Scouts – Oil Patch Detectives
In the hard winter of 1888, famed 37-year-old “oil scout” Justus C. McMullen, succumbs to pneumonia – contracted while scouting production data from the Pittsburgh Manufacturers’ Gas Company’s well at Cannonsburg.
McMullen, publisher of the Bradford, Pennsylvania, “Petroleum Age” newspaper, already had contributed much to America’s early petroleum industry as a reliable oil field detective.
Night Riders of the Hemlocks
In the excitement of Pennsylvania’s oil boom and with prices rising, margin trading of oil certificates was common – but unpredictable downturns ruined many a fortune seeker.
Conversely, if a speculator believed prices would fall, he could “sell short” and turn a profit. Optimism, pessimism, and rumor influenced the oil market’s behavior in both directions. Enter the oil scout.
Call them oil field detectives, a profession born as pipelines came into wide use in America’s early fields. Pipelines, a new and more efficient way of transporting oil, brought dramatic changes to the way oil was traded in the 1870s.
As the rapidly expanding petroleum industry grew complex – and risky – buyers and sellers became more wary.
With pipelines, instead of the oil buyer taking on-site delivery (in wooden barrels he provided), pipeline certificates were issued for oil delivery-in-kind at a negotiated price.
These certificates could be bought and sold by anyone. Trade in “paper oil” flourished in oil exchanges at Titusville, Petroleum Center, and Oil City.
Oil producers hired oil scouts to protect their investments from surreptitious market manipulation. Scouts searched for the facts about oil production.
As with all highly market-driven commodity industries, information and misinformation from speculators pushed prices erratically.
Scouts debunked rumors, “demystified” reports about oil wells and secured accurate information on production (or lack thereof) – sometimes despite armed guards at drilling sites.
James Tennent, author of The Oil Scouts – Reminiscences of the Night Riders of the Hemlocks, proclaimed in 1915 that scouts “saved the general trade thousands and millions by holding market manipulators in check.”
Justus C. McMullen
Tennett describes Justus McMullen, a young man who left a homestead farm in Orange County, New York, and eventually attended Cornell University to study civil engineering. McMullen contributed to the young oil industry as a reliable oil scout – and as the publisher of the “Petroleum Age.”
McMullen’s dedication as an oil scout would lead to his early death on January 31, 1888, at the age of 37. The book History of the Counties of McKean, Elk, Cameron & Potter (1890) describes his final days:
When others telegraphed rumors and guesses, he stayed up all night secretly to run the gauge pole in mystery tanks. A week before his death he started out to collect the data for the monthly report of operation. There were conflicting reports regarding the Pittsburgh Manufacturers’ Gas Company’s well at Cannonsburg, and to settle all doubts Mr. McMullen went to the well to get a gauge.
He was sick then. Other fieldmen went out from Pittsburgh with him. They were told what the well was doing. This was good ‘hearsay,’ evidence, and as the thermometer stood several degrees below zero, the other fieldmen went away satisfied with it. Not so with ‘Mac.’
For more than six hours, he waited there, chilled to the very marrow, until the well flowed again and he had gauged the flow. Then he went back to Pittsburgh sick. But he did not give up. He must complete his oil report, and he did, though the pain he suffered was terrible. The data he brought home with him, and dictated to his loving wife from his deathbed, was as accurate and reliable as any ever gathered.
Even with such hard-earned information as McMullen’s, speculation in oil certificates continued to destabilize early oil markets, creating an intolerable burden on both oil producers and refiners. Standard Oil Company put an end to the era when it directed its subordinate, National Transit Company in Oil City, to cease issuing oil certificates.
Standard Oil set prices based on its view of supply and demand - ending the wildly fluctuating speculation at the oil exchanges. The last of the oil exchanges to close was in Oil City in 1892. The building was later converted into a theater – which featured the earliest motion pictures.
The Petroleum Age
McMullen was the great-uncle of David L. McKain, founding director of today’s Oil and Gas Museum in Parkersburg, West Virginia.
McKain, named “Oilman of the Year” at the 2004 annual Sistersville Oil and Gas Festival, is a well-known figure in oil country, often seen trudging over hills and wading through mud to collect artifacts.
McKain is author of The Civil War and Northwestern Virginia – his second book about the history of West Virginia. His first, Where It All Began, is a history of the oil and natural gas industry in West Virginia and Southeastern Ohio.
McKain notes that his great-uncle, in addition to being a widely known and respected oil scout, was a pioneer in early industry trade publications. It was in 1883 when McMullen was scouting wells in Warren and Forest counties, Pennsylvania, that he became a part owner of the “Petroleum Age.” Unfortunately, his early death in 1888 led to it ceasing publication soon after.
According to the book Sketches in Crude Oil, McMullen had previously written about the industry. In 1879, he worked for several newspapers. McMullen’s oil patch reporting was described in Sketches:
“His painstaking, conscientious reports were accepted as strictly reliable. He would trudge over the hills, wade through the miles of mud and ford swollen streams to ascertain the precise status of an important well, rather than approximate it from hearsay. This care and thoroughness gave the highest value to the statistical work of Justus C. McMullen.”
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