Evening star., 1922-11-08
CALIFORNIA STAGES
FIERCE OIL WAR
Small Leasers and Produc.
ers Battling for Lives
! Against Big Companies.
BY J. &. ROYLE.
Special Dispatch to The star.


NEW YORK. November S.-A despe-
rate battle is going on thousands OF
feet underground in California that
only the combatants know about. but
which. nevertheless. is affecting
every angle of one great basic indus
try of the United States-oil. 1t Is
the old battle of the small leaser and
producer against the big companies
rhat has marked scores of other IN
dustries in the west.
Crude oil is down. That is the basis
of hostilities. Producers all over the
United States from Pittsburgh 10
bakersfield, with all the territory be-
tween, are striving to reduce produc-
ZION. Reserve stocks have mounted
until they represent over five mouths
supply for full capacity operations by
rehneries. So great are the stocks that
tanks no longer conflne them. They
are in earthen reservoirs from some
of which rains have loosed their con-
tents upon surrounding territory with
disastrous effects.
California an Exception.
Production could be reduced ex-
ever. is producing from IS to so per
cent of the entire flow of oil In the
United States and there the now
IS increasing rather than diminish.
ing. California producers declared
today they could not check produc-
tion. This statement came from both
sides in the oil field war. and was
made in spite of a reduction of 90
per cent in the price of crude oil as
compared with last July. Elsewhere
producers are throttling down pro-
ducing wells. holding back develop
ment work and waiting for higher
prices, California will not. Why?
Offset wells" is the answer. The
santa Fe Springs. Long Beach and
Huntington Beach oil fields were dis
covered. Independent oil companies
and holders of short time leases
rushed in and secured control of
prolific ground. They could not wait
for future profits. according to state
ments by Independent operators to-
day. Their leases prohibit that.
They must make hay while the leases
shine. They drilled wells and un-
covered fields second in richness to
none In the state.
Reason for Competition.
The output for those wells alone
would not have changed the situa-
tton materially. but the older estab-
lished companies with large holdings
IN those same fields could not remain
idle in the face of this activity. To
do so was to see the oil dra med from
their land into the borings of the
leasers and independents. For oil.
like water, seeks both its level and
its outlet
As a consequence. the esta blished
companies drill"d offset wells to
direct the drainage into their own
duCing over - per cent of the crude
oil of the United States and 80 per
cent Of that amount is coming from
tie Santa Fe Springs. Long Beach
and Huntington Reach FIELDS.
In other sections where production
haS adjusted itSelf--in Kern river,
Coalinga. Montebclio and other dis
tricts-production has been cut down
until th.y are furnishing but one
eighth of the 'ountrys output.
Many Gushcrs brought In.
The Increased production in the
lease owners" Il &. COLON. head of
tn" state petrol unl bureau. said to-
day These ledS-rs have put down
wells on their small holdings and
have brought in custers. This has
compelled adjoining holders usually
wells.
Many of the leaseholders' wells
have resulted in production of from
90" 70 5000 barrels IA day. In or
der to keep oil from being drained
tom un4". tneir own property. ad-
joining holders haV- drilled wells
and brought in gushers.
notwithstanding the excess of pro-
duction. the little fellow s. have
found a ready market. The falling
off in Mexican output has resulted in
demand for California fuel oil on
the Atlantic coast.
Prices Twice Reduced.
Tankers are rushing California oil
to the east by the Panama canal
california prices have suffered two
sasheS Of 25 cents barrel each
since July. but a third reduction has
not materialized. due to this demand
on the Atlantic seaboard and to the
call for fuel oil from the orient.
Meanwhile scores of new wells are
going down, new gushers are being
brought in in nrW fields. offset
wells are cOunttrinG and the war
goes merrily on. undisturbed by the
plants for peace from the midcon-
rinent field. Tevas. Arkansas, Okla
homa. Louisiana, Dhio. Pennsylvania
and the Wyoming districts. Another
cut of 25 cents in Snlackover, crude
oil was announced today.