The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1924-01-23
oil DEMAND IS
LARGER THAN
SUPPLY
American Petroleum Situation
in Bad Condition, Says
E. w. MarIand.
By W. s. COUSINS,

ny W. Do NVO61IN0e
copyright. 1924, by Cosmopolitan News
Service.)
NEW YORK, Jan. 20. - ''The
American petroleum. industry IL to.
day in the worst condition in which
1t has ever been," E. w. Marland,
president Of the Marland Oil Com
pany, said today in discussing prob.
lens with which the leaders of the
industry are faced.
mot that the individual oil com.
panies will not make money and will
not have their financial burdens
lifted Marland continued. II am
taking broad view of the whole In
dustry. and there is grave danger
that this country, either in it's direct
production Of crude Oil or its I'M
portations, cannot supply the needs
Of consumers with fresh oil in tho
present year.
''It was foolish to say we had an
over-production Of oil last year be.
cause one section Of the country
was temporarily producing enough
oil added to what the other fields
were making to give us ten to
twenty per cent more crude oil
than was needed for immediate con-
sumption This year we will not pro-
duce sufficient Oil for domestic
needs, and what will be the result?
Reserves will be drawn on, the pub.
lie will pay more for its oil and
gasoline, and the industry will once
more be under suspicion"
Consumption of oil and oil prod.
ucts in America today, according to
Mr.. Marland, Is equivalent to about
1000, 900 barrels Of crude oil daily.
Increased by the importations of
crude oil from abroad, the most the
industry can furnish for the market
10 a little in excess of 1000, 1000 bar
rels, according to present estimates.
I'VE are not producing the
amount of oil today we know we
will need before the end of the
year, to say nothing of the normal
increase in demand occasioned by
the expansion Of industry and the
larger use of motor vehicles" Mr..
Marland declared. I'VE are con.
fronted with a lot Of declining
fields, and nothing is in sight to
take their places. Fewer wells are
being drilled today than at any
time in the last four years.
Half Of the country's production
today Is coming from highly flush
wells, whose great decline is already
in sight, This means that wells
now producing approximately 2,000,.
600 barrels Of crude oil daily, will one
year from today be producing only a
little over one-half of that amount.
1t means that wells must be drilled
before then that will produce nearly
100000 barrels day. or more oil
than is being taken out of Santa Fe
Springs, Long Beach, Huntington
Beach, Powell, Burbank, Tonkawa
and Smackover combined. Frankly,
I cannot conceive of the possibility
of such an achievement"
There is an old and well-accepted
law of economics, Mr.. Marland de.
cIared. which points out that while
an overproduction of any commodity
may cause, say 20 per cent de-
cline in price, the same percentage
of underproduction may lead to a
40 per cent advance in prices. An
overproduction is easily wasted or
stored while an insufficiency in sup
ply leads to intense competition for
all that Is in sight, he pointed out.
This change has characterized the
oil industry in the last two years,
Mr.. Marland declared.
What the industry needed in
past, years and in its flush periods"
he said, was a Joseph to store
the commodity during the years Of
plenty, as Joseph stored corn for
Pharaoh during the seven fat years
against the seven lean years. The
best place to store an oil supply is
In the ground, in known and proven
territory. and to pro-rate IT for
consumption as needed. In this
way there will be less of the fat
and lean years in the petroleum
industry.
"In the long run the public gets
no real benefit from spasmodic flood
ing of the market with oil at prices
less than the cost of production, fol-
lowed almost Immediately by ad,
vances in prices sufficient to take
care of the previous years deficits.
I want to see the industry main
tanned on q stabilized basis, with
prices subject to as little change as
possible, and with producers and
marketeers always able to take care
Of the needs of cOnsIInerR