Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-09-13
WAR BETWEEN OIL
MEN AND us. SEEN
Plan to Restrict Output to Be
Fought on Grounds of Un-
conStitutionaIity.
, BY FREDERIC WILLIAM VILE.

Strife is in sight between the Fed
eral Government and oil-producing m
terests over the project to regulate
their output by an act OF congress-
Definite hints that the administration
will shortly seek such legislation We're
given to the American Bar Associa-
ton at Buffalo two weeks ago by
Hubert Work. Secretary of the In
terror. DR. Work was speaking as
chairman of the Federal Oil ConSerVa-
ton Board Oil people have lost no
time in signaling their readiness to
resist Government control of produc-
ton on grounds of its illegality. The
challenge which they are evidently
preparing TO take up was thus phrased
by Secretary Work:
Il believe the time has arrived
when the Federal Government should
ask Congress for legislation intended
to protect our oil deposits against
waste in production, and the public
against future high cost of oil prod
ucts. Never in our national history
was the need of conserving in the
ground our petroleum resources more
apparent than now"
Oklahoma Accepts Challenge.
L
great Southwestern oil fields, comes the
nrSt indication Of the producers re-
sentiment of proposed control meas
ures. Spokesman OF oklahoma oil in
terests assert that Congress IS With
out power TO supervise purely locai
industry like oil and that any statutes
enacted to that end would be unCon-
stitutional. 1t is declared, in the same
connection, that State laws designed
TO regulate oil production are wholly
ineffective.
a brief on the subject has been pre-
pared by James y. Neasey, general
counsel Tor the Garter Oil Co. OF Tulsa
MIR. Neasey's views are summarized
i'll the following observations
"Manifestly, it is preferable for the
industry to meet its problems indie
pendently of statutory coercion. The
OIL business is too lndlVidualiStlc and
too technical to be Controlledby statute.
Nevertheless, the leaders OF the indus
try should be impressed with the fact
that, after all, their supreme duty is to
the American public and the American
Government. Ii the industry on its
Own and in its own way
shall fan to put its house in order,
there will be an inSiStent, perhaps an
irresistible, demand for legislative con-
troll. II this unhappy moment shall
ever come, the allabSorbing question
Will be the degree in which the Nation
or the States may regulate the drill
ing and operation of OIL wells"
Oil Vagrant Mineral.
The oklahoma lawyer points out
that oil producers cannot reduce out
put or stop production until demand
meets supply, like other industries.
"OlI," he explains, lis a vagrant min
eral. 1t Is the property of the one
who on his own land reduces it to a
possession. Where several tracts of
land are underlaid by a common oil
reservoir the extent of one producer
operations must be determined by
the acts of his neighbor. All but one
may wish to refrain from building
new wells, or reduce production, but
If this one is of a contrary mind he
may force all the producers to en-
gage in an intensive drilling campaign
or operate their properties to capac-
ity"
Mr.. Veasey cites the two United
States Supreme Court decisions in
the child labor cases as precedents
for holding that the Federal Govern
ment cannot interfere in oil produc- |
ton. The Oklahoman contends that
even though oil is produced for in
SldlG SOL1IllGIC G lis IL
purely a matter for local, not nation
al, regulation. The Supreme Court
decided that Congress is without
power to supervise matters local to
the States through the indirect route
of the commerce clause such as
child labor.
Holds Plan Unconstitutional.
Veasey thinks mo stronger state
OF facts could be presented for the
extension Of the commerce clause, SO
as to include production and manu-
featuring within the State, than the
one appearing in the child labor
cases. He seems confident that the
reserved powers of the States under
the tenth amendment could be easily
invoked if Congress attempted to ex-
tend its authority over oil production.
Secretary Work wants committee
of nine-three lawyers, three oil en-
gineers and three representatives of
the Governmental draft bill. The
Federal Oil Conservation Board would
"study and recheck" it, with a view
to introduction in the Seventeen Con.
gress. DR.. Work calls the present oil
overproduction crisis IAN economic
disaster Of international proportions"
Copyright 1927