Business innovates, but government creates the conditions that make innovation possible. Consider the railroads, which were financed by federal land grants; international trade, made possible through harbors opened by federal dredging and marked by federally built lighthouses; shipping on federally funded interstates; and the Internet, which was originally a military project.
Here in Pennsylvania—the land of coal and birthplace of the oil industry—a majority of residents heat their homes with natural gas. Why? Because, in the early days of World War II, U.S. taxpayers built a 1,400-mile oil pipeline from East Texas to Phoenixville, where it branched out to refineries in New York and Delaware County. Intended to protect the nation’s oil supply from German submarines, the so-called Big Inch line was later sold and converted to natural gas transmission by private investors who saw it as a tool to market what had been a waste product.
“When the final offers were opened (in 1947), the winner was a Houston group [with the goal of] bringing Texas natural gas to the cities of the Northeast,” wrote oil industry historian Bryan Burrough. “Within weeks, utilities in Philadelphia, New York and Boston announced widespread conversions to natural gas.”
Big Inch cost $95 million, and was sold for $143 million. The purchasers, doing business as Texas Eastern Transmission Co., were Herman and George Brown, founders of the engineering firm, Brown & Root, later a division of Halliburton. During the Depression, the Browns had been bitter critics of federal spending. But their federally built pipeline brought their firm billions.
In Chester County, oil pipelines had been regarded with suspicion since the 1870s, when Standard Oil bribed the Pennsylvania legislature to preserve its monopoly. Investigative journalist Henry Lloyd Demarest remarked in 1899 that “Standard Oil has done everything with the Pennsylvania legislature except to refine it.”
The first crude, wooden pipelines were laid in 1863 in the western Pennsylvania oil fields. Their initial purpose was to help small, independent oil drillers break the monopoly of the teamsters, who charged extortionate rates to move barrels by wagon to the nearest railroad. As the oil industry outgrew its chaotic early days, however, it consolidated into the hands of a few well-capitalized entrepreneurs. One was Cleveland, Ohio, refiner John D. Rockefeller, who founded Standard in 1870 and spent the next decade acquiring its competitors.
By 1879, Standard controlled 90 percent of the country’s refining capacity. It also controlled the pipelines through which Pennsylvania crude was gathered. The lines still extended only to the railroad lines, but Rockefeller controlled so much oil that he could dictate terms to the railroads, and prices to the small independent producers that used his pipelines. “Just when Rockefeller thought he had everything virtually tied up, Pennsylvania producers made one last effort to break out of Standard’s suffocating embrace,” wrote oil industry historian Daniel Yergin.
Incorporating as Tidewater Pipeline, the producers banded together to lay a 110-mile pipeline from Coryville, in the oil region, to Williamsport. The oil was carried east to market on the Reading Railroad. For this, the rival Pennsylvania Railroad was allied with Standard Oil.
When Tidewater later began to extend its pipeline east toward Philadelphia, Standard retaliated with public relations tactics. First, they tried to frighten farmers with the supposed dangers of oil pipelines to agriculture. Writing anonymously in a Harrisburg newspaper, one Standard agent claimed, “A pipeline upon a farm is a constant nuisance, liable to burst at any time and not only destroy vegetation but the fertility of the soil for years to come.”
More important, the Pennsylvania Railroad (Standard’s ally) refused to let Tidewater cross its tracks. A breakthrough came in Chester County, as described years later in the Daily Local News:
“Colonel Porter and another oil pipe man quietly came to West Chester and registered under assumed names at the Green Tree [Hotel]. They hired a carriage and took a drive into the country ostensibly for the purpose of horse dealing.”
Near Downingtown, the oil men came across a farm that featured a culvert under the railroad tracks so cattle could wander freely from one field to the next. They bought the farm on the spot and ran their pipe through the culvert. And so, Tidewater reached the Delaware River.
Standard was only temporarily defeated. Within a couple of years, it won partial control of Tidewater and re-established its monopoly. That lasted until 1911, when anti-trust litigation broke Standard up into 11 separate entities. Oil transmission was handled piecemeal until 1942.
At the beginning of World War II, the United States was an oil exporter, and most U.S. oil came out of the ground in Texas. But without large, long-distance pipelines, 90 percent reached East Coast refineries by tanker ships, which loaded on the Gulf Coast and sailed around Florida.
A German submarine sank the first U.S. tanker in January 1942, only a month after Pearl Harbor. Over the following five months, subs sank 233 more tankers. The United States lost a full quarter of its oil tankers to German U-boats that year. Deliveries to the East Coast fell by 90 percent. Officials calculated that 7,000 railroad tank cars—cars that didn’t exist—would be needed to replace the oil going into the ocean each day.
The resulting shortage was a particular problem for Britain and the Soviet Union, which relied on U.S. oil to supply their war machines. Rationing was imposed on the Northeastern states in May.
Harold Ickes, FDR’s secretary of the interior, had foreseen this possibility. He’d wanted to build a pipeline in 1940, but oil producers resisted federal involvement in their industry. Ickes’ proposal was rejected early in 1941, for the official reason that it would use too much steel. When war came, the plan was resurrected.
There would actually be two pipelines: the Big Inch for oil; the Little Inch for oil products like kerosene. Both would dwarf anything in existence. Most U.S. pipelines were 8 inches in diameter or smaller. The Big Inch would be 24 inches in diameter, the Little Inch 20 inches.
“It was a monumental task,” wrote Burrough. “Thousands of miles of American countryside had to be surveyed and cleared. Tunnels had to be bored beneath the Mississippi and 200 other rivers, streams and lakes. Nearly 3,000 miles of 4-foot-deep trenches had to be dug.” Massive trucks delivered 40-foot sections of pipe to an army of 15,000 roughnecks who, on a good day, could complete nine miles of the line.
Washington funded an independent corporation, War Emergency Pipelines, which, in turn, contracted with 13 major oil companies to get the line built. The project was widely reported, usually in gushing patriotic prose that emphasized U.S. technology and workers.
Federal officials began contacting local landowners in December 1942. Some undoubtedly remembered the terrible things that Standard Oil had whispered about pipelines more than half a century earlier. But there was a war on, so no one really listened. A condemnation petition filed Dec. 31, 1942, in U.S. District Court for right-of-way between Honeybrook and Collegeville was granted two days later.
The Chester County section was finished by March 1943 on a straight line that ran through Schuylkill, Charlestown, East and West Vincent, Upper Uwchlan, Wallace and Honeybrook townships. Ickes came to town in July 1943 for the dedication. Standing on a flag-draped platform before a thousand spectators near Eagle, he watched as welders sealed the last joint. Then, Ickes warned the crowd not to expect an end to rationing any time soon.
Big Inch, he noted, would deliver 300,000 barrels of oil daily to Eastern refineries, but no one knew how much would be necessary to win the war. And the United States had to supply its allies, too.
Historians do credit U.S. oil for its role in Allied victory. Between 1941 and 1945, the Axis powers produced 276 million barrels of oil; Texas alone produced 500 million. Hitler’s December 1944 offensive, the Battle of the Bulge, failed when his forces ran out of gasoline.
Unfortunately, the war also left Texas nearly dry, at least compared to rich new oil deposits just then being discovered in the Persian Gulf. But the state was rich in natural gas, and the big pipeline the oil men hadn’t wanted to build provided a perfect means to sell it.
And just in time.