It Was Time to Pump the Black Bog

King Baboon Pipeline Services.

The CEO’s office had been decorated in the image of Vernon Gruber’s greed, and it showed in every last detail.

The floor was covered with a thick Persian carpet so plush it would swallow your ankles, while the walls were hung with mounted deer heads and expensive oil paintings of unknown provenance.

The dark walnut desk in the middle of the room was so oversized that anyone sitting behind it seemed to be looming over the person in front of them.

But the man who had arranged all this had been decapitated, just like one of those taxidermied deer on the wall.

And now I was the one sitting there.

“······”

I skimmed the newspaper articles spread out on the desk.

For the past two weeks, Texas media had been racing to report on the corruption scandals at King Baboon Pipeline Services, and at the center of it all was the name Vernon Gruber.

///////

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I picked up the legal team’s report lying beside the article.

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.

As I read the report Vito had compiled, a dry laugh escaped me.

People usually don’t manage to claw all of this back.

Ordinarily, when someone embezzles money, they spend it like water. The logic is simple: once you’re caught, it’ll all be confiscated anyway, so you may as well enjoy it first.

But Vernon, for reasons known only to himself, had either hoarded the stolen cash or put it into solid investments, and thanks to that, we were now in a position to recover more than he had stolen in the first place.

Was he that sure he’d never get caught?

Maybe it was because this was 1992, but there were still far too many people who thought that sticking the words “nominee ownership” on something made it untouchable.

It reminded me of the BCCI scandal from the year before.

How had a bank ranked seventh in the world, with $20 billion in assets and branches in 73 countries, collapsed?

They had kept dual books in handwritten ledgers on paper and stored them in file cabinets, only to be caught.

A list of secret accounts had been tucked into a folder written out by hand and locked away in the basement vault of the London headquarters, and when an outside auditor happened to open that vault, twenty years of falsified accounting exploded all at once.

It was an era with little computerization, an era when the very concept of digital forensics was still unfamiliar.

Oddly enough, it was also an era when even highly educated elite financial criminals believed they were safe if they simply burned the paper or locked a cabinet.

An era when investigators beat the pavement, searched warehouses by hand, dug through piles of documents, and even brought in dogs to sniff out buried evidence in the ground—those things counted as state-of-the-art investigative methods.

That was America in 1992.

Come to think of it, someone like me, who knew all the future’s well-worn embezzlement tricks, might have been the odd one out in this age.

Still, he had some investment sense for a crook. That worked out nicely.

Vernon’s themed stock picks had unexpectedly turned out to be pretty profitable.

Thanks to that, I was going to recover more than the principal.

Then—

Knock, knock, knock.

Right on time, someone knocked.

A moment later, the door opened and Paul Hemsworth stepped inside.

“You called for me, Chairman.”

“Yes. Please, have a seat, President Paul.”

I gestured to the guest sofa.

Paul Hemsworth took a brief look around the office, then quietly settled onto one end of the couch.

His suit was worn, and ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠one heel of his shoe was scuffed down, but his back remained straight as a ruler.

His hands, resting on his knees, were neatly folded and steady.

“Would you like some coffee?”

“Thank you.”

Paul accepted the cup.

He wasn’t the type to become overwhelmed with emotion, nor did he fawn excessively with gratitude.

I picked up the folder on the table.

“According to your records, you’ve had a very broad range of experience. Drilling, extraction, pipeline work, pumping, refining, storage, distribution. You’ve gone through every stage of the process, from the moment crude oil or gas comes out of the ground to the moment it reaches the consumer.”

“Yes. I’ve served in many departments. I also visited overseas companies for technical research purposes.”

Paul’s voice gradually gained strength.

Now that we were talking about his field, his eyes had changed.

I pulled a thick folder from under the table and set it down in front of him.

Thunk!

Paul’s gaze locked onto the title embossed on the cover.

The gold lettering on the old leather cover seemed to tremble in the light.

“This is... the proposal I submitted back when the former CEO was still alive...”

“It was buried deep in the warehouse. Apparently Vernon told them to throw it out?”

“Yes. It was rejected as lacking marketability and being too idealistic.”

Paul’s voice dipped for a moment.

It seemed the fact that a design he had poured his heart into twenty years ago had been left to rot in a warehouse without ever seeing the light of day still stung.

But—

“I read it myself.”

I opened the folder and turned through the blueprints one by one.

“The biggest loss in the pipeline business is maintenance cost. From Midland to Houston, pipes buried over hundreds of miles expand and contract with every season. In the Texas summer, surface temperatures go above 60 degrees Celsius, and on winter dawns they drop below freezing.”

Paul nodded.

“As that temperature difference accumulates metal fatigue, cracks begin to form at the seams. In the industry, we call that thermal stress fracture, and most pipeline companies don’t do anything until the cracks are already there. Reactive maintenance.”

“Yes. But your plan is different.”

I had spent the whole night in Harvard’s library gathering materials and testing hypotheses.

In the basement stacks of Widener Library, technical reports published by the American Petroleum Institute had been piled up since the 1920s.

I spent three nights there.

Cross-checking soil composition in western Texas, geological data from the Permian Basin, and pipeline construction cases from the 1970s.

Every time the numbers clicked together in my head, I couldn’t help but marvel.

This wasn’t just a proposal.

I had gone to the professors in Harvard’s Department of Earth and Planetary Sciences for advice.

One professor specialized in the geology of the Permian Basin; the other was an expert in pipeline mechanics from the engineering college.

After reviewing the drawings, both of them had reacted the same way.

They said that in 1972, it was rare even in academia to find a case where thermal expansion coefficients and soil thermal conductivity had been calculated to this level of precision.

They even said it was the sort of work that should have been published as a paper.

Once I’d built up enough background knowledge, I needed verification from people with field experience.

Through Winthrop, the Harvard alumni trustee, I was introduced to veterans from the Texas oil industry who had actually laid pipelines in the field.

One had spent twenty-five years as a field engineer at Texaco.

Another had been a former pipeline superintendent at Shell, overseeing offshore pipeline construction throughout the Gulf Coast.

After studying the blueprints for a long while, both men were stunned.

They told me the preventive maintenance system described here was the kind of cutting-edge concept the industry was only now starting to try to adopt.

They couldn’t believe someone had thought of it twenty years ago, and said that if the designer were still alive, they’d want to bring him in immediately. One even said it made him want to come out of retirement and go back into the field.

The conclusion was obvious.

The method Paul Hemsworth had proposed twenty years ago was still good enough to put the industry ten years ahead if it were applied today.

In other words, this man had already seen thirty years into the future back when he wrote it.

I tapped the red marks on the blueprint with my finger.

“You calculated the topography around Midland, seasonal surface temperatures, and the soil’s thermal conductivity to predict the pipeline’s contraction rate. Based on that, you marked in advance the stress concentration points and established a preventive maintenance system that checks only those sections before trouble starts. It’s brilliant. If applied ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠right now, it would put the industry’s technology a decade ahead.”

“Y-you understood all that?”

“Yes. I’m studying the development of oil fields at school, so I’ve been getting advice from alumni experts in related fields. If we operate the distribution network according to this design, I think annual maintenance costs will drop by more than 40 percent compared to the current system. The margin of error is under 0.1 percent, too. I can hardly believe it was rejected for lacking marketability. Was Vernon blind?”

“······”

Paul had lost the ability to speak.

That was only natural. For twenty years, no one had recognized the value of his work, and now a young owner saw straight through it with perfect clarity.

I asked him, “What is your current salary?”

“······Eight hundred dollars a month. Vernon cut it under the pretense of a disciplinary reassignment.”

For one of the company’s founding contributors, that was absurdly low.

I said nothing. I simply took a checkbook from inside my coat.

“As of today, your annual salary will be set at 150,000 dollars.”

“!?”

Paul’s face twisted in shock, but I didn’t stop there.

“And this is...”

The nib of my fountain pen slid across the check.

I wrote the amount, tore the check free, and pushed it toward him.

700,000 dollars.

“W-what is this, Chairman?”

Paul looked back and forth between the check and my face.

I answered, “That’s the salary you were unlawfully denied over the past three years, paid out in a lump sum. It’s also the signing bonus for the projects we’ll be doing together from here on out.”

“If I may be so bold... isn’t there a mistake in the number of zeroes, Chairman?”

“I don’t make mistakes when it comes to money. So no, there isn’t. Not now, and not ever.”

Slowly, Paul took the check in both hands.

Then, in a trembling voice, he asked, “What would you like me to do?”

It was about time to get to the point.

I spread a map of Garden Queens out in front of Paul.

Then I pointed the tip of my fountain pen at the house where my parents and I lived.

“Garden Queens. My hometown.”

“On the outskirts of Texas, yes. I know it well.”

“I found an oil field there. It’s on my private land, and...”

I paused briefly.

“I’m estimating the reserves at around 100 million barrels.”

“One hundred million barrels!?”

A field that huge was rare even if you searched all of Texas.

I gave Paul a brief summary of the situation so far.

“Up until now I’ve been extracting it on a small scale, just enough to get by. But now it’s time to develop it properly. Legally and technically, there’s no issue anymore.”

“You’ll need a great deal of infrastructure.”

Paul placed his hand on the map.

The tip of his finger moved slowly from Garden Queens to Midland and then on to Houston.

“First, the pipeline. The lines already in place were built in the early 1970s. After twenty years, every seam is likely showing signs of corrosion.”

He paused and looked out the window.

“...The winter of 1978, I think it was December. There was a rupture in the Odessa section.”

“That was before I was even born.”

“Yes. It was an early morning when the temperature dropped to minus 12 degrees Celsius. The metal contracted, the welds split, and 1,200 barrels of crude seeped into the soil. Fortunately, there were no casualties, but the environmental damage was severe. It took six months to restore, and the Environmental Agency’s fine alone was 800,000 dollars. The company suffered heavily too. I was on site that day, so I remember it clearly.”

“We can’t let an accident like that happen again.”

“Exactly. That’s why a full replacement is necessary. The initial investment is high, but in the long run it’s far more economical than suffering a single major accident.”

I nodded.

Paul’s fingertip moved to the empty space between Garden Queens and Midland.

“And from here to Midland, it’s about 40 miles. We’ll need to build a new spur line. The problem is land ownership in between. We’ll have to cross two ranches, three abandoned farms, and one railroad property.”

“So we’ll need to negotiate land use rights.”

“That’s right. With a capable lobbyist, it could take six months. Without one, it could take two years. Some landowners may flatly refuse to negotiate at all.”

“What about the drilling facilities?”

“For reserves on the scale of 100 million barrels, a single well won’t be enough.”

Paul picked up a pen and marked three points on the map.

“At minimum, we’ll need to run three wells in parallel. Each well will need a pumpjack, and we’ll also need three-phase separators to split the oil, gas, and water.”

He fell briefly into thought, then added, “And there’s one more important thing: initial reservoir pressure. At first, the crude rises by natural pressure alone, but as barrels are pumped out, that pressure drops. Once you extract around 10 to 15 percent of the total reserves, natural pressure won’t be enough to bring any more up.”

“That’s when secondary recovery starts.”

“Y-you know that too?”

“Of course. Unlike Vernon, I’m not blind to practical matters. Waterflooding or gas injection—you maintain pressure artificially that way. Which method is best depends on the reservoir structure.”

I answered calmly.

Paul’s eyes shone as he continued, “If the new chairman is this familiar with the practical side of the business, our conversations will move quickly. If the Garden Queens formation is sandstone-based, waterflooding will be effective. If it’s limestone-based, gas injection is better. We’ll need geological survey results before making the final call, but either way, we should set the injection wells during the initial design stage. If we add them later, the cost will triple.”

He drew a few circles on the map.

“Injection wells here, production wells here. That layout will keep the pressure evenly distributed.”

“What about storage tanks?”

“Ah, absolutely. Of course they’re essential!”

At my question, Paul answered quickly.

“There’s always a time lag between production and shipment. If you don’t have buffer stock to hold when prices are low, you’ll be forced to sell at a loss every time. Do ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠you know why all these small drillers around here go under? They pull up plenty, but they have nowhere to store it, so they dump everything at that day’s market price. Then if oil prices crash, they’re ruined on the spot.”

As experts, we spoke the same language.

Paul seemed to feel the same way, because the heat in his voice grew stronger.

“We can’t leave out the refining facilities either. If you sell crude as-is after pulling it out of the ground, you’ll get eighteen dollars a barrel—twenty if you’re lucky. But if you fractionally distill it into gasoline, diesel, kerosene, and asphalt, the added value triples. Whether you have refining facilities or not makes a world of difference, even when you’re selling the same oil.”

“Ah, I know that all too well. I’ve already had good experience gathering up ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠and selling the leftovers after refining crude. The income’s been pretty nice.”

“Hahaha—exactly! In the end, the quality of the refining facilities decides the life and death of a drilling company.”

At last, he swept his hand across the whole map.

“If we have those five elements in place, then from the moment oil comes out of the ground to the moment it reaches the consumer’s gas tank, we can control every stage ourselves.”

Vertical integration.

From upstream extraction to midstream transport and storage, then down to downstream refining and distribution.

Small oil producers usually handle only extraction and outsource everything else.

Once you pay the pipeline company for transport, the refinery for processing, and the gas station chain for distribution margins, all that’s left from a barrel of crude worth twenty dollars is maybe three or four dollars.

The rest goes straight into the pockets of the middlemen.

But if we owned every stage ourselves, the story changed completely.

We’d collect every cent of the middle margin.

That meant not three dollars a barrel, but fifteen, twenty.

And on a 100-million-barrel field, how much would that difference amount to?

I didn’t even need to calculate it.

Paul’s eyes were sparkling brighter than ever.

The image of the quiet, shabby old man who had been sitting here a moment ago was gone without a trace.

The man in front of me now was the veteran who had designed Texas’s pipeline distribution network twenty years ago.

I made my decision.

“I’m entrusting full authority to President Paul Hemsworth. Please develop the Black Bog oil field in Garden Queens.”

“······”

Lee Energy was the parent company, and King Baboon Pipeline Services was a subsidiary.

It was only natural for the parent company to funnel solid work toward its subsidiary.

After a long silence, Paul slowly stood from his seat.

Then he bowed to me at a perfect ninety degrees.

“Leave it to me. I will certainly live up to the chairman’s expectations.”

At last, it was time to pump crude from the black bog of Garden Queens.

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