The Kevin review. [volume] (Kevin, Mont.) 1922-1929, 1924-10-30
FUEL OIL TO REPLACE
GAS AS MAIN FACTOR

heVleWlHS unsatisfactory OIL ITdu
conditions in the last three years
credited by popular belief to expan
sion and overproduction, Standard Oi
of New Jersey, in the Lamp, submit
the opinion that, while these are con
tributing factors, the true explanation
may be found in failure to recognize
a gradual evolution in which fuel oil
has replaced gasoline as the control
ing product.
eff this is the true explanation" il
says, then the much hoped for return
to normalcy within the industry will
be hastened by general recognition Of
the fact that fuel oil under conditions
as they exist today is the product that
governs the market price for crude
and its products"
Pointing out that the industry was
originally based on demand for kero-
sene, to replace cruder forms of light
ing, which was subsequently relegated
to secondary Importance by gasoline
requirements of internal combustion
engines, the statment says:
Development of Cracking
"The cost of crude oil over the
greater part of the past three years
has been such as to make the cost of
the natural gasoline recovered in ex-
cess of the cost of gasoline produced
by cracking fuel oil. The natural out
come of this has been a multiplication
of cracking facilities which has tended
to enhance the value of fuel oil and
depreciate that of gasoline. This
statement is supported by the in
creased value of fuel oil today as
compared to year ago" Big exten-
sion of cracking installations, it adds,
has brought lesser valued products
into direct competition with gasoline
from straight refining, be-
cause it has largely expanded the
amount of gasoline available and
decreased the supply of fuel oil.
The extent to which cracking has
developed is pointed out, as follows:
"To meet the requirements for gaso-
line one barrel Of crude can now be
made to do what formerly required
1 1-2 to barrels. The statistics of
production of gasoline, proportional
to crude oil run through the refneries
since pre-war days, show that in 1914
this percentage of gasoline was 1876
per cent. Since then it has steadily
until in 1923 it represented
81 per cent of the crude run.
At the beginning of 1923 it is estimat-
ed that there were more than 1000
units in operation, with po-
tential annual charging capacity of
approximately 175,0O0,000 barrels of
heavy oil, from which approximately |
5O,OO0,000 barrels Of gasoline could
nave been produced. 1t is estimated
hat there will have been, by the end
If 1924 an increase of at least 25 per
,ent in the cracking units and poten-
ial capacity.
Smaller Price Spread Expected
"The day of spread of as much as
5 cents a gallon between the tank car
market for gasoline and fuel oil ap-
,ears to have passed. Whenever the
Gasoline can be obtained from fuel oil
It a cost lower than the natural gas
line in the crude, additional cracking
ABILITIES will be installed and tend
ncy will be toward reduction in the
vailable quantity of fuel oil and in
Increase in the available amount of
asoline. A construction in the supply
f fuel oil will tend to enhance its
alue. whereas an increase in the
uantity of gasoline will have the re-
erse tendency" ;
The review adds that if fuel oil be-
ONES less available than today, aside
rom its use in Diesel engines, fast
ar vessels and steamships, manufac-
IRE of artificial gas, glass and special
,eel manufacture, etc., there are few /
f its present uses for which coal could
OF be substituted. Measures of dis ,
lacement of fuel oil power purposes
4 l. L.
n the extent to which the fuel oil
rice is advanced.
'Tf overproduction of crude oil ,
lakes it necessary, it says, for the :
ldustry to sell petroleum in the form /;
fuel oil in competition with coal,
len there can be no question that the :
,nsumer of gasoline will participate
the lower value so established !.