Contract ends on Dec. 31, so independents will have to market their own oil
For more than a century the small oil producers on the West Side have worked together to sell their contracts.
The "mom and pop" producers all belonged to the Independent Oil Producers Agency, which was formed in 1904, to sell the crude oil they produced on small leases that dot the Midway Sunset and small oilfields in Kern County.
That is coming to an end.
On Dec. 31,IOPA is disbanding.
It has no contract to sell its members' oil and no reason to exist anymore.
It's executive vice president, Les Clark Jr., is retiring after after nearly four decades as the face of the Kern County Oil Industry.
Fred Holmes, owner of Holmes Western Oil Corporation, a long-time IOPA member and currently its president, said the current contract holder served notice it won't buy oil through a contract with IOPA anymore, leaving each individual producer to market his oil on his own.
It's not related to the current slump in prices, just a change in the way business is being done.
"Since 1904 we've always had a contract to sell our oil to the majors," said Holmes. "That contract has ended and there's no further reason for IOPA."
There are five refineries that producers can market their oil to.
"It's a little inconvenient but not bad. We can handle it," Holmes said.
IOPA was formed on Nov. 3, 1904, Holmes said and it was in response to having to deal with the Rockefeller oil empire that controlled the rail cars and dictated the price the independents could get for their oil.
The small producers banded together and formed IOPA.Then, working in conjunction with Union Oil, built a pipeline to a terminal on the coast at Port San Luis near Avila Beach.
From there the oil was shipped north to refineries in the San Francisco Bay area "to get a fair price," Holmes said.
In the 1940s, IOPA turned over its interest in the pipeline to Union Oil in return for a 5-year contract to sell their oil to Union.
That contract was an "evergreen" contract that was automatically renewed for the next 70-plus years.In 2013, Phillips, which had obtained the contract from Union, told IOPA it would not be renewed when it expired at the end of 2017.
To say it's the end of an era is an understatement.
"There's a lot of history here," Holmes said. "As an agency, we had a lot of advocacy with Les Clark which we are dearly going to miss," Holmes said.
Clark joined IOPA as its executive vice president in 1981 after working 15 years at Belridge Oil.
"He's had a very nice career and did a lot for us and the oil industry," Holmes said.