Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1938-05-07

tors were glad to sell their oil at any
price. At that critical moment one of
the Independent producers built a top
ping plant at Sunburst, arranging a fuel
oil contract with the Great Northern.
He quickly absorbed the excess production
in the field and Immediately the Canad-
ian buyers, who had been capitalizing
the situation, came back into the market
and soon forced the Sunburst refinery
to pay a premium above the posted
field price. The price of crude contin-
ued to mount and the price of gasoline
remained unchanged; perhaps it went
down. The price of crude had no rela-
ton to the price of gasoline for so per
cent of the states gasoline was being
imported Two or three refineries which
had started up were caught in this jam
and were crushed out of existence. The
Sunburst refinery. known as International
Refining Co., was sold to California
Petroleum corporation. which weathered
the storm until that corporation was TAX
en- over by The Texas company.
The Texas company expanded and
modernized the plant until it was ma
tionally rated as one of the three finest
refinerieS in the United States. Then.
for the first time, Montana-made gasoline
began making inroads into the importers
market. although Texas company was
itself an importer
a gallon of gasoline from Casper, Wyo.,
to Great Falls. If the Wyoming refiner
is to get normal price for his gasoline
1t is apparent that he must get more
money for imported gasoline, than for
gasoline which can be delivered to the
service station for less than 5h cents
per gallon. Likewise, the Midcontinent
refiner must pay over cents to ship
a gallon of gasoline into Great Falls
So it is very apparent how the gaso-
line price structure was started and main
tanned, 1t is also apparent how the
Montana refining industry has had such
great difficulty in getting started SO
long as the crude was controlled, by
expectation, no Independent refiner
could get foothold So long as the
price structure was dominated by inn
pOrters, it could be used to hamstring
the Independent refiners.
Then came the development of Turner
Valley. A few foresighted individuals
saw it coming before Canadian buyers
stopped buying Montana crude, but
most producers were left flat footed"
when the announcement came 1t left
north Montana crude without a market.
There was no place for it to CO. no
Canadian market. no Whiting, Indiana,
market nor elsewhere.
While this was appalling to the In
dependent operators, it was far more
serious to the major operators who have
heretofore commanded this market For
the first time it was entirely out of
control. There was no institution able
to cope with the situation
So it was that operators began work
ing out their own salvation The estab-
lishment of a refinery at Cut Bank
by far-sighted operator took 1000
barrels of daily production out of the
market just before the Canadian buyers
departed, but that was not enough There
was still from 1000 to 5000 barrels of
excess production to be absorbed Pro
dncers began to face the situation and
group by group they have backed re-
finery projects with their crude reserves;
insurnF the refinery investor that they
will not rush off and sell their crude to
the first man who offers a 10-cent