OIL & GAS: The Four-Cornered Can

OIL & GAS

Barely three years ago the Southwest's Four Corners area was a 15,000-sq.-mi. wasteland inhabited by Indians, mostly Navajo, whose sheep battled the jackrabbits for meager forage. Last week the mesa-dotted region, where the boundaries of Utah, New Mexico, Arizona and Colorado meet, was the hottest petroleum area in the U.S. Each day El Paso Natural Gas Co. piped more than 600 million cu. ft. of natural gas to the Los Angeles market from 3,000 wells; other companies piped huge amounts to the Pacific Northwest, Santa Fe, Albuquerque and Los Alamos. Oil company pipelines sent 120,000 bbls. of oil daily to the West Coast and Texas Gulf refineries from some 750 wells in the area. With great finds in San Juan and Paradox Basin, oilmen counted 300 new gas wells put down in the first half of 1958. They expect another 300 before the year is out.

Pockets & Pipes. The Four Corners oil boom is nothing like an oldtime oil rush. Most of the land is in the hands of the federal or state governments or Indian tribal councils, and with leases going for as much as $4,308 an acre (v. $100 or so only two years ago), only the biggest companies can afford to gamble. They are there—in force. El Paso Natural Gas built a $750,000 division headquarters to operate the pipeline, has expanded it three times since 1952. This week or next, Shell Oil moves into a $500,000 headquarters, while Phillips Petroleum, Humble, Superior, Union, Carter, Gulf, Magnolia, Continental, Skelly and half a dozen other majors all have sizable operations.

Actually, the industry has known about Four Comers oil for years. The first well was brought in in 1879. But geologists never thought there was enough to bother with—until the 19505. Then, hunting gas for the rapidly expanding industries of the Los Angeles area, El Paso Natural Gas moved in. Soon it hit a big gas pocket in the San Juan Basin, built a pipeline to Los Angeles. Within a few years it had lines out to 3,000 wells in a system so intricate that it looked like a page from Gray's Anatomy.

The Reluctant Drillers. The first real oil find came in 1954. Shell Oil brought in a 1,170-bbl.-daily well at Desert Creek in nearby Utah. But the biggest discovery came in 1956. The Texas Co. tried to get other companies to come in on a deal to drill in the Aneth section of southeastern Utah, where the lease was about to expire, found no takers, and finally went reluctantly ahead itself. Result: it bored smack into the Aneth pool with estimated reserves of 300 million bbls., the biggest find since the Williston Basin seven years ago.

The great trouble was getting the oil out. Truck and rail costs were so high that Four Corners oil was priced out of the market. To lick the problem, a combine of six companies (Standard of California, Gulf, Continental, Shell, Richfield and Superior) formed the Four Corners Pipe Line Co., spent $50 million for a 16-in. line pumping 70,000 bbls. daily to Los Angeles. Now a second outfit, the Texas-New Mexico Pipe Line Co., has built another line, with 50,000 bbls. daily capacity, from Aneth field in Utah to Jal, New Mexico, where the oil goes into the Texas Gulf and Midwest markets.