Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-09-03
oil CURTA|LMENT
| PLAN IN JEOPARDY
Court Hearing Next Tuesday
to Determine Fate of Pro-
ducers' Agreement.
BY HARVEY L. scANDRETT,

associated Press stan writer.
OKLAHOMA CITY, Okla, September
3.-A hole has been punched in the
e--proration-that for more than
a year has held back the greater part OF
an Oil flood threatened by the tapping
of great pools in the mid-continent area.
Whether that hole will be plugged or
permitted to remain open, with the al
most inevitable crumbling of the pro-
ration structure, rests upon a decision
OF the Oklahoma Supreme Court after
hearing next Tuesday on an action OF
G. G. Julian, Oklahoma City oil opera
tor, attacking the legality of the produce
ton restricting agreements and their
ratification by the State Corporation
Commission.
Julian, who recently transferred his
oil activities from the Pacific Coast tn
Oklahoma, pierced the dyke with a
temporary writ of prohibition preventing
the Corporation Commission from in.
terfering with the operation of the two
city lot oil wells his company has COM
pleted in the flush South Oklahoma
City field.
His action crystallized opposition
hitherto expressed only in operators
committee rooms by independent pro-
ducers and in mess meetings by royalty
owners, who insisted that a barrel OF
oil above ground-whatever the price
was better than potential half dozen
in the deep sands.
Challenges Statute.
Julian has attacked the proration
structure from variety of angles He
challenges the constitutionality of the
1915 statute under which the Corpora-
ton Commission assumed jurisdiction Of
OIL production in the State and argues
that even if it is valid, many of the oil
companies which agreed to official re-
straint are diSregaruing the regulations
He charges the commission with dele
eating illegal legislative powers 10 tbs
committee OF operators and itself assum-
ing judicial powers.
Allegations of causes for Federal ac-
ton also are contained in the Julian pc
tltion. 1t charges that the commission
| has instructed pipe lines and railroad
companies engaged in interstate COM
merce to refuse to purchase, carry or
run through their lines, oil from any
operator producing petroleum in excess
OF the prorated maximum. 1t asserts
the purpose of formation of the opera
tors committee was to restrain and
withhold portion of the commercf
and trade from the State of Oklahoma
and to the several States of the Unitea
States" It charges that the regulation
II enforced, will serve to deprive the
Julian Co. of property without due
process of law"
While production of the two Julian
wells Is comparatively insignificant in r.
| field of giant gushers, their location /
| such that self-defense would caus
operators throughout the Oklahom;a
| City field to throw their wells wide opei
in the event proration was broken down
The Julian wells are Offset by wells
the Indian Territory Illuminating OF
Co, dominant in the field, and b.
those OF the T. B. Slick interests. Undei
the rule Of the offset, which is drille;
| to prevent drainage of oil from a neigh /,
boring well, the lifting of productioi
| restraints would run through the entir,
| held like wild fire were the movemen 3
started.
Potential Production.
The Oklahoma City field alone hi j.
! an estimated potential production G..
nearly five times the $4,000 barre
daily permitted under proration order
its possible daily flow now being com
puted at 100000 barrels, more tina
the present production of the entir
United States. s,
Operators, in pressing the necessit
| Of continued limitation of oil output .
the State, have argued that the markf
demand for Oklahoma crude Is on
100000 barrels a day, and that, viii, :.
no drastice price reductions have RI
suited from an output somewhat
excess of the maximum stipulated
proration orders, a breakdown in til
price schedules inevitably would follc
the lifting of restrictions, and gree
waste of petroleum and its product
would result because of the inadequat
of pipe lines to carry of the exec:
he Ianl ~ rafnoriac aud ctnra O