Montana’s Black Gold – Yellowstone Pipeline & Missoula’s Oil Terminal – 1954
Montana’s Black Gold – Yellowstone Pipeline & Missoula’s Oil Terminal – 1954
The Carter Oil Company opened its ¼ million-dollar Missoula Oil Terminal in 1954. Oil companies built a 537-mile, 10-inch pipeline from Billings to Spokane, Washington. The pipeline yearly carried 16 million gallons of oil products from Laurel and Billings to terminals in Bozeman, Helena, Missoula and Spokane. The Missoula terminal had a storage capacity of 3,900,000 gallons. The pipeline carried premium and regular gasoline, fuel oil, and diesel fuel. Described as the 20-million-dollar ‘Yellowstone Pipeline’ it was owned by a combination of Standard Oil Company of New Jersey, Continental Oil Co., Union Oil of California, and other smaller investors. Carter Oil was an affiliate of Standard Oil Company of New Jersey.
The pipeline was capable of holding 12,000,000 gallons of fuel and could deliver 2,500,000 gallons a day. Moving the products from Billings to Spokane took 15 days, traveling about one and a half miles per hour. The first delivery to Missoula was 336,000 gallons of diesel fuel.
Construction of the line was particularly difficult at McDonald Pass and Thompson Pass where winter conditions could force the line to close for a time.
The line was built by Continental Pipeline Co., a subsidiary of Continental Oil Co., using four major contractors. Eastern Pipeline Co. installed the line between Clinton and Perma. Crews working out of Missoula involved 132 employees. Eight major river crossings between Billings and Spokane had an average span of 800 feet.
W. G. Tremper[1], the Missoula agent for Continental Oil Company and Conoco products, noted that products from the pipeline would be distributed from Missoula by a number of transport companies and would serve a wide area of Western Montana. By 1954 Continental spent nearly $20,000,000 investing in Montana Oil production and distribution. This included nearly $10,000,000 on the Billings refinery in 1949 and nearly 3 million dollars invested in bulk plants and Montana service stations. Continental Company had leases for drilling on 1.5 million acres in Montana and an interest in 69 producing wells in the state.
In 1954 John J. Marchi, attorney for the Montana Oil and Gas Commission, said at the Florence Hotel that the petroleum industry spent about $100 million per year in Montana. That figure did not include the pipeline expenses, but represented about $30 million dollars on oil and gas leases paid to land owners, $30 million for well drilling, and $15 million on geophysical prospecting. The new Commission came about in 1951 directed with the task of regulating the oil and gas industry in Montana. Marchi stated that the first regulatory legislation in Montana occurred in 1917 following the discovery of the Elk Basin field on the Montana-Wyoming border in 1915. By 1954 five major oil companies were reportedly interested in exploring 120,00 acres of Blackfoot Reservation lands that were soon to be offered by leases.
Missoula attorney William T. Boone represented the Yellowstone Pipeline Company in discussions of state and county taxes. He was also a chairman of the Legislative Committee of the Montana School Boards Association and a chairman of local Missoula high school board of trustees. In 1952 Boone discussed the impact of taxes derived from oil development in Montana at a PTA meeting in Missoula. He stated that “a problem in the oil legislation is the fact that oil leases are for 20 years, and big oil companies won’t take some of them because of the heavy investment needed to sink the wells.” He also averred that “tax money from Eastern Montana oil development would provide more money for school operation and construction without a general increase in taxes or special levies . . .” He noted that pay for superintendents of schools was inadequate and morale was low because of it. He suggested the need for “better liaison between PTAs and the Montana School Boards Association in order to further proposed legislation.” At a PTA meeting at Willard School in 1953, where Boone was speaker, two films were shown, “Story of Oil” and “Oil from the Earth.” These films were shown throughout the country.
In 1955 the dean of Montana State University School of Law published a 556-page book on oil and gas law. A short review published in the Missoulian that year stated that his book was written “chiefly for lawyers” and “useful to oil company executives, legal department personnel, new employes, and especially to the land owner who wants to know about his rights after he has leased the land . . . Federal and state taxation of income from oil operations are considered in detail, and financing methods common to the oil industry are set forth.” The article also noted that Sullivan was a member of the Legal Committee of the Interstate Oil Compact Commission representing Indiana and Montana since 1952. “He is a former research associate of Warren Petroleum Corp., Tulsa, Okla., and during the summer of 1952 served as an oil and gas legal consultant with a law firm in Bismarck, N. D.”
Montana’s oil industry during the Yellowstone pipeline era may have been represented in ways that were not clearly understood.