The Interstate-70 corridor stretching from Denver to the western side of the Rocky Mountains has become one of the fastest growing areas in Colorado. That expansion shows no sign of letting up.
Some of the best known resort areas (and scenery) in the Rocky Mountain region — including Breckenridge, Copper Mountain, and Vail — are accessible from the highway. Beyond the western range of the Rockies, I-70 cuts through Glenwood Springs and Rifle on the way west to Grand Junction.
Economic driving factors across the region include tourism, agriculture, and energy exploration and production. In fact, energy activity is booming due to high oil prices. All of this means more people and businesses are swarming to the area, and that is good news for such petroleum marketers and haulers as Swallow Oil Company.
“This area contains a vast amount of oil shale, and we are seeing renewed effort to tap that petroleum source,” says Kirk Swallow, one of the owners of Swallow Oil Co. “Geologists tell us that there is more oil in our shale than in all of Saudi Arabia. Activity in the natural gas fields in this area also has picked up.
“We can sense that we are on the edge of a tremendous new energy boom. We're selling more diesel than gasoline right now. In fact, we're selling more diesel now than in the history of our company, and we know it is because of the oilfield boom.”
The company history dates back 57 years to 1951, the year Ray Swallow (Kirk's grandfather) bought a small Colorado jobber with a single service station in Rifle. At the time, he was a salesman for Phillips 66.
Other family members joined the company in the following years. Gary (Ray's son and Kirk's father) became a fulltime employee in 1957. Kirk and his brother, Kris, grew up with the business and started driving tankwagons for Swallow Oil in the late 1970s and early 1980s. The fourth generation of the Swallow family is coming on board.
“We're confident that the outlook is good for continued family involvement in this operation,” Kirk says. “My son Nick is dispatcher and my daughter Katie is office manager. Kris' sons Ben and Cory handle maintenance and drive a bobtail. We've brought in a consultant to help us with generational succession planning.”
Swallow Oil grew steadily over the years and now serves a market that stretches east on I-70 to Vail and west to Grand Junction. The company also serves customers as far north and west as Meeker and Rangely.
Swallow Oil operates four of its own c-stores and supplies c-stores belonging to seven other dealers. The customer base also includes medium-sized commercial and industrial accounts and some agricultural accounts.
“We're adding a fifth c-store in Parachute (about 12 miles west of Rifle) that should be operational before December,” Kirk says. “Located on 2.5 acres, it's going to have plenty of room for cars and trucks. We'll have separate truck lanes for diesel. We're putting in three wash bays for cars and trucks.”
In addition to the c-stores, Swallow Oil has a fuel distribution operation. The petroleum marketer has two bulk plants — one in Rifle and the other in Eagle (about 60 miles east on I-70). The plants handle gasoline, diesel, and packaged lubricants. The Rifle bulk plant has 79,000 gallons of storage capacity, and total capacity at the Eagle facility is 64,000 gallons.
Tankage currently is above ground, but that could change in the not-too-distant future. “We plan to shift to underground storage tanks, probably starting in 2009,” Kirk says. “We believe we need to do that to comply with the (Environmental Protection Agency's) Spill Prevention, Control, and Countermeasure program. Putting storage underground also will give us more parking space at the bulk plants.”
Swallow Oil supplies its two bulk plants and four c-stores, as well as other customers, with a fleet that includes three transports, a truck-and-trailer unit, and three tankwagons. The transports haul refined fuels out of terminals in Denver and Grand Junction. The tankwagons provide commercial and industrial accounts with a variety of services, including contract refueling.
The transports typically haul two to three loads a day, and the tankwagons are operated on 10-hour shifts. “We've done about as much as we can to optimize our transport activities,” Kirk says. “Traffic is always a challenge along the busy I-70 corridor. In addition, winter weather can pose serious problems. All hazardous materials loads must go over Loveland Pass, which is sometimes closed due to bad weather.”
Distribution activities are handled by a team of nine drivers. “We'd like to hire more drivers, but it has been difficult due to the strong economy in this area,” Kirk says. “We'd like to slipseat all of our tractors to maximize productivity. Currently, only one tractor has two drivers.”
Swallow Oil also employs another 45 workers at its bulk plants and c-stores. One of the biggest challenges faced by the petroleum marketer was developing a solid, comprehensive, uniform management program for those employees.
“We're a small company, and we needed help developing an up-to-date employee handbook,” Kris says. “We joined the c-buying program several years ago on the recommendation of Conoco Phillips, and we turned to the CBC HR411.com program for help in our human resources responsibilities.
“Ted Wojcik is the consultant who helped develop our employee handbook and spent several days on-site with us to determine our needs. The handbook he helped us assemble was customized to cover all of our employees and references relevant to Colorado regulations. Consultants at HR411.com always are available to offer help and advice.”
Swallow Oil also turned to another consultant — Mike Stookey with MJS Safety LLC — for help in developing a driver safety program. “Mike helps us keep up with driving regulations, and he conducts our monthly safety meetings,” Kris says. “We think it makes sense to contract out specialized functions that would be expensive with a fulltime manager.”
Consulting services (specifically HR411.com) aren't the only benefit of the c-buying program, though. Swallow Oil also receives a rebate with the purchase of every new Kenworth truck and tractor.
Swallow Oil runs only Kenworth tractors, all three of them long-nose W900s. For tank trucks, the company runs one Kenworth T800, two Freightliners, and one International.
“We believe Kenworth builds a very competitive tractor,” Kirk says. “All of our tractors are daycab models, and the newest has the extended daycab.”
The petroleum marketer has standardized on the Cummins ISX engine, which is delivering fuel economy of six miles per gallon. Tractor engines are rated at 600 horsepower, and the tank truck power plants are set for 565 hp. Eighteen-speed transmissions are specified in all of the trucks.
Image is important at Swallow Oil, and the tractors have plenty of chromed hardware, including bumpers, sun visors, air cleaner, and aluminum disc wheels. Drive wheels have been fitted with an automatic chain actuation system to improve traction on icy roads. Blackmer product pumps are used on all of the tractors and trucks in the fleet.
Tank semi-trailers used by Swallow Oil have a 9500-gallon capacity. Swallow Oil runs three 4500-gallon tank trucks and one with a 3,000-gallon capacity. Trailers and truck tanks are supplied by Beall Corp.
Five-compartment tanks give Swallow Oil the ability to deliver unleaded regular and premium gasoline and diesel in a single shipment to a c-store. Hardware includes Emco Wheaton API adapters and a digital additive injection system from Great Plains Industries.
“The additive is for the diesel we market,” Kirk says. “We've begun using Primrose, a premium diesel fuel additive. It improves lubricity, which is important because ultra low sulfur diesel is very dry. The additive also acts as a pour point depressant and a cetane booster.”
The trailers are painted a bright red that matches the tractors. “We paint the trailers to save the aluminum tank from the magnesium chloride that is used to control ice and snow on the roads during the winter,” Kirk says. “The Colorado Highway Department uses a lot of mag chloride on I-70. We also believe that painted trailers are easier to keep clean.”
The bright red tractors and trailers certainly stand out along Colorado's I-70 corridor. The transports serve as a daily reminder that Swallow Oil is steadily expanding its presence in the fast-growing market.