The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1905-07-18
STANDARD TOO Low.
Oil Producers Not Rushing Heavy
Grades to Their Market

independence, Kan, July 1S.-The
fact that the Standard Oil company is
now running all grades of oil through
the pipe line creates no comment from
producers The announcement was
made a month ago that heavy oil was
to be taken, but at the price of Is
cents a barrel there are not very many
producers willing to deliver oil to the
pipe line. There is no money in the
oil business when the product is sold
at rs cents a barrel The apparent
motive of the Standard is to accumu-
late a great supply of heavy oil in its
tanks and then control the fuel oil
market. So long as there was no de-
mand for fuel oil the Standard refused
to buy that grade and tore out the
pipe line connections.
The producers went ahead and de-
veloped a market for fuel oil through
out the entire western half of the
state They are making long time con-
tracts for oil at prices far in advance
of those the Standard is paying. The
shipments of fuel oil from the Kansas
field to the mills and factories in EN-
poria, Wichita, Hutchinson, Salina,
Great Bend, Hays City, and other
points now amount to more than 500
barrels a day and the demand is in
creasing constantly. Three firms in
Chanute have made a contract to de-
liver $4,000 barrels of oil in the next
|12 months. The Santa Fe and the St.
Louis & San Francisco railroad COM
panies both are experimenting with
oil as fuel on a large scale. The de-
mand from the Frisco system alone
Will be for millions of barrels. The
Texas system of the Santa Fe, which
has been using oil for five years, con-
sumes more than four million barrels
annually. The Pacific system uses
more than five million barrels. From
700 to 5000 barrels are consumed on
thra shing machines in Kansas.
The Standard keeps track of all this.
When a test of oil was being made in a
packing plant in Wichita recently the
Standard sent a man from New York
to observe the test and report on it. 1t
also offered a. car load of oil free to be
used in the test. The Standards agents
throughout the west argue that the re-
sidium sold by the Sugar Creek and
Neodesha refineries is better for fuel
purposes than crude oil Even the in
surance companies have been appealed
to for restrictions which will enable the
Standard to sell its fuel oil and shut
out the crude oil of the producer.
If the producers of heavy oil accept
the Standards price, twenty-five cents a
barrel, it will enable the Standard to
accumulate millions of barrels of this
grade of oil, make the profit out of the
refining and then put it on the market
at prices which cannot be met. This
the producers have considered, and, in
spite OF statements to the contrary
there has been no great rush to have
pipeline connections restored. Al
Niotaze, Cherryvale, Chanute and Pa
ola refineries are getting ready to take
care of the oil and few if any applica-
tions have been made from those dis
tricts. A Standard company official
said today the number of applications
from the Chanute- Humboldt district
would not amount to half a dozen.
I'VE thought they were anxious fol
US to get the oil,'' he said, but when
we went to the producers and told them
we were ready to restore the connec'
We have been building new tanks ano
new pipelines to take care of this heavy
oil and now that we are ready there Is
little or no heavy oil for us to handle.
The prospect for the starting of The
independent refineries has caused a dis
tinctly better feeling throughout the
field. Most of the refneries will be
marketing oil in ninety days. AL
of the companies are storing oil and this
makes a. big hole in the available sup
ply. For the first time in many months
there is talk of starting the drills again
The most conservative operators believe
that the present daily capacity of the
wells in the Kansas-Territory field will
not be equal to the demand in the flu
ture. OF course, the influence of the
present enormous supply of oil in Stan
dard tanks at various places in the
field, nearly million barrels, is apprec-
lated. but when the Whiting line is run
ming full time and this flood of oil
starts east conditions will change.