January 2010 Vol. 237 No. 1

Features

Transportation & Stringing: Pipeliners Cant Leave Home Without It

There are so many essential aspects to any pipeline construction project. One of the most critical, yet overlooked, responsibilities involves moving the thousands of tons of finished pipe from the steel mills to the construction site. This process includes arranging the mode of transportation – truck, rail, barge or ship – and securing, leasing and maintaining pipe yards and rail sidings.

Then there’s the actual work of loading and offloading, racking, storing, hauling and finally, stringing the pipe together on the project right-of-way – usually in some of the most difficult-to-reach places – before the welders move in to link the joints together before they are lowered into the ditch and backfilled, never expecting to be seen again.

Dun Transportation & Stringing, Inc. of Sherman, TX, is celebrating its 100th year of being a key conduit in the pipeline construction process. Dun is one of the few major transportation and stringing companies still active in the United States on a turnkey basis. The work is often taken for granted, but major transmission pipelines could not be built without companies such as Dun.

Dun employs nearly 200 employees in five states and operates without geographical limitations in the U.S. Adding to the company’s unique status in the industry is the fact that Dun has remained within the family for these 100 years and is likely to stay that way well into the future.

It is quite legacy they will inherit. The company has delivered more than 75,000 miles of pipeline since 1910, more than any competitor. Dun says it employs a fulltime safety director and all of its foremen are trained in first-aid and CPR plus AEDs are located on all job sites along with trained personnel.

A little history: the Dunn Company was first founded by Allen Dunn, who began a freight service hauling livestock and buffalo hides from Comanche County to Galveston by oxcart, bringing dry freight back on the return haul. The start of the oil boom in Texas in 1900 created an immediate need for teams of oxen and mules to carry supplies to the oil fields. Hence, a new business – what came to be known as Dunn Bros., Inc., was started in Ranger, TX in 1910 by Allen along with two of his sons, Robert and Carl. Even today, the company is still commonly referred to as “Dunn Bros.”

According to the company history, Robert and Carl took over the business when Allen retired in 1917. They continued to use teams and wagons to service the oil fields until 1920 when they began using trucks to string pipe along the right-of-way. Pole trailers were developed as the Dunns foresaw a need for larger equipment and a speedier way of getting pipe to and down the right-of-way.

The company grew along with the industry, particularly during the 1930-31 boom when they worked on the Missouri Valley Gas Co. project, a predecessor of Northern Natural Gas Co. The Dunns were beginning to branch out around the country as pipelines tried to meet increasing demand for petroleum products. They and their crews received early training in learning to haul pipe through the most extreme conditions imaginable – ice, swamps, deserts, mountains, trails and roads that didn’t really exist, using whatever means of transportation was available – barge, truck, railcar, or even bringing mules out retirement when trucks were incapable of handling the terrain.

In 1935 the federal Motor Carrier Act was enacted and the name of the company changed to C. Hobson Dunn, he being another Dunn brother. Certificate of Convenience and Necessity MC 19416 was issued; the company still operates under this certificate.

The Dunns moved to Irving, TX in 1940 where they set up a maintenance and repair shop, not far from the company offices in the Magnolia Building in downtown Dallas. During the war, they worked on the historic Big Inch and Little Inch Emergency Pipelines. As a matter of fact, many of the most significant pipelines to be built in the U.S. have the Dunn imprimatur on them, including the first and second Kern River Pipeline projects, the Alliance Pipeline and the recently completed Rockies Express(REX) natural gas pipeline.

Ernest and Ellis Dunn were two younger brothers who bought the interests of the other brothers in 1945. In 1950, they incorporated and changed the name of the company to Dunn Bros., Inc. with Ernest elected president. A major accomplishment came in 1960 and was an industry innovation – development of the first telescopic self-steering pole trailer for the delivery of long pipe strings safely in traffic and on temporary access roads to the right-of-way. They also designed and built the first pipe saddles to handle difference size steel pipe.

Ellis died of cancer at age 66 in February 1973. Ernest continued to run the company until his death in August 1992 at the age of 91. In 1998, Gene Johnson bought the company from Ernest’s widow, Jewell, who was also Gene’s aunt on his mother’s side.

Johnson, now president of Dun (the name of the company was changed after he bought the company), began working summers for the company while a student at Dallas Baptist University where he majored in business management. A native of Fort Worth, Johnson often worked on his grandfather’s farm, so outdoor labor was already in his blood when he was approached by the Dunns to work on a Lone Star Gas pipeline job in summer 1967 in Corsicana, TX.

The next summer, the Dunns hired Johnson to work a job in Kentucky. When he returned to school, he worked part time in the Dunn office. In an interview with P&GJ, the affable executive discussed what made the business appealing to him.

“It was interesting and something different. At the time, the pipeline business was really going strong, even in the winter of 1968 El Paso was building a pipeline from Van Horn, TX to the California-Arizona border and the Dunns had all of that except for one section. A friend from college and I had a six-week break and went to Arizona where they were working seven 12-hour days. We never had a day off, Christmas, New Year’s, nothing,” he recalled.

After surviving that rigorous test, Johnson returned to Dallas where he continued to work in the Dunns’ office, becoming a full-time member of the company after he graduated college. Johnson also took courses in business transportation but in 1975 wanted to try something different and left the company.

In 1988, Johnson rejoined Dunn Bros., Inc. In his years in the business, he has seen more than a few changes evolve, particularly with equipment.

“The biggest change for us was the vacuum because we had always used motor cranes and side booms. When the vacuum came along, it first replaced the motor crane, but we kept our side booms awhile to string. Then we started stringing with the vac to the point where we’ve eliminated all of our side booms and motor cranes and now basically handle all pipe with an excavator and a vacuum.

“The trucks have all gotten bigger. In 1967, we were running a lot of 6-cylinder Internationals; now, most of our new Macks have the big 427 diesels in them,” he said.

He’s also watched how the role of a transportation and stringing company has changed.

“When we were regulated, we did a lot of work directly for the gas companies – even the stringing – because they had to be sure they had an ICC (Interstate Commerce Commission) carrier transporting their pipe or they could be fined. In the 1980s, the trucking industry was deregulated and the Contract Carriers Authority was established which allowed general contractors to handle stringing,” he said.

But instead of hurting business, working in the new unregulated environment was helpful because they now had the opportunity to directly deal with the shipper in deciding rates and the scope of the work. Being regulated, carriers received a price per ton to transport the pipe and then had to charge hourly rates for everything else, including stringing. Keeping in compliance with the paperwork was time-consuming, cumbersome and worked to no one’s advantage, Johnson said.

“That was probably one of the biggest changes for the stringing side of the business but it actually worked out for us because the contractors were so used to us stringing the pipe that they decided they would continue using us. But when we hit a very slow period in the ’80s, Dunn downsized considerably; then when work started picking up, Dunn couldn’t respond accordingly and many of the contractors began stringing their own pipe, so that changed things.”

Operators’ expectations of pipe haulers has also changed, he said. The multibillion-dollar Alliance Pipeline built in the late 1990s by a consortium of energy companies to carry natural gas from Canada into North Dakota, Minnesota, Iowa and Illinois, offers a prime example of a relationship increasingly relying on contractors.

“Alliance Pipeline was probably the biggest change. In November 1998, they decided all of a sudden that they wanted us to deal with the railroads, pipe mills, etc. It was going to be 900 miles of 36-inch pipe in the U.S. They essentially put us in charge of the scheduling and told us to just get it done, at first in 24 months. Then they wanted to know if we could do it in 18 months and we agreed. Then they wanted to see if we could get it done in a year. We finished the job in one year and one week. We did all of the unloading and stockpiling in the U.S. and the stringing on two of the U.S. spreads.

“Once they (Alliance) were comfortable with us, whenever we said what we needed to do or where we needed to go, that’s what we did. It became sort of an ongoing joke because the pipe mills had a hard time realizing that we were authorized to make these decisions on behalf of the operator,” Johnson said.

In the logistical challenges of dealing with a wide array of transport services, Johnson said working with the railroads has become especially trying.

“Over the years, they’ve continued to do away with sidings because they want to handle the big unit trains of cars or coal. It’s been a challenge for us to find a place to take this pipe by train to get it offloaded. We’re working on the Florida Gas expansion and have had all sorts of problems trying to find locations in Alabama, Mississippi and Florida to unload the pipe,” he said.

Alliance also posed some pretty nasty technical challenges for Dun crews.

“We were working in North Dakota in December when the temperature fell to minus 20 degrees with a wind chill of minus 50. It was harder on the laborers than anyone but we had twice as many as we needed so we let them take turns going in to warm up. We told them we didn’t care if they could unload one load of pipe or two because we didn’t want them to stay out there for any length of time. That was also a real challenge for equipment,” he said, adding that working in bug-filled swamps represents the other extreme challenge for crews.

In addition to unloading pipe for the 525-mile Florida Gas project, Dun has been stringing the Denbury pipeline which is nearing an end, and is stringing a project in Minnesota for Enbridge.

The Dunns did have a separate Canadian company until it was dissolved in the 1970s. During the 1950s they had quite a bit of work in Mexico, so much that Ellis picked up the nickname of “Pancho.”

Johnson said he has little interest in either working overseas or diversifying in case the pipeline business slowed down. Whenever they did think about diversifying, business invariably picked up.

Jewell Dunn, who began working for the company in the 1950s and maintained an active role, was ready to hand over the reigns by 1997 and after a year of negotiations were successfully concluded she sold the company to Gene. The timing was fortuitous because the massive Alliance project was getting under way and helped kick-start the new owner’s business. Johnson also thought it was time to move the offices from downtown Dallas to a site that would offer a more relaxed atmosphere.

He said he wanted workers to feel comfortable with their new management and made sure they understood there was an open-door policy. That quickly paid off with some new innovations.

“One idea they came up with was a turntable to put on a fifth wheel because with these steering trailers, steer tires on the trucks always wore out faster. We thought if we could make this work, it would take a lot of pressure off of those front tires, and it did,” Johnson said.

In his years in the business, Johnson has met an untold number of people who have left favorable memories, but none more so that Ernest and Jewell Dunn.

“One of the most valuable bits of advice Ernest gave me was shortly before he passed away. We had three good years in a row and then all of a sudden we weren’t getting any work at all. He advised me to always remember that we’re going to have peak years and that’s when you’ve got to hang on to your money because you’re going to need it when you have those valleys. That’s always stuck in my mind and I pass it along to my people because it is always going to get slow again.”

The second bit of wisdom Johnson acquired from his mentor was to respect everyone and treat them all the same, be they executive or field hand.

“Ernest was that way with employees and people in general. I watched him deal with the presidents of major natural gas companies like Tennessee Gas, Texas Eastern and El Paso, and the next day he’d be in the shop taking everybody out for barbecue,” Johnson said.

That legacy has helped the company last for a century.

“Whatever their word was, the Dunns were always good for it.” Johnson said. “They were very honest in dealing with the gas companies and contractors. We’ve continued that reputation. We’ve been approached to handle a lot of projects for companies that didn’t want to go out for bid. They wanted to work out a partnering arrangement so we could handle their projects. Obviously they don’t do that if they think we’re not going to take good care of them or if they thought we were going to gouge them. That’s always been our philosophy: if you say you’re going to do something you do it, and you do it for what you say you’re going to do it for.”

As for the future, Johnson said his company has a backlog of work that should keep crews busy this year but prospects for 2011 are uncertain. Most expect business to regain strength in 2012.

As for Dun Transportation & Stringing, Inc., the business seems likely to remain in family hands well into the future. Johnson’s youngest daughter, Jena Schafer, works for the company; vice president Matthew Muirhead is married to oldest daughter Julie and chief financial officer Mike Nunnenkamp is married to middle daughter Jodie.

Johnson also offers an invaluable perspective of the pipeline business, noting that some things never change, but others do.

“It’s a very close-knit group of people and if anyone really needs help they’re going to get it from somebody in the pipeline industry. In recent years there have been a lot more spouses that have gone along on jobs – such as REX – where women have become actively involved in helping the local communities. So the image of the pipeline workers has changed a lot. Back in the ’50s,’60s, even the ’70s they were known as kind of a rowdy bunch, but now when they go into a town most of the time the community is glad that they’re there,” he concluded.

For more information, visit www.duntrans.com.