The Washington times., 1916-02-28
Reduction in Pipe Line Charges
and Minimum Shipments Are
Suggested.
INDEPENDENTS EXCLUDED
Standard Oil Has Great hdvan-
tage Over Small Producers,
Is Finding.

Radical reduction in pipe line charges
and minimum shipment requirements
are necessary to reduce the retail price
OF oil to the consuming public.
Independent oil producers In the great
midcontinent field have been practically
excluded from pipe line transportation
by high rates and an unreasonable
minimum of shipments accepted.
Standard OIL has a great advantage
through the pipe lines II owns or con-
trolls. and small producers cannot COM
pete with It.
The pipe line companies would make
enormous profits II they charged their
own shipments at the rates they charge
independents.
These are, in effect. the findings OF
the Federal Trade Commission with
respect to the petroleum pipe lines OF
the midcontinent fields in Oklahoma and
Kansas.
Report Sent To Congress.
After an exhaustive inquiry the COM
mission today submitted a report TO
Congress in response to a Senate reso-
luton. 1t points out that though Con-
gress has declared pipe lines common
carriers, little use has been made OF
them as such because of the rates
charged and the fact that the pipe line
companies will not take shipments tnat
aggregate less than 5000 barrels. a
larger quantity than the independent
oil companies can ship.
The Standard Oil Company Is the most
adYantageously placed OF all of the big
companies producing petroleum and
the report The Standard owns the
Prairie line running from the mid
continent field to Chicago, and thence
east, and the Oklahoma Louisiana line,
running to the Gulf at Baton Rouge.
In addition its capitalists control one
other line, the Magnolia, summing south
to Texas points. There are but two
other lines tapping the Oklahoma Kan
sas fields, the Gulf. and the Texas.
Summary of Report.
Summarizing his report, the commits
sion says:
1.-THE dominant position of the mid
continent field makes the facts develop
ed in this report of vital Importance to
the entire country.
1.-THE fixed investment in pipe lines is
extensive and corresponds closely with
the actual cost OF such property.
Pipe line construction in the mid
continent field has followed. instead of
preceded, crude oil production. and such
investment is comparatively secure.
the cost of pipe line transportation,
which is very low, and pipe line tariff
rates, while the independent shippers
cannot use railroads because their rates
are still higher.
THE pipe line companies require large
minimum shipments, which make II inn
practicable for small producers or re-
liners to ship crude oil by pipe line.
1.-THE price of crude oil delivered at
the refneries Is to large extent made
up of the transportation charge.
1.-THE cost of pipe line construction is
so great that small concerns can not
build lines from the mid continent field
to the large consuming and distributing
markets.
Lower pipe line rates and smaller
minimum shipments are necessary to
enable small concerns to compete with
large refneries affiliated with pipe line
companies.
Unreasonable and equitable conditions
OF shipment by pipe line would tend to
a greater equality In the prices OF mid
continent and Appalachian crude oil and
in the prices of refined products in diff
ferent markets"
No Definite Recommendation.
The commission makes no definite
recommendation, except to say:
"The conclusion Is evident that the
prosperity. and perhaps even the exist
ence. of many small concerns depend
on lower pipe line rates and rea-
sonable minimum shipments. Whether
the general level of prices for refined
products would be reduced thereby
would depend chiefly on the prices OF