- 11 -
3,000 barrels of crude oil per day. Petitioner purchased
all of CRA’s production for resale to its patrons.
On March 1, 1939, petitioner’s board of directors
organized the Cooperative Pipeline Association (CPA) as a
wholly owned subsidiary. CPA was organized to construct
and operate a pipeline system to deliver crude oil to the
Phillipsburg refinery. The construction of the pipeline
was to be financed primarily through the sale of preferred
stock in CPA to local cooperatives and their individual
members. CPA was merged into CRA during petitioner’s
fiscal year ending August 31, 1947. During its existence,
CPA transported oil exclusively to refineries owned by CRA.
Soon after the Phillipsburg refinery opened,
petitioner had difficulty obtaining sufficient crude oil to
utilize the plant’s full production capacity. Under Kansas
proration statutes in effect at the time, the wells
connected to the refinery had an allowable output of 26,000
barrels per month, or less than 900 barrels per day. In
addition, the Standard Oil Co. of Indiana (Standard Oil),
one of the primary crude oil producers in the Phillipsburg
area, refused to sell crude oil to CRA. The Kansas
Corporation Commission also initially refused to increase
the allowable output of wells in the Phillipsburg area.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011