CONSTRUCTION AND OPERATION OF PIPE LINE AND NAVIGABLE BARGE CHANNEL ACROSS FLORIDA THURSDAY, JULY 2, 1942 UNITED STATES SENATE, SUBCOMMITTEE ON RIVERS AND HARBORS Washington, D. C. The subcommittee met, pursuant to adjournment on July 1, 1942, in the hearing room of the Senate Committee on Commerce, the Capitol, at 10:30 a. m., Senator Josiah W. Bailey, chairman of the Committee on Commerce presiding. Present: Senators Bailey (presiding), Caraway (chairman of the Subcommittee on Rivers and Harbors), Clark of Missouri, Bilbo, Pepper, Lee, Hill, and Vandenberg. Present also: Senators Lucas, Andrews, and Maybank. Senator BAILEY (presiding). The subcommittee will come to order. It appears that we have four more witnesses. I hope that we can finish with their statements today. The representatives of the Office of the Petroleum Coordinator state that they may wish to be heard further on the Illinois matter. I shall take that up with them. Since I shall have to attend a meeting of a subcommittee of the Finance Committee this morning, I will ask Mrs. Caraway to take charge and to hear these witnesses. I will ask that when the adjournment is taken today, the hearings not be closed. We cannot close the matter right now. We shall want to hear from Admiral Land, of the Maritime Commission, and also from the Director of the Budget. There may also be representatives from other departments who wish to be heard. Senator CARAWAY (chairman of the subcommittee). We shall adjourn until the call of the committee. Senator BAILEY (presiding). That will be all right. I think it would be well to finish today with the witnesses who are here and then close the hearings so far as others than representatives of the departments are concerned. We have probably heard from everybody who hase evidenced any interest in this, but we will reopen the hearings if there is someone else who wishes to be heard. Mr. SWANN. I think that after the Petroleum Coordinator's representatives are heard we may want to speak for about 5 or 10 minutes more on the Illinois situation. Senator BAILEY. I thought that the Illinois situation was pretty well presented yesterday, and then you were going to present it to some extent this morning, too; were you not? Mr. SWANN. That is right. 74347-42- --11 157 Senator BAILEY. I think that that should end that. We will hear from the Petroleum Coordinator's representatives if they wish to come in order to inform the committee of their point of view. We will hear from the Illinois people by way of concluding that matter today. Has Senator Lucas been heard? Mr. SWANN. He has not been heard. Senator BAILEY. We could stop today at 12:30. We have now, I understand, five witnesses. Allowing 15 minutes to a witness, 75 minutes, or 1 hour and a quarter, would be taken. We shall proceed now to hear from Lieutenant Colonel Llewellyn, of the Resources Branch of the Service Supply, if he is here. I understand from the clerk that he has not come in yet. Mr. WALKER. Mr. Chairman, since Colonel Llewellyn is not here, I should like to present the next witness, Mr. Shinkle. Senator BAILEY. All right. STATEMENT OF ALDACE F. WALKER, VICE PRESIDENT, TRANSAMERICAN PIPE LINE CORPORATION Mr. WALKER. Mr. Chairman, my name is Aldace F. Walker. I am vice president of the Trans-American Pipe Line Corporation. We have been trying for a year to get permission to build this line through to Charleston and Savannah. I want to introduce Mr. Vincent G. Shinkle, a man who has been on this project longer than I have. He will go over with you in a very accurate way the engineering features of that part of the amendment. Senator BAILEY. We will hear Mr. Shinkle. Mr. WALKER. Thank you, Mr. Chairman. STATEMENT OF VINCENT G. SHINKLE, CONSULTING PETROLEUM ENGINEER, TRANS-AMERICAN PIPE LINE CORPORATION Mr. SHINKLE. Mr. Chairman, and members of the committee, I am grateful for this opportunity to come here in behalf of my client, the Trans-American Pipe Line Corporation, to discuss with you the elements of the pipe line that is considered in the amendment to the bill at present before you. This 600-mile pipe line from the Tinsley field in Mississippi to Savannah and/or Charleston is but one section of a larger project involving the construction of 1,050 miles of line extending from Wichita County, Tex., through to Savannah. From Wichita County, Tex., to and through the Tinsley field the line would traverse nearly 23 percent of the total petroleum resources of the United States. Senator VANDENBERG. That is, the total line? Mr. SHINKLE. That would be the total line. This first section, which is 600 miles in length, would go into Mississippi something like the drilling of an oil well. (Senator Caraway, chairman of the Subcommittee on Rivers and Harbors, assumed the chair.) Mr. SHINKLE. A pipe line in effect is a horizontal oil well. The fields you tap are the pay sands, and the terminal or discharge end is the surface. So, this line extending westward, we will say, from Charleston and Savannah-from the coast-would tap the first pay sand in the Tinsley field. From the best information that we are able to obtain, the State of Mississippi has interesting potentialities in the way of becoming a greater oil-producing State. It is believed that there are deeper and more prolific sands yet to be tapped. However, we now have the Tinsley field, which has a production of approximately 90,000 barrels a day. Not finding sufficient oil ultimately in the Tinsley field, the logical thing to do would be to extend the line westward. I have here a map which will show what is proposed. Senator VANDENBERG. Has this proposal been presented to the Oil Coordinator? Mr. SHINKLE. Let me give a little history of it. On the 10th of July 1941, the project in its entirety was presented to the Office of the Petroleum Coordinator. It has been before other bureaus, too. action has been taken. No I realize that there are laws now which would permit and authorize construction of pipe lines, but the laws are ineffective until directives are issued, and the proper directives have not been issued. This line was proposed as the quickest, shortest, and cheapest route to tap the prolific producing areas and bring their oil to the Atlantic coast. Senator VANDENBERG. Your argument is with the President; it is not. with us; is not that true? Mr. SHINKLE. He is the Commander in Chief. Senator VANDENBERG. He has the power to have your pipe line built, too, if he wants to, has he not? Mr. SHINKLE. I understand so under the Coal Act. This is the line extending from Wichita County, Tex., through to Savannah, but the first 600 miles to the Tinsley field would come here [indicating on map]. It is below the Appalachian Mountains, and there is nice terrain for construction there, with respect to speed. Then, extending westward, it will tap the fields in Arkansas, northern Louisiana, east Texas, and on through there. That is for future consideration, when and as oil is needed-and we understand oil is needed. Senator VANDENBERG. If the project is going into the bill at all, why should it not go all the way across? Mr. SHINKLE. It should; but it is not in the amendment that way. If the line had been authorized and built last year, it would by now have delivered to the Atlantic coast more than 13,000,000 barrels of oil. The line is proposed as a 1234-inch line with 15 pumping stations and having an estimated capacity of 70,000 barrels delivery daily on the Atlantic coast. That is equivalent to the operation of 15 average tankers between the Gulf coast and the Atlantic coast, or 311 tank cars daily. It has been viewed from the standpoint of strategy, too, because, as we well know, our two great refining centers, mainly the general New York area and the Philadelphia area, would be the first targets for sabotage and attack in the event the war moves nearer our shores-and the war is surely moving nearer our shores. I recall that in England the first attack on the London zone was upon the big refinery along the Thames. It was not long before there were no refineries operating in England and no crude oil was being taken to England. I had a small part as an engineer in England's preparedness work, so I know the situation just a little bit. It does not seem to be good strategy or prudent in time of war not to decentralize to some extent the lines of supply and the supplies. While this line would have a capacity of but 70,000 barrels, it would be a step in that direction; and also, as the line continued westward, it would be able, in the event of the crippling of our refining capacity on the east coast, to bring enough fuel through from the inland refineries and thus become a valuable line of supply for the Navy. As regards steel, we have kept in close touch on that material. I have here a small map which shows the relation of the line to our outlying naval and air bases all through here [indicating]. We are told that the Navy will require during the next 12 months more than 15,000,000 barrels of fuel in the area south of Norfolk. Senator VANDENBERG. I notice that your maps are made on the basis of the line running straight through to Wichita Falls. Mr. SHINKLE. Yes, sir. Senator VANDENBERG. You really would not have proposed this line at all just to the Tinsley field, would you? Mr. SHINKLE. No; I think that it is but one step. Senator VANDENBERG. It is not justified if it goes just to the Tinsley field? Mr. SHINKLE. No; not if we are going to rest there; I think that that is only the first step. Then, not finding sufficient oil there, continuing westward would be the logical development. After all, in time of emergency, speed and also conservation of capital are essential. Those things all enter into the picture, because when the credit is exhausted we stop fighting. This line, with its easy operating characteristics, due at least to favorable climatic conditions, can be built in 90 days after pipe and machinery are available. It is merely a matter of organization and getting the contractor's equipment there. It is a job that can be done very quickly. Senator VANDENBERG. What is the basis of Mr. Eastman's objection to this line? Mr. SHINKLE. As I understood it, there were two. The first was that he had been advised that steel was not available for the pipe. Second, neither the Army nor the Navy had signified a desire for it, although we had the favorable report that we could not enter in evidence from the Navy Department. Mr. Eastman also went on to say that he was placing this project, with others, before Mr. Shields, a pipe-line engineer for the Interstate Commerce Commission, for further study. As I understand it, the study has not been completed. As regards steel, I have been in a most favorable position to know what is going on in the steel and pipe mills. In January, when we were told that there was no steel pipe, I learned that the pipe mills were not running to capacity-nor were the blast furnaces and that they were accepting orders for March and April delivery. That was in January. But the story continued that there was no steel. On March 16 I learned that tubular goods were being produced in quantities greater than ever before. Three weeks ago I made another survey and was told that at least two mills were rolling rounds and billets and were stocking them. Out of the rounds you make your seamless steel tubing; out of the billets you roll your plate to make the lap-weld and the electric-weld pipe. That was 3 weeks ago. So, really, the ability to obtain steels for this rests on a word from the proper source. It is there when they are able to do it. Steel that goes into pipe is of a different chemical composition than that which goes into plate for ships, because pipe requires a higher tensile strength than that for ship plate. You might use pipe plate to build ships, but you would not reverse that. That is the situation, very briefly. I have asked that I might follow my appearance here by submitting a memorandum confirming the whole thing for the record, and Senator Bailey said that I might do that. It has been said that many words lead to confusion. While I do not want to take too much of your time by talking, if there are some questions that you wish to ask, I shall be happy to answer them. Senator VANDENBERG. I still do not think you have answered my question as to whether or not this has been presented to the Oil Coordinator and what the net result is. Mr. WALKER. Mr. Shinkle, would you defer to me for the answer to that question? Mr. SHINKLE. Certainly. Mr. WALKER. You do not mind, Senator? Senator VANDENBERG. No; certainly not. Mr. WALKER. We presented this matter to Mr. Ickes on the 10th of July last year-1941. Senator VANDENBERG. That is, for the line all the way through to Wichita Falls? Mr. WALKER. For the line all the way through to Wichita Falls; yes, sir. We received an acknowledgment to the effect that we existed as an entity at that time. Senator VANDENBERG. That was a concession. Mr. WALKER. We were then taken by Mr. Dempsey, who was Under Secretary of the Interior, and introduced to Mr. Davies, to whom we presented further information at another conference on this matter. From there we went through a series of attempts of trying to get a hearing of some kind-and an open hearing if possible-where something would be written for the record. We were not successful at all in that. Finally, when Senator Maloney called his subcommittee to meet on the gasoline shortage, we appeared before that subcommittee. There were three of us-Mr. Shinkle, Mr. Stanley Glines, and myself. At that time we offered testimony which, Senators, I read the other day. It sounds more like a prophecy than testimony. In that testimony, which I am sure you would be pleased to read, we went ahead and prophesied sinkings on the Atlantic coast and the need for this pipe line and what would happen. That is all a matter of record. After that was over we had some assurance that there would be some cooperation with the Office of the Petroleum Coordinator. We went there and were introduced to two or three engineers. The first was Mr. Henry Gilbert, who had been associated with one of the Standard companies. We talked with him about pipe, but we finally discovered that he was not a pipe-line engineer; he was a barge expert. Then we talked with another engineer, Mr. Ramsey Flynn, who had been with the Standard of Louisiana. Mr. Flynn examined this project, and we know that he favored it. But 2 weeks after he favored |