Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-11
LAYS OIL DISTRESS
TO TEXAS OUTPUT
Phillips Petroleum Head Be-
lieves Lack of Control Has
Damaged Industry.
BY BENNETT WOLFE.
Associated Press STAFF Writer.

TULSA, Okla, July 11.-Upon the
giant East Texas oil-producing area
Frank Phillips, president Of the Philips
Petroleum Co, tags the burden Of
blame for existing economic distress in
the petroleum industry.
AS East Texas goes, so goes the oil
business, Phillips believes.
Orderly development of the great
Texas pool with control of its flush
output, should enable favorable eco
nomic conditions prevailing elsewhere
in the industry to make themselves
felt. he said in a statement recently.
Examination of the present statisti-
cal position of the oil industry does
not disclose adequate explanation for
its existing Generalization" he said.
Trade Statistics.
"Crude oil stocks have been declin-
ing almost continuously since October,
1929. Stocks of gasoline are nearly
100000 barrels below those of a year
ago. Although exports have fallen of,
there has also been a decline in imports.
Domestic consumption has been run
ming about on a level with last year,
and the overall demand shows only
small decrease.
New wells completed in May num-
Der less than 500. compared with more
than ZOO in the same month last
year.
"One must look elsewhere for the
explanation Of the deplorable condi-
lions prevailing. They are partly
psychological reflection in the world
wide depression. but the most potent.
specific cause is lack of control of the
great East Texas pool. and fear that
this will undermine and destroy the
effective regulation of production es-
tablished throughout the rest of the
State, in Oklahoma, California and
elsewhere
ut now appears that irrational COM
petitive development and production in
that pool has about run its course and
that immediate steps will be taken
to establish certain and effective con-
troll of that area.
With this accomplished, the favor
able economic conditions elsewhere pre-
vailing throughout the industry will
have an opportunity to make them
selves felt
The East Texas areas present pro-
duction is about $4,000 barrels daily,
or 10000 barrels in excess of the
maximum allowed output fixed by the
Texas Railroad Commission.
Drop IN Price.
When the area was discovered. about
six months ago. the market for the
grade of oil which it yields was slightly
more than 81 a barrel Today the
average price for the areas oil is less
than 20 cents a barrel
Referring to the rich East Texas pool
as an "unwelcome treasure" the current
issue of the Lamp. official publication
Of the Standard Oil Co. of New jersey.
expresses a view similar to that of
Phillips
Says the Lamp:
The discovery of the East Texas
field could hardly have been made at
less opportune time. For several
years the industry had enforced upon
itself drastic curtailment of production
in order that current demand might
overtake supply Above ground stocks
were still extremely burdensome
Established producers everywhere had
carefully refrained from drilling I'M
necessary wells, and a new oil field was
the last thing any one within the in
dustry wanted to see.
In fact, if some arch enemy of the
petroleum industry had sought to do
1t the greatest possibly injury. he could
scarcely have hit upon a more diabolical
scheme than to bring upon it this new
Oil field. larger in size than any pre-
viously discovered. with prolific wells Of
comparatively shallow depth"