Graham,
This gets more and more interesting as we dig into this. Gramps being a unique operation there are a lot of things that could be different from standard oilfield practice. However, there is the possibility that he leased the tank cars both to lower his transportation costs and to provide storage in Alamosa. I know of operations where the oil producers also own the oil trucks that transport to the refinery or the pipeline. The oil still transfers at the lease to the trucking subsidiary, and then again to the refiner at the refinery, but the transport costs are both lower, and go back into the pocket of the producer. If Mr. Hughes and not the refiner built the pipeline, then transfer of custody would to made at the lease to the pipeline (owned by him and paid by him to transport the oil to Chama), then at Chama to the tank cars (some of which were leased by him) and then finally to the refinery. To do it this way would have been his choice to cut the transportation costs and basically pay himself for transporting his own oil. At a production rate of 1000 BOPD this actually looks to be an attractive proposition.
I believe that there were more tank cars than just the 20 that were leased by him to use, which suggests that he leased them simply to cut the transportation costs, not that he "owned" the oil in the cars.
A lot of this is covered by state oil and gas laws, as to how custody is transferred, and who pays severance taxes and when they are applied, so the whole thing can get quite complicated. Even in the largest fields that I have been associated with as an independent, only once did we attempt to get involved in transportation, and it got most interesting so we simply bit the bullet and paid higher costs to transport, rather than making the large investment required to become our own transporter.
