The San Francisco call., 1910-06-08
OIL MEN TACKLE
TWOBIG PROBLEMS
Independents Take Steps To=
ward Storage and Market
ing of Surplus Product

The independent producers have
tackled the two biggest problems now
before them-storage and marketing
The task of bringing into the agency
the big men of the business has been
completed, the list including such ex-
tensive operators as Doheny &c Barne-
son.
Storage and marketing remain to be
perfected. L. P. St. Clair, president of
the agency, summarized the situation
when he said:
I'VE want oil in storage The man
who gets the best contracts in the fu-
ture will be the man who can show
what he can deliver-not now, but In
one or two years from now. That will
enable him to get the pick of the con-
tracts. Big consumers will willingly
pay 10 cents a barrel more for oil if
they can rely on assurances of delivery.
If we provide sufficient storage to do
this, we will have the advantage over
our competitors"
WIDER MARKET NEEDED
This statement was made by ST. Clair
in reply to the suggestion that the
wells be capped until the demand could
be brought UP to production. This has
been the enforced policy during the
corporations have been in control of the
industry in the state. The stand of
the independents is naturally the re-
verse of that of the selling corpora
tions. The independents will prosper
best under a widening market. The
monopoly could regulate its supply to
its narrow market by depressing prices.
With big amounts in storage the in
dependents will be able to go to the
users of coal and guarantee a sufficient
supply over number of years--enough
to warrant the coal user in going to
the expense of installing oil burning
equipment. This is the work of pio-
neering in market building.
FOUR CENTS FOR STORAGE
1t has been estimated that the oil
can be stored for 4 cents a barrel.
There naturally will be a certain per-
centage of loss through waste. eyap-
oration, insurance and interest. A plan
is under way for the issuance of stor-
age certificates, upon which operators
may borrow money from the banks on
the petroleum in the tanks.
To take care of the excess oil a stor-
age company will be formed as an ad-
junct of the Producers transportat tion
company. Beside the tanks in the field
immense reservoirs will be provided a
few miles from the sea. Contracts al
ready awarded call for a capacity of
some 100000 barrels. These reser-
voirs will ultimately be made capable
of holding 100000 barrels The tank
age will be increased with the ultimate
view of providing throughout the state
facilities for 25,000,000 barrels
of oil for the independent operators
This is not such a great amount as
might appear at first thought. It is so
insignificant when compared to, the
storage of coal that it must be evident
that nothing unusual is being at
tempted.
MAY INVADE EAST
To contract for oil In quantities it is
necessary to have it above ground.
With a growing supply on hand the
independents are beginning to stretch
their markets. Chile has been found
a ready purchaser above the amounts
It already takes. The northern rail-
roads have come into line. There is
now some thought of introducing Cal
ifornia oil along the Atlantic seaboard
in direct competition with coal The
Union oil company has a pipe line
across the isthmus and ships to carry
it on either ocean.
The present production is roughly es-
timated at 100000 barrels day. The