HISTORY of THE TEXAS COMPANY

And PORT ARTHUR WORKS Refinery

 by Elton N. Gish

The Port Arthur Works was a direct by-product of the January 10, 1901, Lucas gusher and the resulting Spindletop oil boom at Beaumont. Over 200 companies sprang up from the Spindletop oil boom, but only a handful of them was still in business 50 years later. Familiar local companies born of Spindletop black gold were the Gulf Oil Corp. and The Texas Company, with the latter being the only survivor today. The Texas Company was renamed Texaco, Inc. in 1959. From modest beginnings in 1902 with the construction of The Texas Company’s first refinery, Port Arthur Works, an international, major oil company was born. On January 1, 1989, Saudi Refining, Inc. purchased 50% of Texaco’s Port Arthur refinery as part of a joint venture with Texaco. This joint venture, known as Star Enterprise, includes two other Texaco refineries in Convent, LA and Delaware City, DE and all of Texaco’s marketing in southeastern U. S. Later this year, a new alliance between Texaco, Shell Oil Co., and Saudi Aramco will be formed. This new alliance will be called Motiva Enterprises LLC.

On January 10, 1901, the world famous Lucas gusher shot a stream of black crude oil high above the derrick confirming Pattillo Higgins’ prophecy of oil under the hill on Spindle Top Heights, later known simply as Spindletop. The geyser of oil flowed out of the 6-inch casing pipe for ten days at a rate of 70,000 to 100,000 barrels per day and collected in a temporary reservoir hastily constructed by building up earthen levees around the growing pool of oil. After the Hamill brothers successfully capped the gusher, an oil boom like no other witnessed swelled the size of Beaumont from 8,000 residents to more than 50,000 in a few months. Investors and men of vision rushed to Beaumont to see if they could take advantage of the new oil discovery. By the end of 1901, there were over 100 wells at Spindletop many of them located on "doormat" size pieces of land barely large enough for the derrick and drilling equipment.

The most significant company started during the Spindletop oil boom was The Texas Company. The new company was formed primarily by the efforts of two dissimilar men, J. S. Cullinan and Arnold Schlaet. Cullinan worked in the Pennsylvania oil industry and later went to Corsicana, Texas about 1898 when oil was first discovered in that district where he became the most prosperous operator in the field. He formed the Petroleum Iron Works, building oil storage tanks in the area. When the Spindletop boom came in January 1901, Mr. Cullinan decided to visit Beaumont. Schlaet managed the oil business of the Lapham brothers, who were New York leather merchants. Schlaet’s field superintendent, Charles Miller, traveled to Beaumont in 1901 to witness the Spindletop activity and met with Cullinan whom he knew from the oil business in Pennsylvania. He liked Cullinan’s plans and asked Schlaet to join them in Beaumont.

Two enterprising Texans, former Texas Governor J. S. Hogg and J. W. Swayne, were very active in the Spindletop development under the business name of Hogg-Swayne Syndicate. However, they did not have a market for their oil or a method of getting it to a point of shipment. They acquired land for a pumping station near Spindletop and for a refinery at Port Arthur. They also constructed storage tanks and started to lay a pipeline to Port Arthur where Spindletop crude could be loaded in barges or ships. Hogg and Swayne turned to Cullinan for his knowledge of the oil industry. Together they formed the Texas Fuel Company on March 28, 1901 with an investment of $25,000 from Hogg and Swayne and $25,000 from Schlaet and the Lapham brothers to market Spindletop crude oil. The holdings of The Texas Fuel Company initially consisted of 40 acres of land and a 37,500-barrel tank at the Port Arthur refinery site, and two 37,500-barrel tanks 1-1/2 miles from Spindletop known as Garrison Station. A contract awarded to Jack Ennis called for the completion of a 6-inch pipeline to the Port Arthur refinery site and on to the future location of Port Arthur Terminal. Early in 1902, thirteen 37,500-barrel tanks were constructed at Garrison Station and eight 37,500-barrel tanks (Nos. 15-22) at Port Arthur, and the company entered into negotiations for erection of a loading dock at Port Arthur Terminal.

The Texas Fuel Company went into business on January 2, 1902, with little cash at its disposal. The new company purchased land for a refinery site at Port Arthur, two tanks, and a quantity of pipe for a pipeline from Spindletop to Port Arthur at a cost of $39,695. Since The Texas Fuel Company was not set up to drill wells and produce crude oil, Cullinan organized the Producers Oil Company on January 17, 1902, as an affiliate of The Texas Fuel Company. John W. (bet-a-million) Gates and other prominent men invested about $90,000 in "certificates of interest" in the new company. In February 1902, The Texas Fuel Company opened its first office in a small wood-frame, corrugated iron building on Laurel Street in Beaumont that was called the Exall Building. One individual described Laurel Street as "the worst kind of a mud hole lying between the front door (of the Company office building) and the Southern Pacific railroad a few feet away." The Company occupied three rooms on the ground floor on the west side of the building and one room in the upper story. The entire office staff consisted of T. J. Donoghue, G. M. Worthington, A. C. Talbot, F. W. Freeman, A. C. Miglietta, C. D. Stillman (a surveying engineer), and J. S. Cullinan. In October 1902, the office moved to twelve rooms on two floors of the "Temperance Hall Building" in downtown Beaumont. In 1908, the Company’s general offices moved to Houston.

In 1902, Spindletop produced about 17,500,000 barrels of crude oil with only 1,000,000 additional barrels produced in the rest of Texas. The Texas Fuel Company, capitalized at $50,000, was far too small to carry out the grand plans of Cullinan and Schlaet to market Spindletop crude. The Company needed much more investment capital to complete the pipeline and build a refinery. In March 1902, a new corporation, named The Texas Company, took over the assets of The Texas Fuel Company valued at $1,250,000. The transfer of assets to the new company occurred on March 21. On April 7, 1902, The Texas Company incorporated with a capitalization of $3,000,000. The stockholders of The Texas Fuel Company ratified the March 21 agreement on April 29 with all assets transferred to The Texas Company on April 30, 1902.

The Texas Company’s first pipeline from Spindletop was completed to nearby railway loading stations of Garrison and Nederland on May 16, 1902, and to Port Arthur in August. The loading terminal at Port Arthur was opened on September 29. More than two dozen steel tanks were built at Garrison and Nederland stations along with one earthen tank with a capacity of 103,000 barrels. Earthen tanks were simply open rectangular-shaped reservoirs made by scraping out the local gumbo clay to form earthen levees to contain the crude oil. Several such earthen tanks were constructed in 1920 at the Port Neches refinery with wooden roofs (covered with roll roofing) built over them to keep out rain water. Spindletop crude was purchased for three to five cents per barrel and transported by tank cars and a 400-foot wooden vessel, Texas Barge No. 1, from Port Arthur to the Amesville, LA terminal where it was sold to northern refiners and railroads. Cullinan soon obtained contracts to sell crude at $1.00 per barrel to Mississippi River sugar plantations to be used as boiler fuel to replace higher cost coal. The first barge shipment of crude was loaded at Port Arthur the end of September 1902 and was delivered to the Magnolia Plantation on the lower Mississippi River. With the opening of transportation facilities, crude prices increased dramatically to an average of 21 cents per barrel in 1902.

The first shipment of crude oil came from four 1600-barrel wooden tanks owned by the Hogg-Swayne Syndicate. The oil flowed through an 8-inch pipeline 1-1/2 miles to Garrison Station where a steam pump filled steel tanks. The oil was then pumped through the 6-inch pipeline to tanks at the Port Arthur refinery site. Two 80 horsepower boilers furnished steam for two pumps that pumped the crude oil through a 6-inch line to the dock for loading purposes. Port Arthur Terminal was not in existence at that time and the oil was pumped directly from eight tanks (Nos. 15-22) to the boats. The engineers at Garrison Station were E. H. Buckner and Tim Mullin. J. C. Colligan was the engineer that loaded the first boatload of oil delivered from Port Arthur by The Texas Company. Mr. Colligan recalled very distinctly the "fight we had to put up against the mosquitoes" and another fight to keep the pumps going because of the foaming of the steam boilers caused by the salt water. Fresh water was not readily available for the boilers so they had to use "briny water picked up from the marshes". In order to complete the loading of the first cargo of oil, it was necessary to inject a little crude oil into the boilers about every thirty minutes to prevent foaming.

The first land purchase for the site of the new refinery, called Port Arthur Works, was made on February 18, 1902. The Texas Fuel Company bought 25.1 acres at the end of Houston Avenue from the Port Arthur Land Company for $100 an acre. There was nothing on this land at the time except for a small brickyard surrounded by bulrushes and salt marsh. Forty additional acres were purchased from E. J. Marshall on March 7 for $6,245, and another 25 acres were bought from the Port Arthur Land Co. on June 6. During 1902, a total of 90.1 acres of land had been purchased at an average price of $124.92 per acre. Over the next 18 years, another 3,470 acres were purchased from the Port Arthur Land Co. at an average price of about $27.65 per acre. Acquisition of land currently totals about 5,000 acres. On November 22, 1902, the first appropriation was made for the construction of a $150,000 refinery and $20,000 asphalt plant at the Port Arthur Works. Asphalt (purchased from the Gulf Refining Co. in Port Arthur) was the first product sold by The Texas Company in February 1903 long before the refinery was ready to operate. The Port Arthur Works refinery started operating on November 13, 1903, with the following: two 1,000-barrel shell stills for distilling crude oil, two asphalt stills, two burning oil agitators, an acid plant, barrel house, machine shop, and a small office building. The refinery produced about 1,000 barrels of products per day. The only products made that first year were distillates, fuel oil, residuum, and asphalt. In 1903, the refinery charge 43,200 barrels of crude and produced 21,872 barrels of distillates, 10,873 barrels of fuel oil, 9,655 barrels of residuum, and 1,724 tons of asphalt. The word "Texaco", first used as a product name on December 21, 1902, originated as a telegraph address in Schlaet’s New York office. The Company registered the name Texaco in 1906 as a trademark. The red star and green "T" trademark, registered in 1909, was first used on March 24, 1909.

In 1904, the refinery processed 318,364 barrels in its first full year of operation. In comparison, current crude running at the Port Arthur refinery is about 89 million barrels per year. By the end of 1903, the total investment at the refinery was $465,195. The refinery primarily operated for the production of fuel oil, and it was later in 1904 before any gasoline or kerosene was manufactured. In 1904, the yield of gasoline was 1.18%, kerosene 1.01%, asphalt 13.7%, with distillates and fuel oil yielding over 80%. The large quantities of distillates (gasoline fractions) were sold mainly as Solar Oils that were used by gas utility companies to enrich gas used in lighting city streets and in home cooking.

Mr. R. C. Holmes was the first Refinery Superintendent and Manager of the Refining Department. Mr. F. T. Manley entered the service at Port Arthur Works in December 1902. His history with the Company resembles the Horatio Alger hero, from Office Boy to President. Mr. Manley in the space of 24 years, 1902 to 1926, rose from his first position of three jobs in one, Pumper, Yard Foreman and Skipper of the yacht "Texas Girl", to Vice President of The Texas Company.

In 1922, S. C. Fox recalled when he arrived at Port Arthur Works in May 1903 you could "see bald prairie at every point on the compass". Fox worked at the Asphalt Plant at Port Arthur Works. Just across the road from No. 1 Boiler House were two 500-barrel stills with two cooling tanks that would explode occasionally, that is, "whenever they felt like it -- they blew themselves all out of shape". At that time, "the only way the stillman had for testing the asphalt was by chewing; if it crumpled in the mouth it was too hard; if it stuck to the teeth it was too soft. It simply had to be chewed without any bad results; then we all chewed it." Behind No. 1 Boiler House was a small pond that use to be a clay pit for making bricks. Water for the boilers came from the pond.

  The Texas Company's supply of crude was cut off when the Spindletop wells suddenly stopped flowing in the fall of 1902 soon after the field caught fire in September. Without a flow of crude the new Company would soon fail to meet its obligations. Compressed air was used to "blow" the field in a futile attempt to restore flow from the wells, but salt water quickly invaded the wells. Production dropped from 62,000 barrels a day to 20,000 barrels a day and fell to 5,000 barrels a day a year later. The Texas Company had an option to purchase the 865-acre tract at Sour Lake (about 20 miles northwest of Spindletop) for $1,000,000. The option was about to expire when the third and last test well blew in a gusher on January 8, 1903. A million dollars to exercise the option had to be found quickly. J. W. Gates and his friends furnished $590,000 in exchange for Company stock and the Lapham group came in for $350,000. Others funded the remainder and the option closed for only $900,000 because of a possible flaw in the title. This new, abundant supply of crude oil saved the company from bankruptcy. Later in 1903, additional oilfields were discovered in nearby Saratoga and Batson and another Spindletop-size discovery was made in Jennings, LA. The Company’s subsidiary, Producers Oil Company, held major interests in all of these new discoveries and made welcomed profits for the parent company.

  By 1904, Port Arthur Works employed 89 people and added the production of gasoline, kerosene and lube oil. When the first lubrication pale oils were produced on the old East Side Lube Stills, Mr. Dellinger was Still Foreman, and Mr. Repschleger was Stillman. Mr. Repschleger recalled how at that time, when 100 barrels of on-test oil were produced in a day, it was sufficient occasion for a party. It was the practice at that time to work fourteen hours a day for two weeks and then ten hours a day for the next two weeks. By 1905, the refinery had saturated existing domestic markets with products. The refinery started shipments abroad after the Company formed the Continental Petroleum Company to handle foreign trade and opened their first foreign terminal in Antwerp, Belgium, on September 29, 1905.

On September 1, 1906, The Texas Company purchased from the Central Asphalt & Refining Company their asphalt refinery at Port Neches. Expansion of that refinery soon made it the largest asphalt plant in the world, with a capacity of over 25,000 tons per month, and it maintained that distinction for many years. The manufacture of asphalt at Port Arthur Works ceased a few years later. Much of the asphalt produced at Port Neches Works was shipped in wooden barrels produced in their own cooper shop. In addition, tar paper, slate coated roll roofing and asphalt shingles were produced from the early 1920’s until the late 1950’s.

Construction of new facilities at Port Arthur Works continued at a rapid pace. A permanent brick and concrete office building was constructed in 1906. The Grease Plant was constructed in 1910 as were several new operating units, boilerhouses, and buildings. At the end of 1910, Port Arthur Works had grown to 501.32 acres. There were 392 employees earning $24,928 per month. Plant investment had grown to $1,800,000. The volume of crude charged in 1910 was 1,668,186 barrels.

In 1908, naphtha (gasoline) was used in cooking stoves, illuminating torches, industrial engines, and a small amount found a new use in automobile engines. However, the most promising outlet for naphtha was in paint manufacture. Large quantities of naphtha were sold as a turpentine substitute, and it was used as a solvent in paint, varnish, and lacquers. The trade name of this naphtha was Texine and a special 4-inch pipeline was installed to the Port Arthur Terminal to load ships and barges. In 1911, there were fewer than 1 million automobiles in this country and a growing demand for gasoline. In that year, the Company offered three grades of gasoline, and it was no longer considered a waste product.

In September 1908, construction of the first Can and Casing Plant was begun at Port Arthur Terminal with manufacturing operations started in the spring of 1909. The plant was destroyed by fire in March 1910. Rebuilding using fireproof concrete construction was completed 60 days after the fire. The Shook Mill (for cutting and preparing boards for boxes) and the Box Factory (for printing and nailing the shipping boxes) were built in 1912 to supply wooden cases for shipping cans of lubricating oil, kerosene (for lamps and stoves), and naphtha all over the world. "Oil for the lamps of China" was shipped to the Far East under many trade names such as Yin Foo Brand (meaning Good Luck), Sing Brand (meaning Star), and Scale Brand (the "Scale" marking denotes the Chinese "Justice" in quality and quantity). The four-story Specialty Can Factory was constructed in 1915, and a 3-story Employee’s Service and Lunch Building was built in 1920. More than 1,000 women and men worked in the shook mill, box factory, canning factory, and filling rooms all operated by the Case & Package Division and later under the subsidiary name, the Texaco Can Co.

The cans were manufactured from thin sheet metal lithograph printed with the latest eye-catching designs incorporating the famous Texaco red star and green "T" trademark. The printed sheet metal was cut, formed into desired shapes by machines, fastened together by applying solder to the seams (one time done entirely by hand), filled using the latest automatic filling machines (some of which were designed by canning plant employees), put into wooden cases, lids nailed on, and loaded aboard trains and ships. All empty cans, filled cans, and finished wooden boxes traveled on an endless system of overhead chutes and conveyors. In 1916, a unique spiral conveyor was purchased that could be lowered into the hold of a ship, dramatically decreasing the time required for loading. A typical ship would hold 174,000 cases containing 1,740,000 gallons of burning oil and other products bound for China, Europe, the Middle East, South America, Africa, Australia, or other foreign destinations. In the 1940’s, wooden boxes became too expensive and were replaced by cardboard boxes. Many sizes and shapes of cans were manufactured for Texaco products from tiny 3-oz home lube cans with long metal spouts to large square 5-gallon cans. Cans for other oil companies and companies packaging syrup, coffee, cooking oil, and frozen eggs were also manufactured. The last metal cans, round 1-gallon Havoline cans, were manufactured in November 1984. All blending and filling operations at Port Arthur were discontinued shortly thereafter when modern facilities were constructed at key terminals around the country.

Metal Texaco cans shipped to the far reaches of the world found additional uses through the efforts of ingenious individuals. One Brazilian man formed a durable sprinkler out of a 5-gallon can. In China, cans and boxes were converted into various household tools (such as dustpans, food boxes, oil lamps, and candlesticks), ornaments, and toys of every description. Wooden boxes were converted to chairs, desks, and tables just to name a few items.

In 1912, lubricating oils were obtained from asphalt base crude oil because they contained small quantities of wax or paraffin. However, the best quality lubricating oil could be obtained from waxy paraffin base crude. Facilities were constructed that year to remove the wax from paraffin base lube oils in order to produce a higher quality product. In 1914, much of the by-product wax was used in a line of products called "Qckwork Metal Polish". Many of the metal "Qckwork" cans had a picture of a man polishing a car with the caption, "It Sure Is Quickwork". "Qckwork" was produced in both liquid and paste form from 1914 until it was discontinued in 1923. After that, most of the wax was used in Texaco Liquid Wax Dressing for polishing floors.

Early Tuesday morning, August 17, 1915, a great hurricane hit the Port Arthur area, and the storm surge flooded the entire refinery. For the first time since the refinery started in 1903, all of the units in the refinery shut down and remained down for ten days. For several days after the storm was over, the only satisfactory means of getting around the plant was by motor boat. Before the storm, a 37,500-barrel tank (No. 1169), located at the rear of the West Side Coke Stills, had been disconnected from its lines in preparation of doing some repair work on it. When the storm hit and the water started to rise, the tank was still empty and disconnected, and the water rose to such an extent that it floated the tank off its foundation. The tank drifted away on the water about ten miles to near Nederland. The water rose quickly to a level of four feet at the office and was still at a level of two feet nine days later. About 1,500 citizens of Port Arthur evacuated to the refinery where most spent from 3 to 4 days living in the barrelhouse and other buildings. Reportedly, three children were born during that week. On August 21, 1915, No. 3 Boilerhouse was started in preparation for restarting the refinery. The water level reached four feet in the plant and did not completely recede until September 2. No storm insurance was carried on the equipment, and to make matters worse, the city of Port Arthur did not have any pumping equipment. A system of levees was constructed the following year, and the city later passed a bond issue to construct a levee system of its own.

  One current employee’s mother, Mrs. Leona Follett, recalls today how, as a little girl, her parents seeking protection from the storm floated her in a wash tub to The Texas Company. The following was taken from a diary kept at Port Arthur Works during the days of the hurricane:

Monday, August 16: "Great storm scare in town last night, but no real trouble yet. Wireless reports from Gulf warn us to expect high wind and water. This morning windy, but only occasional showers. Wind rose after noon, rain set in steadily, both increasing rapidly to alarming extent. All lights out about 9:30. People moving to high ground and brick buildings."

Tuesday, August 17: "Wind at maximum about 2:30 a.m., when lake came over banks and began creeping inland. People near the Works began flocking to our concrete warehouses, just ahead of the water. Texaco trucks and wagons moving everybody until water was too high. At 8 a.m. water came over the Kansas City Southern and Texas & New Orleans R. R. tracks and rose rapidly all over the plant. By noon practically all first floors were under water, all boiler houses flooded, all stills cold. For the first time since this was a refinery all fires are out. Wind and rain continuous and violent."

  A report to Company Management dated August 29, 1915, had some interesting details about the storm and its aftermath:

Up until the time of the 1915 hurricane, all shift men were working 12-hour shifts, and at shift changing time, they worked twenty-four hours straight through. Shift men received an average rate of 30 cents an hour while day men were being paid 25 and 27.5 cents per hour. Shift jobs were at a premium, and most day men wanted to be transferred to shift jobs in order to receive the higher rate and work longer hours. The day men were working 9-hour days at that time. After the flood, however, the whole plant was put on an 8-hour basis, including the shift men. At that time there was a lot of talk among the employees about the Company going broke due to changing from twelve to eight hours.

 

In 1920, the employees decided that there was a need for a convenient place to purchase quality groceries at reasonable prices. Goods were to be sold at cost plus a reasonable percent to cover the cost of management and expenses with the intent that prices would be lower than prevailing local prices (typical savings of 18-20%). The Magnolia Refining Co. (now Mobil) refinery in Beaumont had recently organized an employee’s cooperative store for just such purpose. In 1920, The Texas Company employees organized "The Cooperative Association", commonly referred to as the Texaco Employees Co-operative Store. Stock was sold for $10 per share (only one share per employee) with a capitalization of approximately $18,000 and the affairs of the store were under the direction of an elected board of directors. The Company was not financially responsible for the store or its operation; however, it did take an active interest with much behind-the-scenes participation. A small two-story wooden building near the Main Gate on the north side of Houston Ave. (next to the railroad track) was purchased and converted to a store. The store opened for business on "Thursday March 15, 1920" (date given in March 22, 1920 memo is actually a Monday). They divided the store into several departments such as dry goods, grocery, fruit and vegetable, meat, tobacco and candy, and cold drink stand (serving cold drinks, coffee and hot dogs) that could be purchased with coupons. The Articles of Association stated that script or coupon books would be sold at a discount each quarter. The amount of the discount varied each quarter dependent upon the expenses and retained profits needed to maintain the store. New employees could purchase a $10 refundable membership giving him the privilege of purchasing items from the Co-op Store below prevailing market prices.

 

The Co-op Store soon outgrew the small wooden building. Plans for a larger permanent building began as early as 1924; however, it is not known when the new building was completed. One photograph dated April 4, 1930, shows the completed building. It is clear from the color of the stucco that a new addition had recently been made on the west side of the original building indicating the new building was constructed a few years earlier. The concrete stucco building faced Houston Ave. on the north side with 19th Street running along the east side of the building with the address 2058 Houston Ave. A photograph taken on July 14, 1937, showed an employee’s Texaco filling station located about where the old Co-op Store stood.

 

On Friday March 11, 1960, the stockholders of the Cooperative Assoc. voted to dissolve and liquidated the store. The association had over 1,600 members and sold groceries, dry goods, hardware, and drugs. The President of the association, George Adams, said that "in the past the store did a tremendous business, but in the last few years, due to competition, business has dropped to such a state that the board feels the concern should be liquidated." George Sladczyk, Jr. was attorney for the association and published a list of all shareholders in the April 14, 1960, Port Arthur News. The Cooperative Association was officially dissolved on July 23, 1960. The shareholders received a check payment for their share of the association.

 

In the early 1920’s, the Company opened two new cafeterias for the benefit of the employees: the Central Cafeteria and the West Side Cafeteria. The West Side Cafeteria was open 24 hours per day. The cafeterias had a combined seating for 1000 persons with meals being served at cost and smoking permitted in all during the noon lunch hour and supper hour in the evening. Below is a menu from December 16, 1923:

The growing demand for gasoline for automobiles threatened to limit the growth of The Texas Company. In 1901, the entire production of gasoline in the U. S. was less than 7 million barrels (42 gallons per barrel); in 1910, it was less than 15 million barrels; and in 1920, production had increased to 116 million barrels. Mexican crude contained a naturally higher portion of gasoline. Importation of that crude began in 1918. However, The Texas Co. faced strong competition from the batch thermal cracking process developed by Dr. Burton of the Standard Oil Co. of Indiana in 1913. The Burton thermal cracking process produced an even larger percentage of gasoline from crude than was naturally present but had the disadvantage of being a batch process rather than a continuous process. The thermal cracking process uses high temperatures and high pressures to break or cut long chains (molecules) of carbon atoms (in heavy components of crude oil) into smaller molecules of carbon atoms. These smaller carbon molecules are components in gasoline, propane, butane, and fuel gas. Cracking the heavier, longer molecules of crude allows a higher yield of more profitable gasoline and a lower yield of less profitable fuel oil. An added benefit is the gasoline produced has a much higher octane, too.

 

The Texas Company purchased the J. H. Adams patents for liquid-phase thermal cracking and proceeded to convert the patents into a new continuous thermal cracking process. At Port Arthur Works, experiments were conducted by R. C. Holmes (Vice President in 1913, then head of the Refining Dept., and later elected President of the Company in 1926) and F. T. Manley (a laborer in 1902, engineer of the yacht "Texas Girl", then yard foreman, later head of the Refining Dept., and elected Vice President of the Company) to develop the continuous thermal cracking process using the Adams patents. Neither man had attended college. In 1918, The Texas Company put into operation at Port Arthur Works the first experimental continuous thermal cracking unit in the U.S. This process increased the quantity of gasoline that could be produced from a barrel of crude. It was later called the Holmes-Manley Vertical Still (HMVS) in honor of the two employees who developed the commercial process. The first commercial HMVS battery started operating at 12:01 a.m. on February 8, 1920. The first run on the HMVS lasted for 60 hours, and then the unit was shut down to clean out the coke. A great expansion of facilities was once again underway to meet the rapidly increasing demand for gasoline. Within 18 months, there were 24 HMVS batteries. By 1927, there were 74 HMVS batteries in operation. The gasoline yield from a barrel of crude was increased from 24.2% before the HMVS batteries to 61.5% in 1927.

 

In 1923, the worst HMVS fire in the history of Port Arthur Works occurred when HMVS Battery 28 exploded and burned. Before the fire could be brought under control, three other batteries were almost totally destroyed. Nine men were killed in this one catastrophe. For many days afterward, it was difficult to get enough men together to operate the pressure stills. Many of the problems associated with the HMVS batteries were from the use of large screwed pipe for the high-pressure service. The introduction of welded pipe and fittings dramatically reduced the hazards of working these units.

 

Another problem involved plant losses. After the Holmes-Manley batteries started operation, plant losses increased rapidly. In 1919 before the first thermal cracking battery had started up, the total volume loss was 3.7% of the crude oil charged to the plant. However, in 1920, this loss had increased to 6.6%. By 1921, the West Side Gas Plant was in operation, but so were several more HMVS batteries. The gas plant could not keep up with the increased load, and plant losses were 8.7% in 1921. The maximum number of barrels lost (most of it as gas) in any one year was nearly 1.3 million barrels in 1925 or 8.3% loss basis crude. These losses were eventually brought under control by the installation of adequate gas plant facilities, gasoline stabilization equipment, absorbers, and a revised absorption oil stripping plant. By 1927, plant losses were under control. The yearly volume loss was only 142,000 barrels or less than 1% of crude oil charged.

At the end of 1920, Port Arthur Works had grown to 4,623 acres. There were 3,223 employees earning $464,000 per month. Plant investment had grown to over $19 million. The volume of crude charge in 1920 was 12,914,000 barrels.

 

Technical advances were also being made in developing processes for making better lubricating oils and greases at Port Arthur Works, The Texas Company’s only lube plant. Most of the lubricating oils used in automobiles were made from Pennsylvania crude oils because of its naturally low wax content, but they were comparatively dark in color. Texaco lube oils, made from Texas and South Louisiana crudes, were lighter in color. Oddly, customers preferred darker oils. The Company decided to advertise their lighter oils as "Texaco Motor Oil -- Clean, Clear, Golden", and displayed them in glass bottles at service stations. Customers were quick to see the difference and demand for lubricating oils increased from 266,000 barrels in 1914 to 1,511,000 barrels in 1920.

 

In 1921, No. 4 Boiler Plant was built, and, during the following year, a general plant lighting system was installed. In addition, Port Arthur Works installed a materials recovery plant and storage yard. Since that time, recycling of materials for reuse or sale has played a big part in holding down costs and reducing the discarding of useable materials. The policy of economy was an ever-present watchword as it still is today. Two interesting early examples were remembered in the magazine, The Texaco Star, issued in February 1930. The first story relates how "Jack Collins, veteran of the acid plant, recalls vividly the ceremony necessary to obtain a pencil: An exhaustive account always had to be given regarding the last one issued, and the stub had to be submitted as evidence." The second story in that same issue recalls, "Daddy Deady, as brickmason foreman, one day sent out a hurry call for enough lumber with which to build a scaffold. C. C. "Daddy" Blackman [then superintendent of Port Arthur Works (1906-1909)] assembled several men and took them out to a bridge a few miles from the Works. "There’s your scaffolding," he told them. "When you’re through using it, bring the lumber back here and re-build the bridge."

 

Although there were increases in the crude running capacity during the early 1920's, most of the investment money served to shift the product distribution and improve product quality. This enabled the refinery to shift the distribution of products to sell more of either burning oils or gasoline, whichever the market demanded.

In May 1926, Texaco introduced a revolutionary improved quality gasoline called "Texaco New and Better Gasoline". With the new HMVS batteries in full operation and most of the distillation towers equipped with efficient bubble cap trays, the end point of gasoline was reduced from 437 to 400 degrees F. This change in product quality brought about a vast improvement in gasoline sales.

 

In 1928, there were twelve coke stills in operation. The production of petroleum coke was becoming a burden, because no market was available for this product. In that year, the four boilers in No. 4 Boiler House were converted from burning fuel gas to burning coke.

 

In 1929, there was another revolutionary development in refinery operations. Prior to, 1929, all crude oil had been distilled on shell stills which was a very inefficient method of distillation to separate the various products from crude oil. Shell stills were simply interconnected horizontal, cylindrical vessels (shells) with a firebox under each vessel. Crude entering the first vessel would boil off light vapors and the liquid flowed over a baffle to the next vessel operating at a higher temperature. Each succeeding vessel or shell would boil off heavier fractions from the crude until the liquid leaving the last shell was reduced to a heavy fuel oil. In 1929, the refinery installed the first pipe stills for distilling crude oil. The crude oil was heated in fired heaters composed of many bends and runs of pipe. The heated oil was then routed to an atmospheric tower equipped with bubble cap trays that efficiently distilled off fuel gas, propane, butane, gasoline, kerosene, and light gas oil fractions. The bottom stream from the atmospheric tower was then heated further in another fired heater and charged to a vacuum tower, also equipped with bubble cap trays, where additional gas oil fractions were produced under vacuum distillation. The first pipe stills installed at Port Arthur Works were Badger Pipe Stills Nos. 1 and 2 and Lummus Pipe Stills Nos. 1 and 2. All four of these units were completed in 1929. Consequently, the Shell Stills used for distilling crude oil, and the shell stills used for coke stilling operations, were doomed by technological progress.

 

In October 1929, there was a serious economic collapse. The ensuing depression, with its ever-increasing debt, brought about the closing of numerous banks, the collapse of industry, and the spread of unemployment. Management could do little else during this period than take a defensive action in order to persevere for its employees. The Texas Company made a profit in 1930; however, it operated at a loss during the next three years. The Company decided to put most of the employees at Port Arthur Works and Port Neches Works on a shorter work schedule rather than enact a layoff.

 

Another major catastrophe occurred in 1930. At 4:28 p.m. on the afternoon of June 11, 1930, the Burning Oil Agitators caught fire and were destroyed. The fire started when a railroad switch engine crossed a ditch containing gasoline from a leak in one of the agitator lines. The gasoline was ignited from a spark or from the fire in the locomotive firebox. The fire spread quickly and burned for 36 hours. One man was killed and fourteen others were hospitalized. Fortunately, the four new crude pipe stills were doing an excellent job of fractionation. It was no longer necessary to steam still gasoline and kerosene to remove light ends. Consequently, the West Side Steam Stills were taken over and converted to Burning Oil Agitators. The steam stills were used until new agitators could be built.

 

In 1930, a new Cooperage and Compounding Building (C. & C. Bldg.), two Pressure Coke Stills and the deFlorez Cracking Unit were completed. In the C. & C. Bldg. and the adjacent Case Oil Filling Building and Grease Plant, approximately 475 grades of lubricating oils and more than 100 grades of grease were compounded, packaged, and loaded for shipment. At the end of 1930, the plant had grown to about 4,700 acres. There were 3,286 employees earning a total of $471,430 per month. Plant investment had grown to nearly $56 million. Little investment money was spent in 1931 and 1932. The volume of crude charged in 1930 was 17,610,000 barrels. In an effort to offset the effects of the depression, the Company introduced Texaco Fire Chief Gasoline in 1932 with a big fanfare of advertising, including a radio comedy show with Ed Wynn as the star.

Also in 1932, Texaco began promoting its automobile chassis grease, Marfak. The name Marfak continued a tradition of naming Texaco products after stars in honor of its red star and green "T" trademark. Other products named for stars are Ursa, Crater, Algol, Vega, Meropa, and Spica. All of these products were manufactured, packaged, and shipped at Port Arthur Works.

 

It was during the years of chaos between 1930-1933 that the first unions were formed for the purpose of collective bargaining. The National Industrial Recovery Act (NIRA) of 1933 resulted in the development of the employee representation plan at Port Arthur Works. The first formal step toward actual installation of the plan was taken on July 5, 1933. At this time, the procedures for elections were set forth, and supervisors and foremen participated in daily meetings in order to plan operations and explain the reasons for, and purpose behind, various plans and operations. The employee representation plan was discontinued in 1937. However, the employee's collective bargaining agency, operating under the new Wagner Act, succeeded the employee representation plan. Elections were held in June 1937 to establish a new collective bargaining agent. During the 6-year period from 1933 to 1939, the collective bargaining procedure produced the following employee benefits:

During the late 1920's, the technological advances in refining were shifting emphasis from gasoline production to additional lubricating oil manufacture. Only a limited number of crude oils were suitable for the manufacture of high quality lubricating oils, and the demand for lubricating oils was beginning to exceed Port Arthur Works ability to manufacture the volume required. Facilities to manufacture lubricating oils were expanded during 1930. The Cold Treating Plant was enlarged, and a new North Side Stripping Unit, Clay Treating Plant, and Contact Filter Plant No. 2 were completed along with No. 19 Pumphouse to handle lubricating oils.

 

The demand for improved lubricating oils was a constant concern for the Company. Egon Eichwald of Hamburg, Germany obtained a patent in 1925 for a solvent refining process using furfural (a byproduct of oat processing). The Company purchased the rights to the patent and began experimenting on ways to turn it into a commercial process. Furfural refining could produce a higher quality lubricating oil but an efficient dewaxing process had not been found. The Indian Refining Company in Lawrenceville, IL had developed a solvent dewaxing process that they used to manufacture their Waxfree Havoline Motor Oil. The process used benzene and acetone as solvents. This process was needed in order to complete the Company’s plans for improving the quality of its lubricating oils. On January 14, 1931, The Texas Company acquired the majority control of the Indian Refining Company in an exchange of stock, and with it the refinery at Lawrenceville, the solvent dewaxing process, and the trademark "Havoline". The furfural refining process was developed and construction of the first furfural refining unit (FRU) was completed at the Indian Lawrenceville refinery on November 8, 1933. Together with the Indian Refining Co. solvent dewaxing unit (SDU) constructed in 1927, the new lube processing units greatly improved the quality of lubricating oil. The new oil produced was introduced in 1934 and marketed as Texaco’s premium motor oil under the name "Texaco Havoline Waxfree Motor Oil". This new oil was of outstanding quality and gained rapid acceptance.

 

In 1935, new lubricating oil manufacturing units were installed at Port Arthur Works to match those at the Indian refinery in Lawrenceville. The construction of Furfural Refining Unit (FRU) No. 1, Solvent Dewaxing Unit (SDU) No. 1 (solvent changed to MEK and toluene), and Propane Deasphalting Unit (PDU) No. 1 was completed. With this new equipment, lubricating oil could be produced from marginal (cheaper) crudes run at Port Arthur Works with much less concern over the type of crude charged. The new lube production at Port Arthur Works helped to meet the growing demand for the new "Texaco Havoline Waxfree Motor Oil".

 

There was widespread market acceptance of the new lubricating oils manufactured by the solvent refining and solvent dewaxing processes. Consequently, FRU No. 2, SDU No. 2, and PDU No. 2 were all built in 1938 in order to keep up with the demand for "New Texaco Motor Oil" introduced in 1936. Solvent refining could produce better quality lubricating oils than that obtained from unrefined Pennsylvania crude oils. Within a very short time, it became necessary to solvent refine the Pennsylvania oils in order to produce a lubricating oil of competitive quality. The Texas Company’s solvent refining and solvent dewaxing processes and technology have been licensed to companies all over the world.

 

During the period from 1935 to 1940, there was a rapid increase in the quality, as well as the quantity, of lubricating oils manufactured at Port Arthur Works. Badger Pipe Still No. 3 was completed in 1937 in order to produce additional raw materials for manufacturing lubricating oils. Also during this period, there was a continual shift in capacity limitations between lube oil processing units. Numerous technical changes were made to overcome capacity limitations and to increase the capacity of all of equipment.

 

The gas produced in the cracking operation contained large quantities of propylene and butylene. Polymerization Unit No. 1 was built in 1936 to convert (polymerize) these gases into motor gasoline. This unit was converted to computer control in the late 1950's. This was the first processing unit in the world to use computer control. The computer was donated to the Smithsonian Institute in the 1970's.

 

During the latter part of the 1930's, the demand for lubricating oils had been met by new refining processes. Now the emphasis was shifting to the production of aviation gasoline. The technical personnel at Port Arthur Works were actively engaged in developing an alkylation process. This process used sulfuric acid as a catalyst to convert butylene and isobutane into gasoline of extremely high octane. Alkylation Unit No. 1 was completed in 1939 to produce a premium quality aviation gasoline.

 

In 1939, facilities were installed to inject a chemical compound into the gasoline to inhibit the formation of gum deposits. The gum inhibitors proved to be very successful. Within a short time, the steam stills were no longer needed to manufacture a stable cracked gasoline.

In 1940, Port Arthur Works installed an automatic telephone system and a new Machine Shop. At the end of 1940, Port Arthur Works had grown to about 5,000 acres. There were 3,897 employees earning $604,000 per month. Plant investment had grown to nearly $63 million. The volume of crude charged in 1940 was 35,214,000 barrels.

 

In 1938, the Central Locker Building (Employee’s Building) was built so the employees would have a modern facility to shower and change clothes. In 1941, Port Arthur Works built a new Main Office Building to satisfy the needs of the growing plant. After the Japanese attack on Pearl Harbor on December 7, 1941, numerous construction projects were started in order to produce materials needed for the war effort. In the years 1942-1943, the Polymerization Unit No. 1 was converted to manufacture cumene for aviation gasoline and the Isomerization Unit was completed. Alkylation Unit No. 2 started operations in April 1943. Unseen corrosion on Alkylation Unit No. 2 caused an explosion and fire on December 28, 1943. Three men were fatally burned. Alkylation Unit No. 3 was started up in October 1943. It operated throughout the war period without incident.

 

By 1940, a new cracking process was threatening the supremacy of the HMVS thermal cracking process. The new process used a powdered catalyst that behaved like a fluid. The process produced a higher octane gasoline and allowed the product distribution to be varied. As a result of the tremendous demand for aviation gasoline during World War II, the development of the Fluid Catalytic Cracking Process was quite rapid. At the outset of World War II, a number of companies pooled their patents on the catalytic cracking process under the U.S. government sponsorship. Among the companies participating in this agreement were The Texas Company, M. W. Kellogg Co., Universal Oil Products, and the Standard Oil Company of New Jersey. This group studied all of the catalytic cracking processes and concluded that the war effort could be served best by building large Fluid Catalytic Cracking Units (FCCU). The first commercial unit in the country was put into operation in 1942.

 

FCCU No. 1 was completed and put into operation on March 3, 1944 and FCCU No. 2 was started on April 10, 1944. After the FCCU’s had been started up, Port Arthur Works began shipping butylene to the Neches Butane Products Co. for the manufacture of synthetic rubber.

During World War II, the Japanese cut off the supply of natural rubber from the Far East. Synthetic rubber could be made from butadiene, a chemical made from butylene (one of the byproducts of the cracking process). Five refineries in Jefferson County, The Texas Company, Atlantic Refining Co., Gulf Oil Corp., Pure Oil Co., and Socony-Vacuum Oil Co., Inc. (Magnolia Refining Co., now Mobil), exchanged their scientific knowledge to increase the supply of butylene for the production of both aviation gasoline and synthetic rubber. In March 1942, the five companies worked together to organize a non-profit corporation named Neches Butane Products Co., which produced butadiene from butylene and employed 1,000 people. The plant was built by the government (under the name of Defense Plant Corporation) at Port Neches and started operation on May 25, 1944. Rubber manufacturing plants were constructed nearby to convert the butadiene to synthetic rubber. The companies involved in the project did not receive any profit or fee for operating the plant. The Neches Butane plant was designed to produce 100,000 tons of butadiene per year but actually produced 170,000 tons per year.

 

World War II also increased the requirements for all lubricating oils. The demand for Aircraft Engine Oils practically doubled during the period 1942-1945. These increases were met without installing any new units. Existing equipment was modified to remove capacity limitations.

By the end of the war in 1945, Port Arthur Works was producing more than one million gallons per day of aviation gasoline. The production of aviation gasoline dropped from 8,228,000 barrels in 1945 to 889,000 barrels in 1946. Immediately after the war ended in August 1945, there was a labor strike that started on September 19 and ended on October 6. This was the first time in the history of Port Arthur Works that the plant was shut down by a strike.

 

On November 22, 1944, The Texas Company and American Cyanamid Co. organized Jefferson Chemical Co., Inc. The plant was constructed in Groves. It converted refinery gases into basic chemicals for the chemical and plastics industries, including ethylene glycol for automotive antifreeze. The Jefferson Chemical plant was completed in late 1947 and Texaco PT Anti-Freeze was introduced very early in 1948, made from ethylene glycol produced at this plant.

 

During World War II, the countrywide production of crude oil increased rapidly in order to manufacture the products needed by the war effort. Finally, the production of crude oil was at a rate far beyond the maximum efficient rate for the fields. It soon became apparent that there would be a critical shortage of crude oil if crude oil from the newly discovered fields in West Texas and New Mexico were not used. However, these were high-sulfur crude oils, and processing them would create numerous corrosion problems. While the war was still in progress, plans were made to process sour (high-sulfur) crudes. Equipment changes included protective metal coating for tanks, caustic washing, metal alloy protection on the nine HMVS batteries still in operation, and on the FCCU's.

 

Within a few days after the end of World War II, plant production was converted from a war-time to a peace-time basis. A large quantity of high-octane gasoline that had been used to manufacture aviation gasoline was now available for motor fuel blending. Consequently, an octane race started to increase the quality of motor gasoline. The capacity limitations on the FCCU’s were removed in order to increase the volume of motor gasoline that could be produced. The charge rate was increased from 15,000 to 42,000 barrels per day; however, the conversion level decreased from 65% to about 45%. During the four-year period from 1945 to 1949, the production of motor gasoline practically doubled from 19 million barrels in 1945 to 37 million barrels in 1949. The demand for lubricating oils paralleled the demand for motor gasoline. To meet these demands in 1949, the construction of Vacuum Pipe Still No. 2, FRU No. 4, and SDU No. 3 was completed.

 

At the end of 1950, there were 5,433 employees earning nearly $2.3 million per month. Plant investment had grown to $130.6 million. The volume of crude charge was 49.7 million barrels. That volume was abnormally low because Port Arthur Works was shut down for 115 days due to a labor strike called by the C.I.O. The strike started on April 4 and ended on July 29, 1950. In 1951, the volume of crude processed was a more typical 78 million barrels.

There was a phenomenal growth in the sale of products during the post war years of 1945-1950. However, this growth was exceeded during the 5-year period between 1951 and 1956. The crude oil charge rate exceeded 100 million barrels in 1956.

 

In 1952, Port Arthur Works installed underground storage for butanes at Sour Lake, Texas. The underground storage consisted of a cavity washed out of a salt dome. The salt dome is approximately 11 miles long, 7 miles wide, and more than 1,800 feet thick. The initial storage capacity in the mushroom-shaped salt dome was 300,000 barrels.

 

Due to the increased octane level of motor gasoline, Catalytic Reforming Unit (CRU) No.1 was constructed and started up in July 1954. The octane race continued and CRU No. 2 was constructed and started up in March 1955.

 

Additional major construction projects completed were VPS No. 3 and FCCU No. 3 in 1956, followed in 1960 by CRU No. 3 and the UDEX unit (to extract high octane aromatics such as benzene, toluene and xylenes from reformate (CRU) gasoline). All of these processes were needed to produce 100-octane premium gasoline during the late 1950's and the 1960's.

 

In late 1959, The Texas Company changed its name to Texaco, Inc. All products were marked Texaco, Inc. after this year. In 1963, the Company changed from the round logo (with Texaco, star, and green "T") to the hexagonal design logo with word "Texaco".

 

The gasoline race was slowed to a snail’s pace in the 1960's with the predominance of jet aircraft. Aviation jet fuel is a kerosene fraction called avjet. The demand for high octane motor gasoline soon dropped as less polluting automobile engines required a lower octane. Aviation gasoline is presently required just for small private airplanes, with jet fuel becoming the predominate aviation fuel.

 

The completion of VPS No. 4 in 1970 allowed an increase in crude running as well as shutting down of older, smaller crude units. The completion of the Delayed Coking Unit in November 1992 allowed less profitable fuel oil to be converted to higher value products such as gasoline. A major improvement in the Lube Plant was realized with the startup of the HTU 4 Lube Train in October 1998. This new unit replaced four old lube processing units and produces the next generation of superior quality lube base oils. The HTU 4 Lube Train is a revolutionary design unlike any other unit in the world.

 

Many changes have taken place at the Port Arthur Refinery in the last 15 years through efforts to streamline operations, reduce personnel (from more than 5,000 in 1984 to a little over 1,000 in 1998), shift product distribution, and improve the efficiency of our refinery. All blending and packaging operations for lubricating oil and grease manufacture were discontinued in the mid-1980’s in an effort to reduce operating costs. Current emphasis is focused on producing a quality line of lube base oils (used by Texaco’s modern blending facilities around the country) and the most profitable mix of fuels products.

 

On July 1, 1998, the Port Arthur Refinery became part of a new alliance called Motiva Enterprises LLC. The alliance will be a joint ownership with 35% Shell Oil, 32.5% Texaco and 32.5% Saudi Aramco.

 

Nos. 2 and 3 SDU, which filtered wax from lube oil were permanently shut down in 1998. They were replaced with the HTU No. 4 Lube Train that used Chevron's isodewaxing technology in a unique process configuration developed by Port Arthur to produced Group II and Group III oils, which are higher quality and perform better. The specially designed catalyst cracks the wax and improves lubricating properties of the lube oil, which is completely colorless. Charge to the unit was introduced on October 1, 1998 with on-test product going to tankage on October 3. The LCDU was converted to Lube Train technology and came on-line the end of December 2000. At that point Port Arthur Refinery became the largest lube base oil manufacturing plant in the Western Hemisphere and the largest Group II/III manufacturing plant in the world with a total production of 22,000 barrels per day. The unique, locally-developed process enables us to produce lube oil more economically that other manufacturers.

 

In 2001, Chevron acquired the assests of Texaco in a merger to form a new company, Chevron-Texaco. On October 9, 2001, Shell Oil Co. announced that it had signed a memorandum of understanding to acquire Texaco's interests in Equilon Enterprises LLC making Shell the 100 percent owner. It also provides that Shell and Saudi Refining, Inc, (SRI) will acquire Texaco's interests in Motiva Enterprisess LLC, whereby Shell and SRI will each become a 50 percent owner in Motiva. On February 13, 2002, The Federal Trade Commission approved the acquisition of Texaco's interests in Equilon by Shell and in Motiva by Shell and SRI.

 

The history of Port Arthur Works is very complex and rooted in meeting the demands of the customer and producing products of the highest quality while maintaining the highest level of environmental stewardship and employee safety.  From a dream of a few men, Port Arthur Works was instrumental in establishing a major international oil company - Texaco -- the last company to survive the great Spindletop Oil Boom.

 

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