The New York herald., 1921-01-16
What Cheaper Oil Means.

Now that reaction has overhauled
the shipping industry and other lines
Of endeavor where Oil fuel figures as
a competitor of coal, the folly of un
scientific and wasteful consumption
of our oil resources is being force
fully driven home. The cost of power
extracted from petroleum at the rate
Of 36,000,000 heat units to the ton of
oil, entailing an outlay of $40 to
$50, seemed reasonable enough some
months ago when coal was selling in
some markets as high as $40 a ton
and in none at less than $40.
But to-day, with coal selling at q
So minimum and about $2J maxi
mum, the same 36,O00,O00 heat units
which used to cost from $40 to $50,
whether produced by oil or coal, can
be obtained from coal at about one
half that cost, while the cost Of the
same units obtained from oil burned
under steam boilers has declined only
small percentage from the high
price q G.5
The natural result of this has been
TO awaken healthy curiosity in many
quarters, even though only remotely
connected with the oil industry, be-
cause everybody believed the demand
for oil would always exceed the sup
ply, and there was speculation on how
short supply could possibly be dis
tributed at price that would permit
oil consuming ships and land enter
prises TO compete with those consum-
ing coal.
UntiN last week the oil situation
was In deadlock, and as In all dead
locks something had to give. In this
case it was the price of crude oil.
Pennsylvania crude declined 35 cents
a barrel to S5.75, and a proportionate
decrease was recorded In other high
grades like Somerset, Cabell, Gushing
and Corning. This decline in high
grade oils might be thought to. indi-
cate that, even IL few months ago
the demand had seemed far beyond
the supply. better methods of combus-
tion had increased the efficiency of
oil and made the supply reach fur
ther. But this is hardly the case.
Instead of heralding conservation,
the declining prices are only the para
doxical evidence OF our lack of wise
conservation.
If the world were thoughtful
enough of the future to take its 600,.
100000 barrels or 100.0OO,0O0 tons of
oil each year and, instead of getting
out of 1t only 36,OO0,0O0 heat units
to the ton by squandering it in oil
burners under steam boilers, were TO
extract every ounce of energy out OF
IL by using economical internal COM
bustion agencies, then It might be as.
sumcd that what the drill In the field
could not accomplish to increase the
supply efficiency In the engine room
had done, and that falling prices were
the result.
But the demand for oil is as much
greater than the supply to-day as
ever--or II would be as much greater
than ever II II were not for the fact
that when the 1OO,O00,0Oo tons of oil
comes In competition with the 1900
100000 tons Of coal produced annu-
ally In the world, coal wins the battle
because OF sllpshod and thoughtless
waste of about two-thirds Of the
power in the oil.
The reduction In coal prices brought
about just such a competition be-
tween coal and oil. Only four things
could happen: consumers must con-
vert back to coal, they must lay up
their ships or close their factories,
wasteful burners and appliances must
be abolished 10 conserve oil and get
more power out of fewer barrels, or
else oil prices must come down.
Some consumers may have con-
vertcd back to coal Some did lay MP
their ships and close their plants.
There was some sensible conserva-
tion, albeit too little Of the kind that
would enable oil consumfrs to pay