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Texas Eastern: Still Looking Good at 65

By Craig Sprowl, Coordinator, Communication Services at Spectra Energy

This is the first of a series of historical articles about the Spectra Energy legacy. Watch for future installments that will include Algonquin, Panhandle Eastern, Union Gas, Westcoast Energy, and other Spectra Energy operations and assets.
 
Texas Eastern, an important part of Spectra Energy’s legacy and continuing operations, is celebrating its 65th anniversary in 2012.  As one of the largest natural gas infrastructure companies in North America, Spectra Energy’s roots reach back over 100 years – to the formation of Union Gas, Ltd.  – and encompass the proud, 65-year history of Texas Eastern.

Texas Eastern formed in 1947 with the purchase of two wartime-built pipelines, the Big Inch and the Little Big Inch, from the U.S. government. With numerous improvements and modifications over time, the pipelines are still in use and are a vital part of Spectra Energy. Today, the Texas Eastern Transmission system ranks fourth among the nation’s gas pipelines in system capacity.
 
Even before the United States became officially involved in World War II, the government under President Franklin D. Roosevelt was concerned about the safety of U.S. crude oil transportation. The oil from Texas was moved to the Northeast mainly by oil tanker. After the United States became involved in the war, an increasing number of ships were being lost to German submarines. Consequently, Secretary of the Interior Harold L. Ickes advocated the construction of a cross-country pipeline to move the oil from Texas to the East. Ickes’ idea became reality in 1942.

The Inch Pipelines are Built
 
Two pipelines would be built, a 24-inch diameter line, known as the Big Inch, and a 20-inch line, known as the Little Big Inch. War Emergency Pipelines, Inc., a new nonprofit company, was formed at the request of the government and staffed by experienced men from a group of 11 oil companies.  Work on the Big Inch and Little Big Inch lines began in August 1942, and both were finished by December 1943.  Within 18 months, two major crude oil pipelines had been built that spanned the country.  Construction crews built the pipelines in record time, despite having to deal with all types of terrain and often harsh weather.

After the end of World War II, the U.S. government looked to dispose of the two “Inch” pipelines. Shipping had returned to normal, and the government wanted to unload the assets it had accumulated during wartime. So, the two pipelines were put up for bid. Two men who had served in the Petroleum Administration for War (PAW), E. Holley Poe and Everette DeGolyer, headed a group of men interested in purchasing the pipelines. DeGolyer was a well-known geophysicist who had already established a name for himself in the petrochemical industry. Others who joined the group included Charles Francis, a partner in the prestigious Houston law firm of Vinson, Elkins, Weems and Francis, and Reginald Hargrove, vice president of United Gas Corporation, which was headquartered in Shreveport, La. Later, George and Herman Brown (of Brown and Root) would join the group, bringing great financial resources, engineering experience, political connections, and forceful leadership. George Brown would serve as Texas Eastern’s chairman for more than 20 years.
 
Hearings were held on how the government should dispose of the pipelines. Oil, rail and coal companies had differing views on the best use of the lines. Poe thought that the pipelines would be ideal for transporting natural gas from the South to the Northeast, where he believed a very large gas market existed.
 
Texas Eastern Begins with Purchase of the Inch Lines
 
On January 30, 1947, Texas Eastern Transmission Corporation was established. On February 8, the new company submitted a bid of $143,127,000 to the War Assets Administration for the Big Inch and Little Big Inch pipelines. Texas Eastern’s bid, the highest of 13 submitted, was accepted. Texas Eastern purchased 3,182 miles of pipeline, extending from Texas to the East Coast, which could transport natural gas, petroleum or petroleum products. The areas served by the system were among the greatest potential natural gas markets in the country. Shreveport became the headquarters for the new company, and Reginald Hargrove was appointed president.

Texas Eastern began the task of expanding the capacity of the two pipelines and improving their efficiency. First, the pipelines had to be converted to transport natural gas instead of oil. Baxter Goodrich, who came from United Gas, became Texas Eastern’s chief engineer and would convert the pipelines. Originally, the gas moved through the pipelines under its own pressure, and compressor stations had to be built. In the first 18 months of operation, 21 compressor stations were constructed along the two lines. Brown and Root built all of Texas Eastern’s new compressors, and they became the industry standard. With new compressors, Texas Eastern dramatically increased capacity.
 
Texas Eastern would continue to expand the pipeline system. Engineers developed new equipment and techniques. In 10 years, the system more than doubled its pipeline mileage. In 1951, Texas Eastern built a new pipeline named after its point of origin at Kosciusko, Mississippi: the 791-mile, 30-inch diameter line extended to Connellsville, Pennsylvania. At the northern end of the Kosciusko pipeline, Texas Eastern developed a new underground storage facility at Oakford Field in Pennsylvania. With the new facility, surplus gas could be stored during the summer months when demand was lower and released to the customer during peak winter months.
 
Texas Eastern Transmission proved itself to be an extremely successful company from the time of its founding. Later, the company would embark on new expansions, including forming the Algonquin Partnership to enter the New England natural gas market. The company moved its headquarters to Houston in the early 1960s. Today, the Texas Eastern system comprises more than 9,200 miles of pipeline, about three times more than when the company was formed 65 years ago.
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