This Oklahoma Town is the Pipeline Crossroads of the World
Aside from its origin in Indian Territory and the seven different land runs, oil has been at the heart of Oklahoma's short and storied history.
The once richest tribe of people in the world found their fortune in the ground. Oklahoma's most notorious serial killer committed his crimes for oil. The majority of Oklahoma's elite billionaires now owe their wealth to the state's oil industry.
Any way you slice the history pie, Oklahoma built an oil and gas legacy that keeps adding to that story today.
The biggest problem with oil and gas these days, aside from a lack of refineries, is the logistics of moving it around the country. It was once carted around by horses before rail the rail system was built. But you can't turn a profit in moving crude if it sits in your railcars waiting to be processed. You have to be able to dump it off somewhere and store it.
The Tank Farm Might As Well Be An Ark For Decomposed Dinosaurs
While it was common to just store crude oil in make-shift ponds out of necessity, it wasn't practical. Raw crude oil is not only incredibly flammable, but it also evaporates. Engineers did finally get around to creating massive tanks to safely hold the ultra-flammable black gold... but there had to be a better way to transport it.
Eventually, someone thought up the idea of pumping it across the continent in pipes.
The US pipeline system is how oil is transported today, and the biggest hub in the country is in the tiny little town of Cushing, Oklahoma.
Located about halfway between OKC and Tulsa, way off the beaten path, Cushing is a little town that found both boom and bust in oil and gas.
Settled in the 1891 land run, when a vast oil field was discovered there in 1912, the town grew into a major oil industry player. The town of 8,000-ish people was once the home of 23 oil companies and 50 refineries, but when the oil fields started to dry and the busts of the 1970s and 80s happened, the last of them closed their doors.
You Can't Keep A Good Community Down
As the oil industry practically abandoned Cushing, one brilliant mind was able to foresee the future. They retained control of a small pipeline terminal and 39 storage tanks left behind by Shell.
If You Can't Produce It, Might As Well Store and Move It
In the oil industry, while the headlines may be dominated by those who find and successfully drill for it, there are a million ways to sustain profits in that industry.
Most of these micro-industries can be summed up in three categories. Upstream, downstream, and midstream.
Upstream is where the headline-grabbing wildcatters make their names. This is the drilling and exploration of oil.
Downstream is what the industry calls the process of making finished products... It's the midstream designation that will forever be the unsung hero of American life. Midstream is the moving and transportation of upstream products to downstream manufacturers.
Cushing's once major oil-field community became a sprawling network of pipelines and storage tanks, a Mecca of midstream industry if you will. If you look at an aerial photo of Cushing today, there's a curious bunch of circles spread far and wide around the town.
A closer look reveals that each dot is a massive storage tank for petroleum products, mostly crude oil fresh out of the ground.
Thousands of them north, south, east, west, and in Cushing, quite literally becoming the Pipeline Crossroads of the World, but it almost didn't happen.
The dreaded 1970s are remembered as some of the worst times in American oil history. Lines at gas stations were miles long, limits were put on how much you could buy, prices skyrocketed due to the low supply, and the industry as a whole nearly went bust around the world.
This volatility spilled over into the 1980s. When my father graduated college and took a job with an oil company, his excitement for adulthood was quickly hindered by the challenges that came with the territory. When he moved to a refinery town in Oklahoma for his job, the banks wouldn't loan him money to buy a family home. That's how poor the oil industry was at the time.
No Risk, No Reward
As bad as the oil industry was in the 70s and 80s, Wall Street capitalists still operate under the notion of no risk, no reward. Even during oils' worst time in American history, the New York Mercantile Exchange took a chance that put Cushing on the world map in 1983.
Because Cushing had built up such a network of piping and storage tanks, NYMEX decided it would be the perfect place to hub the new oil pumping out of West Texas.
Over the last forty years, Cushing has become the largest oil storage field in the world. An international oil hub that can not only store up to 91 million barrels of oil, it flows through the community from coast to coast both east and west, but also from Canada to the Gulf of Mexico.
13 different pipelines, including the Canadian Keystone Pipeline now flow into Cushing from all directions. Six companies own and manage the vast storage "tank farm" there, and because so much oil flows through it, the prices of oil and finished fuel products are directly affected by the efficiency of this tiny little Oklahoma town.