

or air navigation facility with intent to convert to his own use any goods or

chattels moving as or which are a part of or which constitute an interstate or

foreign shipment of freight or express * "."

S. 3433 would amend the first paragraph of section 659 by adding "pipeline"

and "tank" to the other facilities listed in that paragraph. It would also delete

the words "or express" at the end of the paragraph and insert in lieu thereof the

words "express, or property".

The words "pipeline" and "tank" may not include all of the facilities intended

to be covered by those words. It is suggested that consideration be given to

substituting for those terms the words 'pipeline system" and "storage tank".

It is also suggested that in the interest of clarity the words "express, or property"

be changed to "express, or other property".

The eighth paragraph of section 659 provides that in order to establish the interstate or foreign commerce character of any shipment in any prosecution under

the section the waybill or shipping document shall be prima facie evidence of the

place from which and to which such shipment was made. We are advised that

while shipping documents are customarily used in the pipeline industry, crude oil

that is delivered to the pipeline for shipment is often commingled with other

similar crude during transmission. Any barrel of such commingled oil could not

be identified by a specific shipping document, and therefore the interstate or

foreign character of the shipment of oil which was unlawfully taken could not be

established prima facie by the present provision of paragraph 8 of section 659.

We therefore suggest that the following sentence should be added at the end of

paragraph 8: "The removal of property from a pipeline system which extends interstate shall be prima facie evidence of the interstate character of the shipment of

the property."

It is further suggested that the heading of section 659 be amended to reflect

the proposed broader substance of the section.

It is noted that the bill would make only a consummated theft from a pipeline

system a crime. It may be advisable to extend the crime to cases of burglary.

This could be accomplished by amending section 2117 of title 18 by (1) striking

the comma after the word "vehicle" where it first appears and adding "or of any

pipeline system," • (2) striking the comma after the word "express" and adding

or other property,"; and (3) adding after the word "vehicle' where it second

appears "or pipeline system". If section 2117 is amended the heading of that

section should also be amended to reflect the expanded scope of the section.

Although the Department of Justice has no information as to the need for this

legislation, if it is amended as suggested above we would have no objection to

its enactment.

The Bureau of the Budget has advised that there is no objection to the submission of this report from the standpoint of the Administration's program.

Sincerely,

Hon. WARREN G. MAGNUSON,

Chairman, Committee on Commerce,

U.S. Senate, Washington, D.C.

.DEAR CHAIRMAN MAGNUSON: This is in response to your request for the

Commission's comments on S. 3433, introduced by Senator Monroney, a bill to

make it a criminal offense to steal, embezzle, or otherwise unlawfully take property

from a pipeline. I am authorized to submit the following comments on behalf of

the Committee on Legislation.

Title 18, section 659, of the United States Code, provides that:

"Whoever, embezzles, steals, or unlawfully takes, carries away, or conceals, or

by fraud or deception obtains from any railrdad car, wagon, motortruck, or other

vehicle, or from any station, station house platform or depot or from any steamboat, vessel, or wharf, or from any aircraft, air terminal, airport, aircraft terminal

or air navigation facility with intent to convert to his own use any goods or

RAMSEY CLARK,

Deputy Attorney General.

INTERSTATE COMMERCE COMMISSION,

OFFICE OF THE CHAIRMAN,

Washington, D.C., August 23, 1966.
THEFTS FROM INTERSTATE PIPELINES 3

Hon. WARREN G. MAGNUSON,

Chairman, Committee on Commerce,

U.S. Senate.

chattels moving as or which are a part of or which constitute an interstate or

foreign shipment of freight or express; or * * * shall in each case be fined not

more than $5,000 or imprisoned not more than ten years, or both; but if the

amount of value of such money, baggage, goods or chattels does not exceed

$100, he shall be fined not more than $1,000 or imprisoned not more than one

year, or both."

S. 3433 would extend this provision to include thefts from pipelines or pipeline

facilities. This would give pipelines the same protection now afforded other

interstate carriers.

Making it .a Federal offense to steal from pipelines or pipeline facilities should

be a substantial deterrent to this type of theft. We believe that a decrease in

the number of thefts from pipelines should enable pipleine companies to provide

better transportation services.

In conclusion, since this proposal would put pipelines on an equal footing with

other interstate carriers, we strongly support the enactment of S. 3433.

Sincerely,

COMMITTEE ON LEGISLATION,

JOHN W. BUSH, Chairman.

LAURENCE K. WALRATH.

WILLARD DEASON.

S. 3433, 89th Congress (Monroney).

Hon. WARREN G. MAGNUSON,

Chairman, Committee on Commerce,

U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: Pursuant to your request of June 2, 1966, the Commission wishes to advise that it does not believe that enactment of the subject bill

would have any effect upon its responsibilities. However, it believes that natural

gas pipelines should be afforded the same protections as other instrumentalities of

interstate commerce, and consequently believes that enactment of S. 3433 would

be in the public interest.

Sincerely,

FEDERAL POWER COMMISSION,

Washington, D.C., August 24, 1966.

LEE C. WHITE, Chairman.

COMPTROLLER GENERAL OF THE UNITED STATES,

Washington, D.C., June 13, 1966.

DEAR MR. CHAIRMAN: Reference is made to your letter of June 2, 1966,

requesting our comments on S. 3433 introduced by Senator Monroney. The

bill would amend 18 U.S.C. 659 to make it a criminal offense to steal, embezzle,

or otherwise unlawfully take property from a pipeline.

The enactment of S. 3433 would not directly affect the functions and operations

of our Office. However, the proposed legislation appears to be in the public

interest and accordingly, we have no objection to its favorable consideration

by your committee.

Sincerely yours,

FRANK H. WEITZEL,

Assistant Comptroller General

of the United States.

Senator MONRONEY. This morning the committee will hear from

the representatives of both oil products and natural gas pipeline

companies. Both types of pipelines are within the scope of the bill.

These witnesses will detail the growing need for legislation of this

nature.

The first witness will be Mr. J. D. Durand, general counsel, Association of Oil Pipelines.
THEFTS FROM INTERSTATE PIPELINES

Mr. Durand, we appreciate your coming here this morning. We

will be happy to have you come forward and proceed in your own way.

Mr. DURAND. Thank you, Mr. Chairman.

I wonder if it would be acceptable to you if the other four witnesses

who are here with me this morning would join me at the table.

Senator MONRONEY. That would be perfectly acceptable.

These are the five witnesses that are listed to be heard?

Mr. DURAND. Yes, sir. And I would also like, if it is agreeable

with you, to have Mr. Harris Squire, Service Pipe Line, who is chairman of the association's Federal affairs committee, with us at the

table.

Senator MONRONEY. We will be glad to have Mr. Squire.

STATEMENT OF J. D. DURAND, GENERAL COUNSEL, ASSOCIATION

OF OIL PIPE LINES, WASHINGTON, D.C.; ACCOMPANIED BY

JACK VICKREY, VICE PRESIDENT AND GENERAL COUNSEL,

COLONIAL PIPE LINE CO., ATLANTA, GA.; ROBERT E. THOMAS,

PRESIDENT, MID-AMERICA PIPE LINE CO., TULSA, OKLA.;

W. H. McCOLLOUGH, VICE PRESIDENT, TEXAS EASTERN TRANSMISSION CORP., HOUSTON, TEX.; KENNETH HEADY, ASSISTANT

GENERAL COUNSEL, PHILLIPS PETROLEUM CO., BARTLESVILLE, OKLA.; AND HARRIS G. SQUIRE, VICE PRESIDENT,

TRAFFIC SERVICE PIPE LINE CO., TULSA, OKLA.

Mr. DURAND. Mr. Chairman, we all have short prepared statements

on the bill and perhaps it would be most economical of the committee's time if we simply read our statements and then answered

any questions that you might have.

Senator MONRONEY. Yes.

Mr. DURAND. My name is J. D. Durand. I am general counsel of

the Association of Oil Pipe Lines, a voluntary, unincorporated association of substantially all of the interstate, common carrier oil pipelines in the United States. Attached to my statement is a list of the

73 member companies which constitute the association.

The association appears before you today in support of S. 3433,

which would amend section 659 of title 18, the Criminal Code of the

United States, to make it a Federal offense to steal or unlawfully take

property from a pipeline. In its present form, section 659 covers

thefts from railroads, motor carriers, air carriers, and water carriers.

S. 3433 would extend the protection of this section to interstate

pipelines.

There are two basic reasons why interstate pipelines should be

covered by section 659. First, like the railroads, motor carriers, air

carriers, and water carriers, the pipelines are a vital segment of our

interstate transportation system.

The interstate oil pipeline network today consists of approximately

210,000 miles of crude and petroleum products lines, serving every.

State in the Union except Hawaii. As common carriers the oil pipelines have been subject to economic regulation by the ICC since 1906.

They are not in the business of buying and selling petroleum or

petroleum products but merely transport those commodities as common carriers, in competition with each other and with other modes

of transportation.
THEFTS FROM INTERSTATE PIPELINES 5

The oil pipelines are subject to part I of the Interstate Commerce

Act. In accordance with these requirements, tariffs must be filed

with the Commission before transportation begins, and the rates and

charges provided in the tariffs must be just and reasonable. Strict

observance by the carrier with tariff provisions is required. The

carrier must provide transportation upon reasonable request therefore

by shippers, and may not grant unreasonable preference to any shipper

or unduly discriminate among shippers. Furthermore, the carriers

are required to establish reasonable through rates with other pipeline

carriers, and are forbidden to pool traffic, service, or earnings with

another carrier except with the specific approval of the Interstate

Commerce Commission.

Finally, the pipeline carriers are required to keep their accounts and

records in conformity with the uniform system prescribed by the

Commission, and they are required to file such periodic reports as the

Commission requires.

The oil pipelines are also subject to safety regulation by the ICC.

This is the result of a bill which was introduced by Senator Monroney

last year, which was favorably reported by the Senate Commerce

Committee in July 1965, passed by the Congress shortly thereafter,

and approved by the President on July 27, 1965. Pursuant to the

mandate of that legislation the ICC is currently preparing safety

regulations for the oil pipelines.

While the oil pipelines are specialists in transportation, the volume

of crude oil and petroleum products which they transport is so great

that they account for over 17 percent of the total intercity movement

of all goods, by all kinds of transportation, whether public or private.

They are, indeed, a vital part of our interstate transport system and

qualify for the same protection which section 659 of the United States

Criminal Code extends to the other forms of transportation.

The second reason why the pipelines should receive the protection

of section 659 is that their present and future exposure to theft

supports this action. There have been a substantial number of

thefts of petroleum and petroleum products from the pipeline system

in the past. These have occurred generally from taps on the pipeline,

or from pumping stations, where the pipeline comes out of the ground

and thus is more accessible to a thief.

However, the industry is deeply concerned with its future exposure

to theft, particularly in view of the increasing degree to which pipeline

operations are becoming automated.

Pipeline pump stations are generally situated from 50 to 100 miles

apart along the pipeline system, and many are in very isolated locations. Until the advent of automation it was necessary for a pipeline

company to man these stations around the clock. Now, as automation progresses, more and more pump stations are controlled by a

master station many miles away.

A study made by the American Petroleum Institute, in 1964, revealed that there were approximately 1,600 pump stations on the

pipeline system. At that time about 500 were remotely controlled

and completely unattended, except for occasional visits by maintenance personnel. Approximately 500 were partially attended, meaning that a maintenance man, generally living in the vicinity of the

station, would be present at the station for a part of the day. In the 2

68-962-6&----2
6 THEFTS FROM INTERSTATE PIPELINES

years which have elapsed from the date of the API study, a substantial

number of attended or partially attended stations have been converted

to remotely controlled, completely unattended stations.

Since these unmanned, remotely controlled stations are generally

located in isolated areas, the temptation to persons of criminal intent

is obvious. The exposure of these stations to theft is increased by the

fact that in these isolated areas the law enforcement agencies are

thinly spread, and generally lack the personnel and means to patrol

the stations or to investigate in depth thefts which might occur. I

should hasten to add that this is not intended as a criticism of law

enforcement in rural areas. I am merely pointing out the fact that the

unattended pump stations are generally found far outside the limits

of cities or other populous areas where there is police protection in

depth.

It is also true that there are a number of jurisdictions where the

applicable State or local laws were not formulated to deal with thefts

from pipelines and consequently do not provide penalties which are

an effective deterrent to pipeline thefts.

For the reasons stated., the association urges that section 659 be

amended to extend its protection to the interstate pipeline system.

Such an amendment would give the Federal Bureau of Investigation

jurisdiction to investigate pipeline thefts and apprehend the guilty

parties. The industry does not believe that this amendment would

produce a spate of pipeline cases for the FBI. The reputatiOn of the

FBI is so excellent that the grant of authority to that agency of jurisdiction over pipeline thefts would certainly be a powerful influence in

preventing them.

The Association of Oil Pipe Lines, therefore, strongly supports

S. 3433, and urges its approval by the committee.

(The membership list follows:)

MEMBERSHIP LIST OF THE ASSOCIATION OF OIL PIPE LINES,

AUGUST 1, 1966

The American Oil Company, P.O. Box 6110—A, Chicago, Illinois 60680.

Ashland Pipe Line Co., % Ashland Oil and Refining Company, 1409 Winchester

Avenue, Ashland, Kentucky 41101.

Atlantic Pipe Line Company, 260 South Broad Street, Philadelphia, Pa. 19101.

Badger Pipe Line Company, Pioneer Building, Bartlesville, Oklahoma 74003.

Buckeye Pipe Line Company, 30 Rockefeller Plaza, New York, New York 10020.

Butte Pipe Line Company, % Shell Pipe Line Corp., Shell Building, Box 2648,

Houston, Texas 77001. ,

Cenex Pipeline Company, Box "G", St. Paul 1, Minnesota 55101.E

Chanslor-Western Oil and Development Company, 1426 Railway Exchange,

80 E. Jackson Boulevard, Chicago, Illinois 60604.

Cherokee Pipe Line Company, % Continental Pipe Line Co., Drawer 1267,

Ponca City, Oklahoma 74602.

Cities Service Pipe Line Co., Pioneer Building, Bartlesville, Oklahoma 74003.

Colonial Pipeline Company, 3330 Peachtree Road, N.E., Atlanta 5, Georgia 30326. Continental Pipe Line Co., Drawer 1267, Ponca City, Oklahoma 74602.

C R A, Inc. Box 7305, Kansas City, Missouri 64116.

The Crown-Rancho Pipe Line Corp., Post Office Box 1759, Houston, Texas 77001. Dixie Pipe Line Company, 3376 Peachtree Road, NE., P.O. Box 4673, Atlanta, Georgia 30326.

The Eureka Pipe Line Company, P.O. Drawer 808, Parkersburg, West Va. 26101. Everglades Pipe Line Company, % Buckeye Pipe Line Company, 30 Rockefeller

Plaza, New York, New York 10020.

Four Corners Pipe Line Company, % Shell Pipe Line Corp., Shell Building,

Box 2648, Houston, Texas 77001.
THEFTS FROM INTERSTATE PIPELINES 7

Gulf Refining Company, P.O. Drawer 2100, Houston, Texas 77001.

Humble Pipe Line Company, P.O. Drawer 2220, Houston, Texas 77001.

Jayhawk Pipeline Corporation, P.O. Box 1030, Wichita, Kansas 67201.

Kaneb Pipe Line Company, Box 22146, 3431 West Alabama, Houston, Texas

77027.

Kaw Pipe Line Company, % The Texas Pipe Line Co., P.O. Box 52332, Houston,

Texas, 77052.

Lakehead Pipe Line Co., Inc., National Trust Building, Suite 901, 7 King Street

East, Toronto 1, Canada.

Laurel Pipe Line Company, P.O. Box 426, Camp Hill, Pennsylvania 17011.

Magnolia Pipe Line Company, P.O. Box 900, Dallas, Texas 75221.

Marathon Oil Company, 539 South Main

'

Findlay, Ohio 45840.

Michigan-Ohio Pipeline Corp., 600 West Pickard Street, P.O. Box 310, Mt.

Pleasant, Mich. 48858.

Marathon Pipe Line Co., 539 South Main Street, Findlay, Ohio 45840.

Mid-America Pipe Line Co., 1437 South Boulder Avenue, Tulsa, Oklahoma 74119.

Mid-Continent Pipe Line Co.

'

Sunray Building, 9th and Detroit Streets, P.O.

Box 2039, Tulsa, Oklahoma 74101.

Mid-Valley Pipeline Company, Box 2388, Longview, Texas 75603.

Minnesota Pipe Line Company, First National Bank Building, St. Paul, Minnesota 55101.

National Cooperative Refinery Assn., Box 770, McPherson, Kansas 67460.

National Transit Company, 410 Gateway Center, Pittsburgh, Pa. 15222.

Okan Pipe Line Company, % Warren Petroleum Corp., Box 1589, Tulsa,

Oklahoma 74101.

Oklahoma Mississippi River Products Line, Inc., P.O. Box 2139, Tulsa, Oklahoma 74101.

Phillips Petroleum Co., Adams Building, Bartlesville, Oklahoma 74004.

Phillips Pipe Line Company, Bartlesville, Oklahoma 74004.

Northern Natural Gas Products Co., 2223 Dodge Street, Omaha, Nebraska 68102.

Plantation Pipe Line Company

'

P.O. Box 18616, Atlanta, Georgia 30326.

Platte Pipe Line Company, 106 W. 14th Street, 12th Floor, Kansas City, Missouri

64105.

Portal Pipe Line Company 175 East Fourth Street, St. Paul, Minnesota 55101.

Portland Pipe Line Corp., 335 Forest Avenue, Portland, Maine 04101.

Pure Transportation Company, 200 East Golf Road, Palatine, Illinois 60067

Rock Island Oil and Refining Company, Inc., 321 West Douglas Avenue, Wichita,

Kansas 67202.

Chevron Pipe Line Company, P.O. Box 117, Salt Lake City, Utah 84110.

Service Pipe Line Company, P.O. Box 1979, Tulsa, Oklahoma 74101.

The Shamrock Pipe Line Corp., % The Shamrock Oil and Gas Corp., Box 631,

Amarillo, Texas 79105.

Shell Pipe Line Corp., Shell Building, Box 2648, Houston, Texas 77001.

Sinclair Pipe Line Company, Sinclair Building, Independence, Kansas 67301.

Skelly Pipe Line Company, Skelly Building, ''Box 1650, Tulsa, Oklahoma 74101.

Sohio Pipe Line Company, 700 Terminal Tower Building, Cleveland, Ohio 44115.

Southern Pacific Pipe Lines, Inc., Pacific Electric Building, 610 South Main

Street, Los Angeles, California 90114.

Standard Oil Co. of California

'

225 Bush Street, San Francisco, California 94120.

Standard Oil Company (N.J.) Room 1836, 30 Rockefeller Plaza, New York,

New York 10020.

Standard Oil Company (Ohio), Midland Building, Cleveland, Ohio 44115.

Southwestern Transmission Corp., 317 West Broadway, Cushing, Oklahoma

74023.

Sun Pipe Line Company, 1608 Walnut Street, Philadelphia, Pa 19103.

Texaco-Cities Service Pipe Line Co., % The Texas Pipe Line Company, P.O.

Box 52332, Houston, Texas 77052.

Texas Eastern Transmission Corp., Texas Eastern Building, P.O. Box 2521

Houston, Texas 77001.

Texas-New Mexico Pipe Line Co., % The Texas Pipe Line Co., P.O. Box 52332,

Houston, Texas 77052.

The Texas Pipe Line Company, P.O. Box 52332, Houston, Texas 77052.

The Tide-Water Pipe Company, Ltd., 660 Madison Avenue, New York, New

York, 10021.

Trans Mountain Oil Pipe Line Company, 400 East Broadway, Vancouver 10,

B.C., Canada.
8 THEFTS FROM INTERSTATE PIPELINES

•The Vickers Refining Co., Inc., P.O. Box 2240, Wichita, Kansas 67201.

Wabash Pipe Line Company, 539 South Main Street, Findlay, Ohio 45840.

West Shore Pipe Line Company, 910 South Michigan Avenue, Chicago, Illinois

60605.

West Texas Gulf Pipe Line Co., P.O. Drawer 2100, Houston, Texas 77001.

Williams Brothers Pipe Line Co., P.O. Drawer 2239, Kansas City, Missouri 64142.

Wolverine Pipe Line Company, 35th Floor, R.C.A. Building, 30 Rockefeller Plaza,

New York, New York 10020.

Wyco Pipe Line Company, 910 South Michigan Avenue, Chicago, Illinois 60680.

Yellowstone Pipe Line Co., % Continental Pipe Line Co., Drawer 1267, Ponca

City, Oklahoma 74602.

Senator MONRONEY. Thank you very much for your statement,

Mr. Durand, and for the information it contains on this new form of

theft.

Does robbery from the pipeline occur generally at the pumping

station?

Mr. DURAND. Many of the thefts have occurred there, Senator,

because the pipeline comes out of the ground there, the pumping

station is generally away from populated areas, and there are valves

on the pumps to which a hose can be attached and by which the

product can be siphoned off as it moves through the pumping station.

It affords a very good opportunity for theft.

There have been a number of cases also where enterprising thieves

have actually made taps on a line. This is a rather dangerous way of

stealing gasoline or crude oil, because the petroleum is moving through

the line under considerable pressure. However, with true American

ingenuity, a number of thefts have occurred by a thief welding a sleeve

on the line with a valve on it, and then puncturing a hole in the line

through the sleeve, and quickly closing the valve and then attaching

a hose to that.

Senator MONRONEY. In other words, the valve is attached to the

sleeve which is welded to the line before he drills through to open the

pipe?

Mr. DURAND. Yes.

Senator MONRONEY. And he can use it more than once then of

course.

Mr. DURAND. Yes, sir; he covers it up with ground and uses it as

long as he gets away with it.

Senator MONRONEY. And because of automation of these more

distantly located pumping stations and valve houses and things of

that kind, there is not apt to be any employees of the company there

to regulate it or to be observing as to whether the line is being tampered with?

Mr. DURAND. That is correct, sir.

Senator MONRONEY. How would they make a tap, I mean, would it

always be this method of welding the sleeve on and the valve and then

drilling through to use it?

Mr. DURAND. That is the way that has been described to me,

Senator, by a number of pipeline engineers.

Senator MONRONEY. Have the States acted at all in this field of

legislation?

Mr. DURAND. No, sir; there are no specific statutes covering this

subject.

Senator MONRONEY. Not any at all, by any of the States?

Mr. DURAND. No, sir. There are general criminal statutes which

sometimes apply, theft statutes.
THEFTS FROM INTERSTATE PIPELINES 9

Senator MONRONEY. Well, if you steal, it doesn't have to be

defined as stealing from a pipeline or stealing oil or gasoline, that

would be a crime, to go on someone else's property and steal something of value.

Mr. DURAND. That is correct.

Senator MONRONEY. But the lack of enforcement is the problem

you have. And unless there is legislation giving the Federal Government jurisdiction nothing can be done, unless it is clearly defined by

statute.

Mr. DURAND. That is correct, sir.

Senator MONRONEY. The FBI of course has jurisdiction over thefts

from our banking systems and others.

Mr. DURAND. Yes. Section 659, the section which your bill would

amend 

Senator MONRONEY. Gives the FBI that jurisdiction.

Mr. DURAND. That gives the FBI jurisdiction over all other forms

of interstate transportation.

Senator MONRONEY. And this would provide that the same enforcement, as well as the same penalties would apply.

Mr. DURAND. That is correct.

Senator MONRONEY. Do you have any studies indicating how many

States have legislation similar to that which is presented here?

Mr. DURAND. We do not, sir. I am unaware that there are any.

Mr. Squire informs me that there are a few statutes making it an

offense to tap a pipeline. There is such a statute in Texas. But

these are not common.

Senator MONRONEY. I see. We might be able to save time by

going on with the other witnesses and then ask our question of all of you.

Would that be all right?

Senator COTTON. I have to leave for a conference committee, so

may I ask one thing at this point?

Senator MONRONEY. Yes.

Senator COTTON. It is just along the line of the chairman's question

that brought out your answer about enforcement. It isn't quite clear

to me why thefts from a pipeline that runs through many States

should be selected for Federal enforcement when the thefts must take

place in the individual States.

I am prompted to ask you this question: Any pipeline is under

supervision by the company, and you have certain people who are

responsible for supervision of so many miles of pipeline, is that true?

Mr. DURAND. Yes. The pipelines are patrolled, sometimes by

aerial patrol, by the company for safety purposes.

Senator COTTON. So you do have machinery to at least detect

thefts taking place?

Mr. DURAND. Well, the patrol is not for that purpose, Senator

Cotton. Actually a number of these thefts have occurred in the

nighttime when the line is not being patrolled, or at times when the

patrol is not taking place. This patrol is to insure the efficient and

safe operation of the line and is not to apprehend criminals.

Senator COTTON. When did you detect that there had been thefts

even at nighttime? Was there some evidence left? Doesn't the

physical act of tapping the pipeline leave some indication that it has

been tapped?
10 THEFTS FROM INTERSTATE PIPELINES

Mr. DURAND. It does, if there is a tap on the line, Senator, and it

is discovered, of course there is evidence there. But so far as the

line is concerned, frequently the taps are made and then covered with

earth and then the thief will return in the night or at other times when

no one is about and siphon off gasoline or oil from the line.

I think the problem was pointed up by the fact that more and more

pumping stations, where thefts have also occurred, due to automation,

are becoming unattended around the clock and are controlled from a

master station many miles away. All you have there is an anchor

fence which can be scaled and the station can be broken into and

there are valves on the pumps in these stations and hoses can be

attached and gasoline and other petroleum products can be siphoned

off, because there is no one around and they are in very isolated

areas, in deep woods or out in the country.

Senator COTTON. I can understand that. The whole point of my

question and the whole point of the quandary I find myself in is this:

if this bill should be approved by the Congress, does it follow that

the Federal Government through its various enforcement agencies

is going to take over the policing of the pipelines?

Mr. DURAND. No, sir. The way it would work, Senator, is that

if a theft were detected by a pipeline, by one means or another, the

information would be conveyed to the FBI, and then the expert services

of that agency would be available to investigate how the theft occurred, to attempt to discover who committed the offense, and if

they could, arrest him and turn him over to the U.S. district attorney

for prosecution.

At the present time in several cases where thefts that have been

discovered, the pipeline—because the theft was in a thinly populated

area, where the police protection was not in depth, as it is in the city,

the pipeline went to the FBI and said, "We are losing gasoline, there

are thefts being committed, please help us." The FBI said—

We would like very much to, because we think this is an interstate facility and

this product is moving in interstate commerce, but unfortunately under the

Criminal Code we can only investigate thefts from railroads, motor carriers, air

carriers, and water carriers. We have no authority to assist you. However, if

the law were changed, we would be happy to do it.

So that is the reason for this legislation.

Senator COTTON. Well, I think that answers my inquiry. Despite

the fact that I think almost all States—and as a prosecuting attorney

I have had some experience in my own State, now have State police,

rangers, or State patrols, to cover the whole State.

You still feel that the investigation of a theft, after it has taken place,

and the machinery of the State constabularies is inadequate to give

you sufficient protection?

Mr. DURAND. Certainly that would not be true in all cases, Senator.

But it is true in some cases. And this may be partly due to the fact

that the State statute is not drawn so that it will provide adequate

penalties in the case of theft from pipelines. It is sometimes hard to

prove how much gasoline and oil has been stolen. So it is hard to

know what your monetary loss is. Therefore we think this Federal

statute would help.

The second beneficial effect of it would be if it became known as

it would be, that the FBI had jurisdiction over this type of theft,
THEFTS FROM INTERSTATE PIPELINES 11

that would be a powerful deterrent, without saddling the FBI with a

lot of cases.

Senator MONRONEY. This is very interesting and important questioning.

Senator COTTON. I get your point. If someone breaks into mycamp on a lake in New Hampshire and steals a television set, it presents no difficulty if you apprehend the thief, to draw an indictment,

say what he stole and the value of it and to satisfy the rules of procedure. But if somebody taps a pipeline you just don't know how

much he has taken. You don't know whether it is a misdemeanor or

a felony. It is difficult to allege it.

MT. DURAND. That is right, sir.

Senator COTTON. And this bill would take care of that?

Mr. DURAND. It will, sir; yes.

Senator COTTON. In other words, it attaches a particular penalty

to tapping a pipeline whether the theft is an ounce or a ton?

Mr. DURAND. The mere tap would be an offense under one section

of this bill.

Senator COTTON. I see.

Senator MONRONEY. This can result in a rather significant dollar

loss, can it not, to back up at midnight or some time and fill a large

tank transport with high test gasoline and take it maybe into another

State for bootlegging to filling stations?

Mr. DURAND. Yes, sir; it could run into many thousands of dollars.

Senator MONRONEY. Thousands per theft and it can be repeated in

a number of places before the pipeline company would be aware of

the fact it is going on?

Mr. DURAND. Yes, sir.

Senator MONRONEY. You have no way of knowing when the tap

has been made unless you discover the leak in the pipe or the valve

equipment which you detailed earlier?

Mr. DURAND. Yes, sir.

Senator MONRONEY. Do you have any questions, Mr. Dominick,

before we proceed with the other witnesses?

Senator DOMINICK. Just a couple, along the same line.

I ask these only because I want to continue the same line of questioning.

Do you have any pattern of where the thefts occur, geographically?

Mr. DURAND. No, sir; I don't think we have a pattern geographically. There is a pattern in that they generally occur at unattended

pump stations, or by taps on the line in isolated places. And sometimes from distribution centers. But I don't think you could say

that one section of the country is worse than another.

Senator- DOMINICK. So all sections of the country are equally

affected, as far as you can see?

Mr. DURAND. Yes, sir; wherever there is a pipeline system.

Senator DOMINICK. Do you have any pattern of who is responsible

for it? Are they possibly other operators, or are they just plain old

common ordinary garden variety crooks?

Mr. DURAND. I know of no pattern. I might ask my associates

here if anyone is aware of one. I know of none.

Senator DOMINICK. Did I understand you correctly to say that

thefts from railroads, airlines, and water carriers are already subject

to FBI investigation?

Mr. DURAND. That is correct, sir
12 THEFTS FROM INTERSTATE PIPELINES

Senator DOMINICK. What would happen, if we put your industry

under the same status by passage of this bill, to the gas pipelines?

Do they have that problem?

Mr. DURAND. They are covered by this bill, sir. Their problem,

as I understand it, is probably not as great as ours, because it is much

more difficult to tap a gas transmission line than an oil transmission

line.

Senator DOMINICK. How many cases per year are we dealing with?

Mr. DURAND. You have to divide up these cases, Senator Dominick,

as between cases where the theft has occurred and it is known and

some effort has been made to apprehend the thief, and cases where

thefts have not been discovered for a number of years, because the

thief has been so clever that his device has gone undetected.

We have attempted to make a study of thefts from pipelines but

we found that it had limited value, because sometimes the companies

would report "Well, we have found this sleeve welded on our pipe

out in the boondocks and obviously from its condition, it has been

there for a number of years and there have been a number of thefts

and we don't know how much oil and gasoline we have lost."

It is hard to say that is just one criminal offense. But we have

listed these cases that way, because we knew of no other way to list

them. Over a period of approximately 10 years there have been

54 thefts from pipelines or pipeline pump stations.

Senator DOMINICK. Are those the ones that have been prosecuted

or are those the ones that have been discovered and reported?

Mr. DURAND. They have been discovered and reported. Sometimes there were prosecutions, and in a few cases there were convictions, but more often than not the thief wasn't discovered, or if

he was discovered, he was not prosecuted.

So the picture is complicated.

Senator DOMINICK. How many additional FBI personnel, if any,

do you think would be required?

Mr. DURAND. We don't think any.

Senator DOMINICK. Without trying to rehash everything that the

distinguished Senators from Oklahoma and New Hampshire have

already said to you, how can we, for the record, determine that State

enforcement and State prosecution is insufficient if, as you say, many

of the thefts are not prosecuted, even when the person has been

found?

Mr. DURAND. Well, Senator, I meant to indicate that the fact that

there are cases where there were no prosecutions doesn't arise from

any desire on the part of the pipeline that there not be a prosecution.

The local law enforcement officers may feel their case is not sufficiently

good, or the statute may not be sufficiently clear in its treatment of

the theft, to insure successful prosecution.

One of my associates, Mr. Vickrey, points out in some cases you

have a theft in one State and a sale in another, and this leads to a

confused jurisdictional situation.

Senator DOMINICK. Your estimate is that there have been 54 cases

over 10 years?

Mr. DURAND. There have been 54 known thefts through taps on

the pipeline or theft from pump station, which have been reported

to the association by its members. But that figure is misleading in

that a number of our members said we discovered a tap on our pipe-
THEFTS FROM INTERSTATE PIPELINES 13

line at point X, which had obviously been there for a number of

years and we are confident that we have lost a lot of gasoline or a lot

of petroleum durino•

b

those years but we don't know how much—

So we don't know what we lost, but we are sure from the dimensions

of the tap that it was a substantial amount.

Senator DOMINICK. Do we have any estimate of value on those 54

cases that were reported.

Mr. DURAND. That is difficult, and we erred on the conservative

side, but it is on the order of $300,000 to $500,000.

Senator DOMINICK. Thank you, Mr. Chairman.

Senator MONRONEY. You have a problem, do you not, in the fact

that the portion of the United States Code, 659, which this bill

would amend sets the following penalties: $5,000 and 10 years

imprisonment, but if the value of the product does not exceed $100,

the penalty is $1,000 and 1 year? Wouldn't your difficulty in measuring the losses present problems under this section?

Mr. DURAND. I think we would still have problems. I don't think

they would be as serious as the ones we have now. We have to prove

our case in any event.

Senator MONRONEY. And the very fact you can make a tap on the

line and bury evidence of it at least by covering it with dirt, leads to

uncertainty as to how much has actually been taken from a theft or

a series of thefts.

Mr. DURAND. We will still have problems; yes, sir.

Senator MONRONEY. You don't expect though if we passed legislation like this that the FBI would assume the full responsibility for

safe transport without theft of all of the oil, and oil products that go

through the lines?

Mr. DURAND. No, sir.

Senator MONRONEY. It would be like the railroads, the pipelines

are going to have to maintain a pretty good surveillance themselves

as well?

Mr. DURAND. Yes, sir.

Senator DOMINICK. Could I ask one more question?

Senator MONRONEY. Yes.

Senator DOMINICK. Don't you have metering devices at each of the

pumping stations to determine how much oil or gas has gone by?

Mr. DURAND. I would like to ask one of my associates to answer

that.

Mr. VICKREY. My name is Jack Vickrey, Colonial Pipe Line Co.

Yes, there are metering facilities at points of interchange, where

they go through stations or reduce from one size line to another_, or

for some reason or other go into a tank or out of a tank. But those

devices are not sufficiently sophisticated in a large pipeline to detect

amounts as small as might be stolen. For instance, on the Colonial

Pipeline system we have a minimum batch of 75,000 barrels, moving

through a 36-inch line at 5 miles per hour, and you can steal a substantial amount of gasoline from a tap and we would have very much

difficulty in detecting it. The meter would be off a small amount,

and that would take care, probably, of the amount of the theft.

Another problem is that, like in our system, the products originate

on the front end of the line, around the Houston area. We have over

a hundred delivery points up and down the line. And it is not until
14 THEFTS FROM INTERSTATE PIPELINES

you make the final delivery that you calculate the total amount

that might be missing. And there is always some variation.

From a practical standpoint, it is impossible to detect a small

amount of loss at any particular point on a large system.

Senator DOMINICK. Well, I won't go into how small is small and

how large is large. But I would think that part of the problem that

we have been talking about here is the ability of the pipelines to be

able to determine where the leak is and whether or not it is due to a

sleeve, due to a break in the pipe, or whether it is due to some kind

of osmosis of another kind, that the oil gets out of the line. You

have these metering devices on gas pipelines and you have them on

electric current and you have them on water.

Mr. VICKREY. The metering devices on the products pipeline are

probably as sophisticated as any metering devices known, but if you

are moving, as we are in the Colonial system, 800,000 barrels a day,

right now our current movement is 760,000 barrels a day, and that is

moving at 5 miles an hour continuous flow through the system, continuously, never stopping, you would have to have a very fine meter

to detect say the theft of 1,000 barrels of gasoline at some points on

on the line.

Senator DOMINICK. Thank you, Mr. Vickrey.

Senator MONRONEY. Thank you, Senator Dominick.

May we hear from the other witnesses and then we will proceed

with any other questions we might have?

Mr. DURAND. Our next witness is Mr. Jack Vickrey, Colonial

Pipeline.

Senator MONRONEY. He is vice president and general counsel,

Colonial Pipeline, Atlanta, Ga.?

Mr. VICKREY. Yes, sir.

Senator MONRONEY. We are happy to have you here, Mr. Vickrey.

Mr. VICKREY. Thank you. Colonial Pipeline Co. is a Delaware

corporation which owns and operates a petroleum products pipeline

extending from Houston, Tex., to the New York Harbor area. The

Colonial system consists of 1,531 miles of trunkline, ranging from

36 to 30 inches in diameter, and 1,315 miles of lateral lines, and is

presently capable of transporting about 800,000 barrels per day of

gasoline, kerosene, home heating oil, diesel fuel and jet fuels from

five input points on the Gulf coast to 164 delivery terminals throughout the south and eastern seaboard. Colonial has in its custody at all

times about $70 million worth of petroleum products belong tO its

shippers. Colonial is a wholly interstate common carrier subject to

part I of the Interstate Commerce Act and regulated by the Interstate Commerce Commission.

The Colonial Pipeline system is highly automated, and has a

number of pumping stations on the main line which are unattended at

night. One such station is located at Bremen, Ga., some 35 miles

southwest of Atlanta. This station has an operator who works a day

shift, but no one works at night. The Bremen station is enclosed by a

tall chain-link fence with a locked gate, and is lighted by floodlights.

On Saturday, October 23, 1965, at about 2 a.m., two Colonial

employees went to the Bremen station to check on some product

movements. They discovered two men inside the fence loading

gasoline into a large truck containing three 560-gallon tanks, by means

of a hose connected to a valve on the 36-inch main line. The two men
THEFTS FROM INTERSTATE PIPELINES 15

,escaped through the open gate into the darkness, leaving the truck

behind. The Colonial employees reported the theft to the Bremen

Police Department, who obtained some bloodhounds from a nearby

State prison camp, and tracked down and arrested a man hiding in the

woods. He said he was possum hunting. The Federal Bureau of

Investigation was notified of the theft, but after a preliminary investigation, they withdrew from the case because the U.S. attorney gave

them an opinion that the thefts from interstate shipments statute

.(18 U.S.C.A. sec. 659) did not apply to pipelines and there was no

-Federal jurisdiction.

Colonial also notified the sheriff of Haralson County, Ga., the

'Georgia Motor Fuel Tax Office, the Georgia Bureau of Investigation,

and employed a firm of private investigators to investigate the thefts.

The facts developed by these various investigative agencies revealed

that the thefts from Colonial's Bremen station had continued on a

regular basis for more than a year. Four or more men, who were

also in the business of running moonshine whiskey, had been using

two tank trucks and had been selling the gasoline at discount prices

to several service stations in Georgia and Alabama. The thieves had

obtained a key to the gate through an employee of one of the contractors who built the station. Their practice was to enter the

.station at night by unlocking the gate, and two men could fill the

tanks on their truck in about 7 minutes. Another man in a pickup

truck watched the road entering the station, and they maintained

.communication by means of walkie-talkie radios, one of which was

found on the abandoned truck.

At the time of the thefts, Colonial was moving approximately

750,000 barrels per day of petroleum products through the main line

at Bremen station at a speed of about 5 miles per hour, and because

of the large volumes being moved through the line, it was impossible

for Colonial to detect or calculate the losses at this particular station,

but Colonial undoubtedly lost several thousand barrels of products

over the year's period.

This is the only actual theft on Colonial's system which has been

in operation about 2 years, so far as we know, but during the con-

-struction stage Colonial unearthed a 2-inch valve which had been

tapped on its 32-inch main line just north of Greensboro, N.C., by

some enterprising thief.

I worked several years as a special agent of the FBI and I am

-convinced that if the FBI could have continued on this case the

culprits would have been apprehended and brought to justice.

The sheriff's office of Haralson County has sole jurisdiction over

the Bremen theft, since our station is located outside the city limits.

After a brief investigation, the sheriff's office released the prisoner,

and no prosecutions are expected. The Georgia Motor Fuel Tax

Office and the Georgia Bureau of Investigation made a diligent effort to

uncover tax violations on the gasoline sales, but as yet have not

obtained sufficient tangible evidence for a prosecution. Their investigation was made more difficult by the fact that the thefts and

sales of the stolen products involved many people in several States.

As Mr. Durand pointed out, today there are over 200,000 miles of

crude oil and petroleum products pipelines in the United States,

which move three-fourths of the crude oil and one-fourth of all

petroleum products in this country; about 17 percent of all intercity
16 THEFTS FROM INTERSTATE PIPELINES

freight in this country moves through these pipelines. We believe

there is as much reason for the Federal Government to protect interstate pipeline shipments as there is to protect interstate shipments by

rail, airline, motor vehicle, bus or water vessel. Actually, pipelines

are far more vulnerable to thievery than other types of carriers because

of the impossibility of constantly patrolling a 200,000-mile pipeline

network.

In my opinion, the Federal Bureau of Investigation is the only

agency that can properly investigate and handle interstate thefts of

this kind, and Colonial Pipeline Co. fully supports S. 3433.

Senator MONRONEY. Thank you very much, Mr. Vickrey, for your

statement. Did you wish to ask any questions now, or do you want

to go on to the other witnesses first?

Senator DOMINICK. I will wait until later.

Senator MONRONEY. The next witness is Mr. Robert E. Thomas,

president of the Mid-America Pipeline Co., Tulsa, Okla. We are

happy to have your statement, Mr. Thomas.

Mr. THOMAS. Thank you.

My name is Robert E. Thomas. I am president of Mid-America

Pipeline Co., of Tulsa, Okla. Mid-America is a publicly owned

company whose stock is listed on the New York Stock Exchange.

Among other business activities, Mid-America owns and operates a

2,600 mile common carrier pipeline system for transporting liquefied

petroleum gases, in liquid form, from gasoline plants in the Southwest

where they are produced to the upper Middle West. I am here today

to express our support for S. 3433.

Beginning in early 1963, we experienced a steady loss of product on

our Snyder line in west Texas. Our regular aerial patrol found nothing

to account for the loss. We then placed the pipeline under cal eful

surveillance by having our personnel actually walk the right-of-way

several times. Finally, on November 5, 1963, one of our personnel

walking the line discovered an illegal line tap south of Lion Diamond M

gasoline plant. The tap was made with a half-inch pipe and had a,

small, relatively low-pressure valve attached for ease in removing

product from the line. A cover had been made for the tapped area

and covered with dirt so that it was impossible to detect it by aerial

patrol.

We then called in the Texas Rangers and the local sheriff, who.

arranged for a detailed surveillance of the area. After 2 weeks, during

which no stealing of product was observed, we decided we must,

remove the tap and return the pipeline to a normal operating condition.

The half-inch valve used in making the line tap was a valve rated

for 400 pounds pressure. Operating line pressures at this particular

point varied from time to time from 500 pounds to more than 1,000

pounds pressure and this tap was, therefore, a constant menace to

anybody nearby. Fortunately, it was located in an unpopulated area..

Any individual attempting the theft of product from a pipeline by

making a line tap of this sort would usually not possess the proper.

type of equipment nor would he have a knowledge of pipeline pressure,

flow, and other operating conditions as they might vary from day to,

day. Our pipeline crews frequently tap one of our lines but this is

tapping done under controlled conditions after line pressure has been

reduced and the whole job requires a great deal of skill and knowledge,.
THEFTS FROM INTERSTATE PIPELINES 17

and some specialized equipment. Only in this way can a line tap be

done with safety to company personnel as well as the public. Any

person with a knowledge of pipeline operations knows that uncontrolled

tapping by unauthorized people could result in serious injury or death,

not only to the persons making the tap but also to innocent members

of the public who might be affected similarly or whose property

might be substantially damaged.

There, of course, is also the question of monetary loss to our company from this theft. We feel that we lost at the time no less than

50,000 gallons of propane, which had an estimated value at retail

prices then prevailing of possibly $4,000.

The Texas Rangers, together with the Texas Tax Commission, did

an excellent job of maintaining their search for the parties guilty of

this tap. They finally located two men who admitted taking small

quantities of propane and selling it to various individuals in the area.

These two men were subsequently prosecuted for tax evasion and

also for stealing, and were found guilty.

I do feel that the proposed legislation will be beneficial to pipelines

and that we are entitled as an industry to have the weight of the

Federal Government behind convictions for thefts of this sort. There

are many individuals, rightly or wrongly, who continue to have far

more fear of the Federal Government than they do of State and local

governments and this very fear may in the future, provided this legislation is passed, be instrumental in preventing these thefts, and of

course, instrumental in preventing the occurrences of the dangerous

conditions which can result from the tapping of relatively highpressure pipelines with inadequate equipment and inadequate knowledge of the hazards involved.

I strongly recommend favorable action by the committee upon

S. 3433.

Senator MONRONEY. Thank you very much, Mr. Thomas. Do

you move any of your product on rail transportation, tank car transportation?

Mr. THOMAS. No; we do not.

Senator MONRONEY. I was wondering what the experience was in

loss of the product from tank cars which probably are not locked,

•They just have the ordinary railroad seal, which for decades has

furnished protection to shipments moving by rail.

Mr. THOMAS. I have no knowledge on railroad tank car losses.

I am sure there must be some, however, there is loss of many other

products moving by railroad and I would think that the tank cars

wouldn't be exempt from that risk.

Senator MONRONEY. Yes. Our next witness is Mr. W. H. McCollough, vice president, Texas Eastern Transmission Corp., Houston,

Tex.

Senator DOMINICK. Mr. Chairman, just one question before Mr.

McCollough testifies.

Senator MONRONEY. Yes.

Senator DOMINICK. In the last portion of your statement, Mr.

Thomas, you say the passage of the bill would be instrumental in

preventing the occurrence of the dangerous conditions which can

result from tapping of relatively high-pressure pipelines. Are you

saying that this is true solely because the fear of the FBI would cut

clown the amount that is expected or anticipated to occur in the
18 THEFTS FROM INTERSTATE PIPELINES

future or are you saying that the FBI would be required to do some

policing of the pipelines?

Mr. THOMAS. No. I wouldn't think the FBI would be expected

to do any policing, Senator Dominick. They would have as much

difficulty policing it on an everyday basis as the pipeline company

itself does. I do feel that the knowledge, and that knowledge would

gradually get around among the common variety of crooks, as you

call them, that the Federal Government would take an interest in

thefts of this sort and would prosecute, that would by itself be a

deterrent to a certain number of these people who might otherwise

think it an attractive venture.

Senator DOMINICK. Thank you. I just wanted to clear the record

on that.

Senator MONRONEY. It would be possible, would it not, Mr.

Thomas, on these isolated pumping stations and other switch points,

to post notice that Federal law prohibits the violation of section so

and so of the Federal code for the theft of products moving through

interstate pipelines.

Mr. THOMAS. I believe the posting of such a notice would be feasible; yes.

Senator MONRONEY. It would be helpful as a sort of an extra guard

at least.

Mr. McCollough, we are happy to have you give your statement

at this time.

Mr. McCoLLouGH. I am William H. McCollough. I am vice

president of Texas Eastern Transmission Corp., of Houston, Tex.,

and general manager of that firm's Products Pipeline Division. This

division operates a petroleum products system, including the little

big inch pipeline, extending from points of origin on the Texas gulf

coast to Chicago, Ill., and other population centers in the upper Midwest, and also extending to points near Philadelphia, Pa., and Albany,

N.Y. This system transports a full range of refined petroleum products, including gasoline, kerosene, fuel oil, jet fuel, propane, and

butane. The system consists of over 3,200 miles of petroleum products

pipelines and numerous delivery terminals and pump stations located.

in nine States. We operate as a common carrier in interstate commerce, and the division is regulated by the Interstate Commerce

Commission.

I support legislation making it a crime to steal from pipelines. It 

isour belief that such legislation will act as a significant deterrent

to illegal acts that have become an increasing problem to petroleum

products pipelines.

Since we commenced products pipelining operations about 10 year&

ago we have experienced small but frequent thefts of petroleum products from our system as a result of what is known in the industry as.

an illegal "tap" of a line. This "tap" generally consists of a clamp

and valve attached to a pipeline through which a hole is drilled into the

line. By connecting a hose or pipe to this valve the thief can fill a

tank truck or steel drums. Tapping a high-pressure line is a hazardous operation when conducted by persons who are not trained and

who do not use the proper equipment.

Since January 1958, there have been at least 11 instances of illegal

taps or attempted illegal taps to our lines. Many of these were discovered when the line was damaged in the installation of the tap.
THEFTS FROM INTERSTATE PIPELINES 19

Others were detected under our normal inspection and monitoring

procedures. Due to the very large volumes passing the point where

the taps are installed, it has been difficult to ascertain the volume of

product stolen through these taps. We are certain, however, that

over the years tens of thousands of gallons of gasoline have been

stolen from us in this manner. Since we are a common carrier we

are responsible for losses occurring in our lines and must reimburse

our shippers for shortages. Some of this stolen material has undoubtedly found its way into commercial channels and consequently

has depiived governmental agencies of motor fuel tax revenue.

Since a pipeline is an "invisible highway," many of the communities

along our lines are unfamiliar with our company and the business in

which we are engaged. In many areas where we operate there are no

company personnel for many miles and no installations above ground.

Understandably, in most instances local law enforcement agencies do

not have the personnel, training, or the inclination to deal with the

problem of pipeline thefts.

An instance occurring in May of this year is typical. A suspect,

who had been observed hauling barrels in a truck at regular intervals

was arrested by a local deputy sheriff who thought the suspect was

engaged in moonshining activities. After the arrest he found that the

drums contained 275 gallons of gasoline which later proved to be

from our pipeline. If the suspect is prosecuted, which appears doubtful, any punishment will be insignificant.

Local laws do not provide sufficient deterrent for this type of crime,

particularly when prosecution under such laws that do exist is uncertain. If the theft of goods in interstate commerce running in a,

pipeline constituted a violation of Federal law, the penalties and certainty of prosecution would be sufficient deterrent to greatly reduce

crimes of this type. Since in almost every instance we have discovered the thefts ourselves we do not believe additional personnel

or significant time of Federal agencies would be involved in enforcing:

the legislation.

It is my belief that without Federal legislation the problem of theft

from pipelines will greatly increase. In pipelining the trend is toward

more unattended automatic facilities, which are inviting targets for

theft. To compound the problem, it is our experience that the thefts.

are being more skillfully conducted by better organized gangs. Recent taps have been made by use of intricate valving and piping with

great skill used to reduce chances of detection. A recent tap involved

installation of a buried pipeline from the tap to a filling depot many

feet off the pipeline right of way.

The problem of theft from pipelines exists, it appears to be increasing, it is difficult to control the situation through local law enforcement agencies and Federal legislation is therefore needed.

Senator MONRONEY. Thank you very much, Mr. McCollough.

You mention on page 1 that your transportation system includes.

gasoline, kerosene, fuel oil, jet fuel, propane, and butane.

Mr. MCCOLL-UGH. Yes, sir.

Senator MONRONEY. Do you have trouble with several different

kinds or are most of the taps on gasoline?

Mr. McCoLLouGH. Most of them have affected gasoline. The

lines that have been tapped by and large have been those that are in

straight gasoline service. We have lines that we run all of these
20 THEFTS FROM INTERSTATE PIPELINES

products through and we have others that will stay in one product

service for a considerable period of time.

Senator MONRONEY. Tapping and attempting to move propane or

butane could be very hazardous, could it not, to anyone unfamiliar

with it or lacking equipment to move it?

Mr. McCoLLouGn. Yes, sir; it is a very dangerous operation, if

they are not trained to do it.

Senator MONRONEY. In your theft example, Mr. McCollough, you

'stated that the gasoline proved to be from your pipeline. How did

.you determine this?

Mr. McCoLLouGH. When the deputy shook this fellow down, he

wanted to know where the gasoline came from, and the fellow took him

•to our pipeline and showed him where the tap was installed.

Senator MONRONEY. I see. But even then you didn't get a

,conviction?

Mr. McCoLLouGH. No, sir. The fellow posted a nominal bond of

$50, something like that, and he hasn't been prosecuted, and I don't

think he will be.

Senator MONRONEY. Do you have any questions at this time?

Senator DOMINICK. No.

Senator MONRONEY. Next we have Mr. Kenneth Heady, assistant

general counsel, Phillips Petroleum Co., Bartlesville, Okla. We are

happy to have you, Mr. Heady.

Mr. HEADY. Thank you Senator. I want to thank you for the

opportunity to appear before you and explain our reasons for favoring

adoption of the Senate bill, S. 3433. Phillips Petroleum Co. and its

subsidiary, Phillips Pipe Line Co., each operate extensive interstate

pipeline systems transporting crude oil and petroleum products.

This system necessarily requires a large number of pumping stations.

Because of the remote location of most of these stations, in recent

years we have converted many of them to completely automated or

semiautomated stations. As a result, over 75 percent of these stations

are operated in such a way that company employees will be on the

site only part of the time, usually during daylight hours.

Up to this point we have had relatively little problem with thefts

from these pipelines and pumping stations. We had gone for some

time without being victimized—at least to our knowledge. But early

this month, two men were surprised in the act of taking gasoline at our

La Junta, Colo., terminal.

It is the unmanned stations where we anticipate most of our troubles

will occur. The longer these automated and semiautomated stations

are in operation, the more general and widespread will be the knowledge that they are wholly or partly unattended. We expect our problem of thefts from these stations will increase substantially in the

future.

The organized criminal society seems to have its own effective

methods of communication. If one element in one area should find

that these unattended stations present a good opportunity to get

away with a substantial quantity of a salable product with little

risk, it won't be very long before we will find the same thing happening

at several other points on our system.

The vulnerability of these automated and semiautomated stations

to pilfering and theft is compounded by the remote locations of most

of them. Out of 69 main line pumping stations, only a half dozen or
THEFTS FROM INTERSTATE PIPELINES 21

SO are located close to well-populated areas. None of them is located

inside city limits. And as a general rule, it is the fully manned stations

which are located in the populated areas. The automated and semiautomated stations, on the other hand, are located in sparsely populated areas, often miles from a community of any kind.

As a result, local authorities are able to provide little if any police

protection or assistance. If a theft does occur, in most cases we must

depend upon the county authorities of a sparsely populated county

which has neither the personnel nor the means to pursue an active

investigation.

We believe the existence of a statute making thefts from a pipeline

a Federal offense, with the possibility if not the certainty of bringing

to bear the extensive investigative forces of the Federal Bureau of

Investigation, will in and of itself provide a healthy deterrent to pilfering and thefts from these remote locations. In this respect, these

pipelines will have the same type of protection which is presently

afforded to other carriers.

I would like to discuss with you also a second type of theft from.

interstate pipelines. In addition to the crude oil and products pipelines which I have described, Phillips Petroleum Co. also operates a.

number of natural gasoline extraction plants. Each of these plants

is served by an extensive gas gathering system, consisting of a series

of gas pipelines extending from the wells to the plants. In most

cases, the residue gas remaining after liquid extraction is sold to interstate pipeline companies, and the courts have held that the gas

moving through these gathering lines is "in" interstate commerce

from the time the gas leaves the well. Our experience with regard to

these gas pipelines has been far more discouraging than with the

crude oil and products pipelines.

In the last 10 years Phillips Petroleum Co. has uncovered over

30 instances in which gas was being removed secretly and without

permission from these gas gathering lines. The fact that these gaslines are operating under high pressure makes tapping them dangerous

to the line and to the individual, but the frequency with which such

tapping occurs indicates that it is not particularly difficult. Civil

remedies, such as injunctions against further tappings, have offered some

protection to us, but for a number of reasons these civil remedies do

not provide an adequate deterrent.

In two instances, criminal convictions have been obtained under

State pipeline tapping statutes, one in Sherman County, Tex., and

one in Texas County, Okla. These isolated convictions under local

criminal statutes do not mean, however, that local statutes provide

adequate protection. Most States have statutes preventing illegal

or unauthorized connections with gaslines. These were intended,

and are often framed, to apply to unauthorized connections or bypassing of meters on local gas distribution systems. Many of these

statutes would probably not be applicable to illegal connections to

high-pressure gaslines. In any event, because of the fact that these

State statutes were intended to apply in situations in which the quantities would be small, the penalties provided by them are often small,

in most cases involving only a misdemeanor. It is doubtful that these

local statutes provide any effective deterrent to the type of tapping

of gas pipelines which I have described. Our experience would indicate that they have provided no deterrent of any kind.
22 THEFTS FROM INTERSTATE PIPELINES

The taking of gas from pipelines poses even more difficult problems

of prevention and apprehension than does the taking from a crude oil

or products pipeline. The means of taking is buried completely in

the ground. In many instances the illegal tap is made on property

owned or occupied by the taker, so that the illegal connection may be

accomplished without raising any undue suspicion.

For reasons similar to those stated earlier, local authorities cannot

be expected to provide adequate protection and assistance. Also,

the nature of the taking of gas and the circumstances under which it

is accomplished are apt to result in situations in which local authorities find themselves investigating and perhaps accusing friends and

neighbors of long standing. These circumstances are not such as to

result in the most intensive efforts cf investigation, apprehension, and

prosecution.

We, therefore, strongly urge the adcption of the proposed amendment. We believe that the mere existence of a statute which makes

the unauthorized taking from an oil or gas pipeline a Federal offense

will by itself constitute a wholesome preventive measure. Persons

who might be wholly unconcerned about prosecution by local authorities might very well reach a different conclusion if their act could

bring them to account before Federal authorities. In those cases

where thefts do occur from oil or gas pipelines, the amendment would

substantially increase the likelihood of apprehension and punishment

of the offenders.

We are grateful for the opportunity to express our views to this

committee and we appreciate your attention and interest. We

respectfully urge the adoption of this amendment.

Senator MONRONEY. Thank you very much, Mr. Heady for your

testimony. You mention in your statement that some of these thefts

are by the owners of the land through which the pipeline runs. This

would not apply necessarily to the connections with the well on the

property, would it? As I understand it, the custom has been to give

to the person owning the well whatever gas he cares to use?

Mr. HEADY. The Senator is familiar, of course, with the usual provision of the oil and gas lease, which provides to the lessor the right

to use gas free of charge for domestic purposes. This is not the type

of situation which we have involved here.

Senator MONRONEY. This is transit through property of the pipeline

without any production necessarily there?

Mr. HEADY. Yes, we have had many connections to our gathering

systems, in which the gathering line is simply crossing the property

under a pipeline right-of-way or easement and the connection is made

by tapping to that gathering line.

Senator MONRONEY. But most of your leases already permit the

giving of gas free to the owner of the well, or rather to the owner of the

land on which the gas well is situated, whatever gas he might need?

Mr. HEADY. The lease does provide generally in terms to the principal dwelling on the lease for inside lights or stoves free gas for that

purpose. We have had some instances in which that privilege has

been abused, and the line which leads from the well to the principal

dwelling has itself been tapped or connected to draw gas from that

source. In that instance there is a further effect in the sense that

that gas is usually not measured, because the gas for the principal

,dwelling is usually in relatively small quantities. If the gas is taken
THEFTS FROM INTERSTATE PIPELINES 23

from there it is not measured, the State loses the gross production

tax revenues. There is no royalty paid on it and there are additional

losses, above just the gas itself.

Senator MONRONEY. Sometimes it is used to pump irrigation wells,

is it not?

Mr. HEADY. This is the most common circumstance which we have

run into; yes, sir.

Senator MONRONEY. But that would not be a situation if the well

supplying the gas is on the farmer's land?

Mr. HEADY. We would view this statute as covering a situation

where the gathering line is tapped for the purpose of providing gas

for that purpose. There are several companies in the area where we

have had this trouble, which are in the business of selling and distributing gas for that purpose. And in many instances the taps made on

our lines apparently have been for the purpose of avoiding buying the

gas from those companies.

Senator MONRONEY. I see. You feel that legislation in the Federal

field would aid the actually policing of this, and that the effect of the

thoroughness of the Federal prosecution of these cases in the Federal

,court would be more effective?

Mr. HEADY. Senator, I am not sure but what the mere fact that it

,could be a serious offense under Federal law and that the person doing

it could be brought to account before Federal authorities would

itself provide the deterrent. The mere knowledge that this was a

Federal offense I think would in itself operate to cause many of these

-people to think twice about their acts.

Senator MONRONEY. You feel the skill in building the case, or

getting the evidence, even though they were not actually policing the

lines, would have a deterrent effect?

Mr. HEADY. Yes; I believe SO, very definitely.

Senator MONRONEY. Senator Dominick?

Senator DOMINICK. Mr. Heady, what did you do in La Junta?

Mr. HEADY. In that particular circumstance one of the men was

,captured. He has been prosecuted. The other man got away and

the one who was captured has, at the last of my knowledge, has

refused to identify the other man with him. But the one man who

was captured has been prosecuted, and—I'm sorry, but I do not know

the actual result of that, or whether there has been a final result.

Senator DOMINICK. I am just happy to see the local law enforcement officers were on the ball there anyhow.

Mr. HEADY. Yes. I think all of us are in the position that none of

us is in any sense being critical of local law enforcemen-, agencies.

Certainly I must say this, that in the instance of the two criminal

convictions which I mentioned, we had the utmost cooperation from

the local law enforcement officers, and particularly so in Sherman

County, Tex. But, I think the circumstances are such the .he local

enforcement provisions and local enforcement agencies simply find

this a situation with which they are not equipped to deal.

Senator DOMINICK. That is all, Mr. Chairman.

Senator MONRONEY. At what point, Mr. Durand, do you think

the FBI should act)? At the discovery of an individual tap on a line,

or when a significant loss of volume has been reported or occurred?

Tr. DURAND. I think it is a little difficult to generalize about that,

Senator. May I have Mr. Vickrey answer that?
24 THEFTS FROM INTERSTATE PIPELINES

Mr. VICKREY. The reason I would like to answer that is because

I said earlier I spent 3 or 4 years as a special agent in the FBI myself

and I am somewhat familiar with their practices, although this is

years ago. The FBI, as far as I know, doesn't police anything. They

simply receive complaints when they are filed with them, they take a

look at the complaint, possibly make a preliminary inquiry. And if

they think there is enough substance to it, that it might merit further

investigation, they do so. Then when they get the facts, they take it

to the U.S. attorney, and present it to him, and he tells them whether

or not it is sufficient to take it before a grand jury.

In these cases I would say that probably if you detected the tap

you would probably report it to the FBI, and they might do what was

necessary to see if they could catch the culprits. Or if you caught

someone in the act, as we did in Bremen, they could take and interview—they did actually in this case interview the man before they

talked to the U.S. attorney. I am satisfied there were adequate leads

in that case. And if they had followed them up with the expertness

which they can, they would have made that case, whereas the local

deputy sheriffs don't know that much about investigative work.

They are limited in their ability to follow these things up, particularly

where you have to go to other States for some information. But I

have no fear at all that by bringing the pipelines under this law would

create any additional burdens on the FBI, and I don't think they

would think so. It would only mean we would be treated the same as

railroad thefts and other thefts, and if there was sufficient information

to justify an investigation, they would do so. But they wouldn't

be called upon to police it, nor does this mean that the pipelines would

in any way stop their policing activities. Because basically what we

have got to do is do everything we can to protect against these thefts,

and we do so. But 200,000 miles of pipelines, unattended, is very

difficult to police.

Senator MONRONEY. Running hundreds of millions of dollars

worth of products each month.

Mr. VICKERY. Yes, sir.

Senator MONRONEY. Therefore, you think the primary advantage

in this bill is not necessarily in the penalties, but in the expertise of

the FBI investigation and the thoroughness of court action.

Mr. VICKREY. Yes, sir.

Senator MONRONEY. And this you feel would be conducive to

correcting a climate that is getting steadily worse?

Mr. VICKREY. I think it would be a deterrent to organized gang

activities which they could very well become.

Senator MONRONEY. And the pipeline companies would still have

to exercise vigilance through their regular pipeline inspections,

aerial flights, and checking in any way possible to discover the losses.

You would not expect the FBI to be a policeman on duty, but rather

one that would respond to a call when you detect pilferage or thievery

from your lines?

Mr. VICKREY. Yes, sir; it would be treated the same as a theft

from a railroad car, or a theft from one of the other types of interstate transporting agencies that is covered. And I am sure they

would give it the attention that each case deserved.

SENATOR MONRONEY. IS the industry trying to develop ways of

detecting more accurate measuring of the large volumes to allow them

to determine exactly how much is being stolen?
THEFTS FROM INTERSTATE PIPELINES 25

Mr. VICKREY. That is right, sir. Even if you have absolutely

accurate measuring devices, where you move a product, say over a

hundred- or two hundred-mile trip before you take it out of the line,

even if you had a large enough theft that you knew something was

missing, you wouldn't know exactly where it was on that line. It

might take you a long time to find it.

Senator MONRONEY. You might have a leak that goes undetected,

I guess, into the ground and not show up from the aerial surveillance;

is that correct?

Mr. VICKREY. That is correct.

Senator MONRONEY. Isn't it also a fact that most of the product, if

it is gasoline that is being stolen and then sold, would be escaping both

the Federal and State taxation? That taxation occurs at the point of

sale so that if it is illegally sold it would not be reported; and therefore

the gasoline tax for the Federal Interstate Highway System and for

the State highway construction would be lost?

Mr. VICKREY. That is true. I understand the Federal Government relies primarily on the State tax agencies to develop that.

Senator MONRONEY. Do you feel that any of this theft is being

conducted by organized gangs?

Mr. VICKREY. This was an organized gang in the Bremen area from

what information we had. There were at least four men that were

known criminals that were in the bootlegging activity. And they

had it down to where they had at least two trucks and they had at

least three service stations. This we got from confidential informers.

Senator MONRONEY. Their own service station or friends?

Mr. VICKREY. One of the gang members did own a station and the

others sold to others. But the information we have gotten on this

is not sufficient to merit prosecution, but it is enough to know what is

going on.

Senator MONRONEY. Are there enough thefts for you to have a

department to inspect lines specifically for taps put on for theft?

It would be uneconomic, wouldn't it, in the light of what you know,

about the volume of loss?

Mr. VICKREY. Well, if there was sufficient loss in the line at any

point to suspect that there was either a leak or was a theft, they

would certainly make an effort to uncover it. But the difficulty is

that you don't make your final calculations until you make your

final deliveries, and 3,000 miles of pipeline is a long area to look

for one.

Senator MONRONEY. And there is no way you can even walk the

line and be likely to find a valve that has been tapped on, because

it would be covered up by dirt or foliage or something?

Mr. VICKREY. That is true.

Senator MONRONEY. Would there be any benefit of having some of

the manned stations in the sparsely populated areas to monitor the

volume, so you would know what goes in and what goes out, or past

these two points?

Mr. VICKREY. Well, actually you take the Colonial system, we

batch a minimum of 75,000-barrel batches, but we have a wide range of

products from each shipper and they move their own products.

For instance, Gulf, which has three brands of gasoline, the Gulf

gasoline would be kept separate from the Texaco gasoline. So one

comes right after the other, and the line has to be monitored sufficiently that we know exactly where the beginning point is of the Gulf
26 THEFTS FROM INTERSTATE PIPELINES

gasoline and where it leaves off and some other shippers' gasoline goes

in. So it is carefully monitored, and we have got about a $2 million

supervisory system, these mechanical brains, that keep up with all

that.

But still, when you are dealing with large volumes like, say, 75,000

barrels, you can see that 100 gallons is not sufficient to make a big noticeable change in your metering.

Senator MONRONEY: I can understand that. It would be very

difficult, I would think, to get equipment that could measure down to,

that many gallons.

Mr. VICKREY. The engineers tell me you can't do it, not today..

Senator MONRONEY. Do you have any questions, Senator Dominick?

Senator DOMINICK. No.

Senator MONRONEY. You recommended that, or you mentioned

that the taps often occur at these pumping stations. Is the industry

working on any means to make these valves more tamperproof? For.

example, could they give an electrical signal or some kind of signal

that would notify a central office 50 miles distant what was going on, like a burglar alarm?

Mr. VICKREY. Well, we made a check after this theft was discovered.

We made a check of all of our unattended stations and took all sorts

of protective measures to see that there were no valves that could

be connected to and if there were, that you would detect it. But

I don't know how you would prevent someone from finding some

remote place on your pipeline and digging a hole and getting in there

and making a tap and covering it up. It would be absolutely im- possible for you to do that, unless your line flyer detected a change in the earth or something like that.

Senator MONRONEY. But they could cut into the line, or drill into the line, at any isolated point. They don't have to cut into the line at a pumping station or a place that is apt to be fenced off. Is that correct?

Mr. VICKREY. Yes, sir.

Senator MONRONEY. There are no valves that they can open, however, at a pumping station?

Mr. VICKREY. This was accidental. This valve had been put there for a special purpose and it happened to fit a regular hose that is connected to a gasoline pump. So it was quite easy. They just connected this and turned it on. That is not the usual situation.

But when you have that much products going in and out of all of these stations, there are ways to do it. And if someone has enough knowledge of pipelining, he can do it.

Senator MONRONEY. It could lead, if the practice grew, to where the tap could be left open and dump thousands of gallons of gas a day; could they not?

Mr. VICKREY. Yes, sir; it could be very dangerous. And one interesting thing to me is that on our system, for instance, where we batch different products, they wouldn't have any knowledge of what they were taking out. It might be gasoline, it might be kerosene, it might be aviation gasoline, and they might get some product that they would turn out to be aviation gasoline or it might be kerosene, and there is danger in the use of those products. It is hazardous. there.

Senator MONRONEY. Do you batch propane and butane, too?
THEFTS FROM INTERSTATE PIPELINES 27

Mr. VICKREY. No, sir; our line doesn't carry any LPG (liquefied

petroleum gases) products. I don't believe you can batch LPG

products through the same line you do regular petroleum products.

Mr. McComm-um'. Yes; you can. It is done.

Senator MONRONEY. This could be very dangerous, couldn't it?

Mr. MCCOLLOUGH. Yes.

Senator MONRONEY. Mr. Durand, I believe you have seen the comments of the Department of Justice and their recommendations for

some amendments. I would like your comment on those.

Mr. DURAND. Yes

'

Senator; we have seen those. We think that

with one exception the recommendations of the Deputy Attorney

General would improve and strengthen the bill, and we support the

recommendations made by the Department of Justice. The only

recommendation that 

Senator MONRONEY. Would you elaborate on those for the purpose

of the record? I think we need that for the record.

Mr. DURAND. Yes, sir; I will be happy to.

The first recommendation was that instead of inserting in section

659 merely the word "pipeline," the coverage could be made more

comprehensive by inserting the phrase "pipeline system." We agree

that that is true, and that that would be a very good improvement to

the bill. In other words, "pipeline"•might not cover, for example, a

scraper trap or some connected facility to the system, where it would

be possible to steal gasoline or oil, which should be covered, because

it is part of the interstate movement of the product. So we believe

that inserting "pipeline system" instead of "pipeline" is desirable.

Senator MONRONEY. And didn't they suggest also storage tanks?

Mr. DURAND. Yes, sir; the bill that the Senator introduced inserts

the word "tank," and they recommend "storage tank." That is the

only recommendation that gives us a problem. By narrowing down

the definition of "tank" to "storage tank," since this is a criminal

statute and very strictly construed, it could be concluded that the socalled working tanks were not covered by the word "tank." There

are a number of tanks that are merely bulges in the line, so to speak,

which are used to reduce pressure or to accumulate a certain amount

of product before it goes into the line, and they are called working

tanks in the industry. And if you say "storage tank" it might be

construed to mean you were excluding those. So, rather than 'storage tank," we would recommend that the phrase "tank or storage

facility" be substituted. I think it does what the Justice Department

has in mind, and it would also take care of the situation I just

described.

With that, Mr. Chairman, we would support 100 percent all of the

recommendations of the Department of Justice.

Senator MoNRONEY. Including the one that extends to any interstate pipeline the fact that robbery from it would be prima facie

evidence of the interstate character of the shipments of the property,

if the line did go across State lines?

Mr. DURAND. Yes, sir.

Senator MONRONEY. Would this allow you to include the gathering

lines, then?

Mr. DURAND. Yes, I think so.

Senator MONRONEY. Because they are engaged in interstate commerce, if they have connection with 

Mr. DURAND. They are part of the system.
28 THEFTS FROM INTERSTATE PIPELINES

Senator MONRONEY. They are part of the system.

Mr. DURAND. In that connection, Mr. Thomas reminds me we

should make an additional point, in the discussion of the words

"tank or storage facility." With your permission, I would like him

to enlarge on that point.

Senator MONRONEY. Yes.

Mr. THOMAS. Senator Monroney, many of the pipelines carrying

propane and butane, the liquified petroleum gases, store these products underground in salt formations or in shale formations where

they actually mine out the shale and place the product underground.

Mid-America has several of these facilities and stores millions of

barrels of propane and butane and natural gasoline underground in

storage facilities of this type.

We have one facility which happens to be away from one of our

terminals where we do store over 400,000 barrels of propane. That is

an unattended facility, although it is visited frequently by company

personnel.

We are quite anxious that the bill be made clear that it covers underground storage of this type. And it is not only our company that is

involved, but there are other pipelines who also carry propane and

butane.

Senator MONRONEY. Aren't those pretty well attended, though?

In other words, I am wondering how you are going to justify a storage

reservoir as interstate transportation.

Mr. THOMAS. One of these is just as much a part of our pipeline

system as the pipeline itself. And the reason for having these storage

facilities is to be able to handle the tremendous seasonal peak in the

wintertime. They are not located at distribution points necessarily;

they are simply points on the pipeline where for reasons of suitable

geology and so forth, because you can't put one of these underground

just wherever you happen to want it, it has to be located where the

formation is correct for the storage.

Senator MONRONEY. It has to be airtight?

Mr. THOMAS. It has to be liquid tight and it has to be related to

your pumping capacity. And these storages are as much a part of

Mid-America's pipeline system for the delivery of these products as is

the pipeline itself.

Senator MONRONEY. And they are not built adjacent to the sites

where they are used?

Mr. THOMAS. That is correct. And the language we propose is,

I hasten to add, broad enough to cover, I am not a lawyer, but

"storage facilities" will certainly cover underground storage caverns.

Senator MONRONEY. I see.

Do you have any further comment, Mr. Durand, or any of your

witnesses?

Mr. DURAND. No, sir. That concludes our case.

Senator MONRONEY. We appear to have no witnesses in opposition

to testify.

We do appreciate your bringing these men who have familiarity

with this problem to the committee for these hearings.

The committee will be adjourned and this bill will be considered

by the full committee.

Thank you very much.

(Whereupon, at 11:45 a.m., the committee was adjourned.)

0