Deconstruction of Pipelines

A brief history of steel pipelines

Steel pipes are long hollow tubes that are used for transportation of gas, oil, and refined products in the petroleum industry. The pipes are made in either a seamless or welded manner. The first methods were introduced in the early 1800’s and have evolved into the modern processes we use today. The versatility makes steel pipe the most often used product produced by the steel industry.

Modern day welded steel pipe can be traced back to 1815, when a William Murdock in London joined together the barrels of discarded muskets to form a continuous pipeline to transport coal gas from his “well” to a light house and streetlights of London. The demand for coal gas to furnish lighting produce a series of innovations has evolved into the modern pipe manufacturing industry. Over time, the pipe has become stronger and often more light weight as the need for various sizes in diameter and product requirements have come about.

In America, the pipeline industry and the oil drilling industry are closely intertwined.

A series of welded or coupled joints of pipe extended into oil or gas reservoir below the ground is essentially a vertical pipeline. They became horizontal when the need came to transport that product from the well bore to storage or refining area. Before horizontal pipelines, barrels of new crude oil were transported in barrels on wagons driven pulled by mules and driven by teamsters.

Teamsters and their subsequent unions ultimately caused their own downfall insofar crude in those days by charging too much for transporting barrels of oil and thus creating the modern day oil (or other products) pipeline industry. Railroads were threatened as well and conflicts arose when early on the railroad companies would not allow pipelines to cross their tracks. Since then, both types of transportation entities have learned to prosper and coexist.

Crude oil pipelines gather oil from wells and move it to refineries. From the refinery where the crude is made into various products, the finished product is then shipped from the refinery to an end user or to other refineries for additional processing. In many cases, these refined products are trucked and in many cases they are shipped out via additional pipelines. Many of these lines were installed above ground and were easily disassembled when the need for the pipeline no longer existed. Buried pipelines were another matter and presented recovery problems as they were buried from 6 inches to 12 feet in depth.

Deconstruction History

Until the 1970’s, most pipeline recovery was done by pipeline construction contractors who removed damaged or worn pipe or pipe segments and more often replace them with new lines. In other cases, pipeline contractors removed lines to replace them with bigger or smaller ones in the same corridor or easement where the old line had been removed. The contractors often received the old line as partial compensation from the pipeline owner/operator for laying the new pipe or were able to obtain the old pipe for little or no money. More often than not, they were paid to haul it off. For the most part, pipeline operators or owners treated old pipelines as scrap with little or no value. The contractor who received the recovered pipe would sell it to sales and rehabilitation companies who might make necessary repairs.

It was this group of buyers or resellers who rehabilitated the pipe and began to have a great influence on the quality of the pipe and the care given via removal.

In the boom economies of the 1920’s and 1930’s, when many of the large oil fields in the United States were discovered, pipelines were laid until the field was depleted. Sometimes these pipelines were then removed and transferred to another location where they were re laid and returned to service. Other idled pipelines were simply left in the ground. Entrepreneurs such as the resellers knew the pipe was a commodity of steel in tubular form and could be recycled and profits made. Methods evolved to economically remove without damaging the pipe and other disciplines of rehabilitation were introduced. The sales and rehabilitation companies would make the necessary repairs such as removing coating, straightening, de denting, beveling the torch cut ends and cutting the lengths to order before marketing the pipe as secondary or structural tubular steel.

THE EARLY PLAYERS

From this developed a mini industry of pipeline salvage and recovery and one of he chief players in this industry was Pete Knowles of Uvalde and founder of the tubular pipe and steel company, Gensco, Inc. Knowles had the vision to see the obvious, that used pipe was just that; tubular steel and useful for all the same purposes tubular steel was useful for. He teamed with contractors like Tony Kunitz of H and K Contractors of Sinton, Texas to buy the company’s surplus or recovered pipe as they replaced pipelines for the old Humble Pipe Line Company, which became Exxon. There was always a quantity of new surplus left over from these jobs as well. This practice gave Knowles and Gensco a continuous supply of inventory. Knowles later employed a contractor named Joe Fambro to take up pipe when he could find one to take up.

This was basically the beginning of the pipeline recovery business.

In the 1980’s, David Howell (doing business as Pipeline Equities) saw the value as well after selling a 20 mile 8″ line to Genesco after recovery and realized pipeline recovery could be a profitable endeavor. Howell was more than anything a marketer and knew how to contact pipeline operators on a mass scale though direct mail and moved the business model to a much larger scale than Pete Knowles had envisioned. In fact Pipeline Equities basically had one customer for many years, which was Pete Knowles and Gensco and later Pete Knowles and his subsequent PK Pipe and Supply, which marketed the many miles of pipeline the company purchased and removed in the 1980’s.

Pete Knowles at Gensco is more than anyone the pioneer with the vision to see the possibilities available. Many of the companies existing today have line pipe personnel who started with Gensco or got their training in that company in those early days. They include Bill McWhorter of Uvalco Supply, the McLaughlin’s of DKM, Bobby Kanz of Cierra Pipe, Creek, Richard Williams of RKW, and Ron Felts who now manages line pipe sales for JOY pipe owned by Bill Thomas who had been a partner with Pete Knowles and had owned 35% of Gensco along with Pete Knowles. Howard Knowles, the son of Pete Knowles currently is the principle of Cypress Creek Pipe. John Tadlock, a former Knowles right hand man has served as a consultant for most all of the firms mentioned above over the years.

Where Knowles was more a pipe marketer through Gensco and later PK with manager Dean Pirkle, Howell through Pipeline Equities was more in the recovery or salvage and rehabilitation end of the business. In the subsequent years Howell trained and ‘broke out” many new contractors into the take up or pipeline recovery business.

In today’s world used pipe and tubular steel is a totally accepted product.

Huge amount of footage and tonnage of all sizes of pipe are used for piling in construction projects all over the world. Additional hundreds of thousands of feet are used to build fences and corrals. Culverts for road crossings, tubes for flagpoles and signs as well as substructure for highways and bridge construction consume thousands of tons of pipe material. The Chinese used millions of feet of 8″ pipe for this purpose during the nineteen eighties and nineties. Most of it came from Texas and Louisiana from old lines laid in the nineteen twenties or thirties.

Because of these market expansions, the marketing aspects have changed accordingly. Instead of one, two or three localized markets, there are more than two hundred who deal is all aspects of secondary pipe. This might include used or so called reject which is pipe new from a mill that did not quite measure up to the standards of the producing mill or a standardizing agency such as the American Petroleum Institute. The global economy and a devalued or cheap dollar make secondary American pipe and steel popular as well. Which brings me back to the landowners we are discussing. Every single farmer or rancher we go across as we remove a pipeline asks for gift of some pipe or offers to buy some pipe at a cheap price. The farmers or ranchers are constantly in need of culvert for road crossings, creek crossings, corrals or fencing material.

We must maintain good relationships with the landowners who are the key to the success of a good take up operation.

We almost always oblige in the gift part up to a point, even though it might be reasonably expensive gifts. Any good take up or recovery operators have always had or have been good right of way agents or landmen as a matter of course and necessity. We have all found out life can be miserable when a landowner is out to make our lives miserable. He is able to do this of course by locking gates and denying access where we might need it, but don’t have easements or rights of way. The bottom line is we go to great lengths to have good relationships with our hosts, the landowners.

But life goes on and we move along trying to make a living and doing the best we can. Some of us do better than others, but the good operators who treat the landowners properly will be here for a long time. The others might be as well, but they won’t make near as much money or have near as much fun. Somehow, our past always precedes us.