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

OUT OF OUR GROWING PAINS

Montana is in the transitional
STAGE says our recent Information
Bulletin No. 473C, issued to menu
bers OF this organization. cit has
never I'm the past had enough oil TO
justify large refinery expansion and
accordingly the major operators laid
their plans to supply the state with
a major portion OF it's gasoline from
Wyoming. California and the Mid
Continent. The major companies
have chosen to make their money
out of the sale OF their crude I'm
Montana (marketed in the form of
refined prOducts) rather than from
the development of Montana crude.''
This is an opening paragraph from a
must not discussion. Heretofore it
has been sacriligious to discuss the gaso-
line price structure So powerful has
been the hold of importing companies
on the market that they were able to
pronounce life or death on the strug-
CLING MoI1tana refineT The gasoline
price structure in Montana was more
essential to the survival of the local re-
finers than to the maintenance Of profits
to the importers.
1t is not unusual for a state to export
its crude and import gasoline from other
states, so it was only natural for Mon
tana to follow this plan after Cat Creek
II.
gravity crude from Cat Greek was ship
ped in tank cars to Whiting, Indiana
for refining. while other trains carried
gasoline back into Montana from WyOm-
ing and Midcontinent refineries. 1t
would have been much more logical, it
now seems, for the major companies to
hove built a refinery n Montana and
sold Cat Greek crude to the people Of
this state in the form of gasoline and
distillates The reason this was NOT
done was the fear that this 600-acre oil
field would not produce enough oil to
justify an investment in a plant large
enough to handle all of the production.
However. two plants were built, by
Independents. One of the two went into
the hands of Continental Oil Co.. which
has been the market leader in the state
almost from the first The Continental
performed a great service for the people
of Montana in the early days, providing
bulk plants and filling stations at dis
tant points throughout the state: in
many places where the volume of bust
ness scarcely justified the investment.
After taking over the Lewistown Oil &
Refining Co. plant. Continental began
using the Cat Creek production in the
Lewistown plant. There was not enough
Cat Creek crude available to supply a
second plant. so the AFRO Oil & Refining
Co. was forced to look for crude else
where.
Then came the development of Kelvin
Sunburst and here again no major
would build a refinery. A market for
crude was found in Canada, which had
previously been shipping crude from
Wyoming and the Midcontinent. So as
long as the Canadian market absorbed the
most of the crude. the major companies
continued TO ship gasoline in from the
outside. History repeated when Cut
Bank field came in only this time the
Cm Rank crude took away the Canadian
market of Kevin-Sunburst
When Kevin-sunburst was at peak pro-
duction, the market was glutted with oil
beyond the limited needs Of Canada, and
the price dropped to so cents a barrel.
Those were gusher days and the opera