The Morning Tulsa daily world. [volume] (Tulsa, Okla.) 1919-1927, 1922-08-13
In the Oil Fields

CONTINUED FROM PRECEDING PAGE
ing consumption. and II is simply
necessary that production be lessen
cd II we are TO have a sound eco
nomic condition restored to the in
dustry In the las, 2S days tho price
Of Mid. Continent oil has been re-
duccd rs cents per barrel. and it will
be further reduced unless the
amount Of oil which Is availa bic
FOR the big pipeline purchasers TO
receive and run into Btorngo can he
greatly diminished.
The first feature Of this pro-
gram. the shutdown feature ls
obviously sound. When there is
an overproduotlon OF any commodity
the price tendency ia downward.
ana the very obvious remedy ia
either the complete cessation or
the Curtuilmcut Of that commodity
until an economic balance has been
rc-estahlishcd In our Industry
the cessation Of production In I'm
possible We are obliged 10 pro-
tcct our wells by continuous Opcra.
tlon. liut we can nt least avoid In
very large part the commencement
OF new wells, until the condition
from which we suffer cnn be re-
lieVcd. ~ is impossible, because ~
the migratory nature OF oil and Bas
underground. to discontinue new
work absolutely Some wells have
10 be drilled, either 20 protect prop
critics against drainage or 10 per
form binding obligations created by
contract, upon which extensions
cannot be procured. But every pro-
duccr. if he ~ honest and frank
with himself aud rrg1rdml Of his
own business interests, can and WIFI
eliminate some wells. I venture to
say that concerted effort In good
faith on the part ot oil producers
TO shut down viii result IN the ELI
mlnntion of two-thirds of the wells
that would normally ho drilled
Every ol producer knows that In
the Continent field as least
10000 To goo, 900 barrels per day
OF current production Ia exceedingly
soft flush stuff, which la maintained
by constant and persistent drilling OF
the most extensive kind, and which
begins to subside at the very moment
when drilling activity slackens |
firmly believe that II tho normal
amount OF drilling can be reduced
as much as twO-thirds, a very few
months Will suffice to bring the
supply OF crude oil below the level
bf demand and create "A condition
OF underproduction that Will force
the large oil buyers to begin MAX
ing heavy drafts upon their acCum-
ulated storage: and when that hour
strikes. the crude oil market viii
enter upon long strong upward
swing and the Independent oil pro-
duccr win come Into the mos; pros
perous time that he has ever known.
Hand IN hand with the shut
down feature OF the program which
this meeting was called TO propose
Il the storing of OIL by Independent!
producers. 10 In re0lly the most
singular thing that, speaking gem
orally tho independent oil produc-
er has never thought to provide
himself with any facilities for stor-
ing HIS product. when one stops
to reflect upon II, the fact becomes
almost unbelievable. In no other
business OF which I know In there
such implicit reliance by the pro-
ducer OF commodity upon tho pur-
chaser OF II, since the average oil
producer has provided no storage
OF his own. hut has rolled upon the
benevolent disposition OF tho stan
dard oil company to provide facili-
tcs for storing his product, he has
nc margin OF safety. no factor or
elasticity, In his business, but Ia
cpmpcll He'd each day to choose be-
tween two alternatives, namely.
first. shutting IN HIS producing
wells, which Ia OF course unthink-
able, and second accepting the
prl.e which the Standard oil com
pany has declared Itself that day
willing 10 pay. l repeat, that In no
other Industry IN there such n COM
plete absence OF negotiation between
n buyer and seller regarding the
price OF which the buyer Is willing
to pay and the price the seller IL
willing to accept. Always In our
case, the buyer fixes tho price at
which the seller will sell. and the
seller sells at the buyers price and
has no practical alternative what
ever. In other words. the oil pro-
duccr always sells his product In
a buyers market and never has
the slightest voice In saying at what
price his commodity VIII bo sold.
IL the buyer because or his good
ness OF heart or because OF the
economic situation. elects to pay
what the seller regards as a favor.
able price, the seller is much elated
and doubtless considers himself a
very shrcwd business man. II the
buyer. on the contrary, elects TO pay
"A price with which the seller Is dis
satisf ed, the seller is loud In his
lnmentatlon. But In either case he
IL equally holplcsS; and heretofore
he has passed In this way from ella
tion to depression and from dcpres-
sion 10 elntion with little thought
how no could assert spirit OF in
dependence and self-reliance. and
emancipatc himself from this form
OF involuntary Servitude.
"And hat right after all has the
independent producer to expect the
standard OH company. or other
major oil producers. to provide Ia
cillues to take care OF his oil In
times OF over production, and 10 re-
frain at such times from applying
against him the law OF supply and
demand and paying n low price Tor
the commodity? The Standard Oh
company Is a business concern and
was not chartered as a philanthropic
enterprise and It has on the whole
shown great deal OF moderation
~ tempering the wind To the shorn
,amb. The proposal that is being
urged upon this meeting is that
every Independent oil producer pro-
vide hia own storage facilities, and
do 1t now In no other way can ht
establish for himself independence
OF thought and freedom OF action re-
gRrding the time when and the pric,
at which he will sell the oil that ha'
been produced by him in toll and
travail.