GTR Oil Series, Part 18

CLEAN CUISINE: During the decades of the 1940s, 1950s and 1960s ONG sponsored cooking shows on local television stations touting the benefits of using clean burning, efficient natural gas.

Courtesy ONG

Editor’s Note: This article is the 18th in a multi-part series about the past, present and future of the oil industry in greater Tulsa and throughout the region. The series began in Mid-June 2005 and has been published monthly since. The series is available on this web site.

In the early days of the Oklahoma oil boom, producers placed little value on natural gas even though in other parts of the country natural gas usage was in its infancy lighting homes and heating materials. The focus was on the abundant liquid black gold that could be poured into containers on wheels and rolled to market. Natural gas, on the other hand, though a very efficient energy source, was elusive and required a sizable investment in infrastructure to transport the invisible commodity to market. Consequently before WWII much of the natural gas discovered in the oil patch was burned off or, as was often the case when drillers struck gas wells, they were sealed and abandoned. There was little demand for cheap natural gas and little inclination to create the systems necessary to deliver it to end-users and make it a viable consumer commodity. In Tulsa, that would all change in part due to two transplanted Pennsylvania oilmen who understood the market potential of natural gas.

In 1903, James M. Guffy and J.H. Galey constructed a 2-inch pipeline connecting a well north of Tulsa to a local brick factory. Subsequently, a line was laid from the rapidly developing Glenn Pool. The success of these ventures paved the way for Guffy and Caley to receive a franchise to distribute natural gas in Tulsa to serve approximately 400 potential customers. In two short years Guffy and Galey sold their gas company to Glenn Braden and T.N. Barnsdall along with more than 150,000 acres of leases in the Osage Nation. The stage was set for the founding of an Oklahoma utility giant.

On Oct. 12, 1906, Dennis T. Flynn and Charles Ames joined Braden and Barnsdall to form Oklahoma Natural Gas Company (ONG) to supply gas to newly formed Oklahoma Gas and Electric (OG&E). The new company, headquartered in Oklahoma City, began a series of small company acquisitions and expanded its market base to 29 Oklahoma communities including fast growing Oklahoma City and Tulsa. By 1922, ONG owned and operated 1,000 miles of pipeline supplying 65,000 customers in 43 Oklahoma communities.

The business savvy of ONG’s management resulted in the company growing into an attractive target for acquisition. ONG was purchased in 1926 by a New York City holding company that consolidated its operations with other holdings and renamed the new enterprise Oklahoma Natural Gas Corporation and then moved the headquarters to Tulsa. In 1935, divestment legislation at the federal level resulted in a company break up and ownership of ONG reverting back to Oklahomans. Over the next four decades, ONG continued to acquire additional distribution and production assets always focused on growing new markets and increasing its capacity to serve customers. In 1983, ONEOK was formed as parent company for ONG and its stable of subsidiaries to create one of Oklahoma’s largest publicly traded corporations.
From the beginning, the ONG business plan was rooted in an unwavering trust in the market viability of clean burning, efficient natural gas along with the belief that marketplace acceptance would continue to grow as customers increasingly realized the inherent values of using natural gas for everyday living and manufacturing. To that end, the company maintained high profile visibility in the markets it served aligning itself with its customer base through effective marketing, public relations and community involvement. As early as 1948, local television featured a cooking show called “Menu Magic” sponsored in part by ONG. Other such programs would follow. In the 1960s ONG promoted “Blue Star Homes” to encourage homeowners and builders to demand natural gas appliances. These and other marketing ventures helped maintain and grow the demand for natural gas and effectively grew the company’s market base. At the downstream end of the market chain, ONG has continually driven up demand through marketing. All the while the company has increased its access to gas reserves and distribution infrastructure upstream to meet that demand.

One hundred years ago, a few enterprising men took the little valued commodity of natural gas and with vision and business acumen began building a company that stands today as the eighth-largest consolidated local distribution company in the United States serving more than 2.5 million customers with over $3 billion in assets. In 2000, ONEOK made the Fortune magazine’s list of the 500 largest companies in the United States. A fitting position for a company that has stayed the course of providing exemplary, unwavering value and service to its customers.

Updated 11-21-2006

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