The Washington times., 1923-08-16
HUGE INCREASE
IN USE OFO|L
RECORDED
1865. I'LL
Over-Production Emphasizes
Industry's Old Problems,
Declares Cousins.
BY w. s. COUSINS.
Copyright, 1928, by Cosmopolitan
NAwR SerVice)


important American oil fields is
Fastening the installation of addl'
tional mechanical equipment, chle1ly
storage facilities.
Retail prices of crude and rerlneo
oil products have receded as re-
suit of the heavy surplus or cruue
oil coming to the market, but leau'
ers in the oil industry are almost
unanimous in their statements tnat
no new problem has been INTRODUCED
by the present overflow from the OH
fields Of California, Smackover, IN
Mid Continent, and the Powell fleius
in Texas. It has only emphasized
existing problems. The lack or ace
quate facilities for temporary stor.
age of oil products awaiting con
sumption has been one OF the great
est handicaps to the petroleum IN
dustry. Seasonal production and con-
sumption of gasoline work; In har'
monious relationship, but the grow
ing consumption OF the winter sea
son has called for q tremendous IN
crease in storage facilities.
Pioneering Costly.
Anticipating the enormous demand
for gasoline and other Oil products
created by the perfection Of the in
ternal combustion engine, leaders IN
the petroleum industry have in re-
cent years directed their major ef'
forts to the discovery of new sources
OF this liquid power in every part OF
the world The pioneer work has
been extremely expensive, and the
statement is credited to President
Kingsbury OF the Standard Oil Com
pany of California, that his company
spent more than $40, 100000 before
a single, gallon Of oil rewarded its
efforts.
1t is significant that most Of the
prominent oil companies have erect
ed their refining plants near the sea.
boards, in close proximity to water
transportation. While the desire to
link up closely to the retail con.
Stunning markets has had an impor.
tant influence in determining these
seaboard locations, the expectation
of large importations Of crude oil
from every part OF the world has
been a factor of larger Significance.
Should the present domestic produc-
ton be maintained, or increased
however, some radical revisions may
be instituted in this department OF
the oil business.
In Position to "ShOp."
Perhaps never in the history OF
the industry have conditions so fav.
ored the big marketing companies as
at present. As the intermediary be.
tween the consumer and the pro
ducers and refiners of gasoline, they
are now in position to shop" for
the most advantageous buying con.
ditions. while holding their supplies
to the actual needs of the market
The statistical position of the oil
industry is tersely stated In the
periodic bulletins Of the American
Petroleum Institute. While consum'
ers compressed. with the large In
crease in domestic production, 1T is
important also to consider the ex'
pansion in the consumption of gas
oline and other Oil products.
In 1918 this country used approx
mately 412,0O0,0O barrels of oil;
in 1919, 400, 10000, 900; in 1920, $50,
900 900; in 1921, $4,000 900; in 1922
$50 900 900; and the indicated con
sumption for 1928, based on actual
records for the first half Of the year
is 692, 0OO, 900 barrels of oil. or nearly
two million barrels daily, including
Sundays.
Huge Production.
The latest compilation Of the in
stitute shows an indicated domestic
production and import of 83S, 900, OOC
barrels, leaving a surplus of about
146, 900 900 barrels, an increase Of SO
per cent over the same period last
year.
Such a situation might easily
cause considerable embarrassment
to the industry were no account TAX
en- of the constantly expanding ave
nues of consumption and the posi-
tive depletion Of a certain numb",
of oil pools and entire areas every
year.
Increased construction Of storage
reservoirs is the direct answer &c
the question of the desirability OF
conserving every possible barrel OF
oil that spurts through the earth's
surface. Considering that oil wells
give up substantially so per cent OF
their total production in the frs:
year and often 80 per cent, conserva
ton is a standard policy in the Oh
fields.
Oil companies operating in Cali
fornia have recently erected con
crete reservoirs with a capacity OF
three million barrels, and some hold
ing two and three-quarters million
barrels, while in another section
have been placed five tank farms"
! with capacity Of twenty million
,, barrels.