The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1910-04-21
GREAT HAZARD IN
THE OIL BUSINESS
Words of Rockefeller Quoted to
Show Dangers That Beset
the Industry
BY CHARLES p. FOX.
Editor California Oil World

If John d. Rockefeller's hope of sal
walton depended upon the truth of his
statement that the business of oil is
hazardous business" he could read his
title clear to a mansion in the skies.
Nothing truer was ever said. There is
hazard in the business of oil in all its
branches. from the initial steps of pro
duction to the final delivery of the
crude or the refined article.
Because of the hazard, those enga ged
in the traffic demand and must be paid.
large profits where the transaction is
complete. The high percentage of loss
must be made up for, otherwise there
would be none to take the extra Ordi-
nary risk. Under the law of averages, it
is not wrong that $1,000 should be al
lowed TO grow into $1,000, 600 when ii
so frequently happens that a million
dwindles down to a thousand and dis
appears altogether.
Probably this could be prevented in
large measure were only those permit
ted TO enter into the oil business who
have an understanding of it, but that is
altogether out of the question, of
course, and it is not likely that any
campaign OF education of the public
would be of the slightest effect. mas
much as the curious feeling is extant
that any one, no matter who. can run an
oil company successfully. Real estate
agents, promoters, politicians bank
clerks, railroad officials and the like are
not as apt TO secure support for their
ventures in oil from the investing pub
lie as is an experienced operator who
appeals for funds. The result is that
only a small fraction of the companies
organized TO produce oil is successful.
and it sometimes happens that utter
ignorance, however well intentioned
not only is the cause of loss of stock
holders money, but that contiguous
leases and whole districts are DANA ed
to the extent of millions of dollars.
DANGER FROM WATER
This has been the case notably in
the older fields of California, where i'm
perfect drilling of wells has let water
into the oil formations. The heavier
liquid drives back the lighter out Of
the reach of the pumps, making utterly
valueless property which, under right
treatment, would have paid rich re-
turns for long period of years.
There is the hazard due to ignorance
of the practical side of oil production,
but those who are best acquainted with
the drilling of wells sometimes lose all
against every intelligent effort that
could have been put forth A well 2640
feet deep is a hole half a mile long
To dig that hole deeper, through rock
caving sands. shelving shells, sticky
clay, against a gas pressure at times
of 1000 pounds TO the square inch, is
a difficult undertaking, to say the least,
and a risky one. Companies have been
known to fish for two years for a string
of tools lost in the hole.
WHISKY CAUSES LOSS
mile deep hole in the Kern river
field is enectually plugged at the bot
tom with a string of casing which
dropped three quarters of the distance
when being lowered The breaking
of pin in the block at the top of the
derrick let this immense weight fall,
and $4,000 vanished in fash 1
recall an instance of bottle of whisky
being sneaked into a rig. More than
$4,000 was expended before the eff
fects of that whisky passed away.
To say nothing of the chance of not
being located in a region where oil is
to be obtained, there is unusual hap
hazard in oil Everything must work
right. Men must be well trained and
of such character that they will do
their utmost. Machinery must be strong
beyond the breaking point. Formations
must be of a nature admitting of pen
etration Castings, cables, bits, stems,
must be without flaw. Good luck, too
must attend.
Mr.. Rockefeller did not commit per-
jury when he declared on oath that the
oil business is a hazardous business