Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-25
REVISION OF LAWS
ON OIL ADVOCATED
Chairman of Unit Operation
Committee Urges Co-opera-
ton in Trade.
BY BENNETT WOLFE,
Associated Press Stan Writer.

TULSA, Okla, July 25.-The root OF
the petroleum industry's troubles lies in
the Archaic legal concept that oil Is
akin to wild game, declares Earl Oliver,
chairman of the Unit Operation Com
rnittee of the American Institute OF
Mining Engineers In an article to be
published in this weeks issue OF the
Oil and Gas Journal.
In the opinion of Oliver and more
than 200 engineers and lawyers who
aided him in a study Of unit operation,
the fundamental step to be taken Tor
sterilization of the industry Is revision
of the law on oil and gas to make i'm
possible the "legalized robbery" that
exists under the principle that oil be-
longs to any one who can produce 1t.
No Protection Afforded.
Unit operation, designed to stop COM
petitive drilling drainage, with its
wasteful practices and results, calls for
cooperative development on an oil field
through a pooling Of acreage, drilling
costs and production.
Oliver points out that the owner OF
potential oil land now has no protectlon
against a rapaciouS neig.lbor except to
race with him to the oil sand, and that
no matter what the condition OF the
market an oil producer cannot stop
CrllllNR, Cannot supp
cannot limit his production unless MS
neighbors do the same.
This presumed right Of every drilling
site owner to do what he likes, regard
less of the effect upon others, has re-
duced the industry to condition OF
anarchy" the journal comments
Rditorially.
MATTERS have come to such a pass
that nothing short Of revolutionary
change in the whole habit OF thought
about oil production can save the
industry"
The remedy as urged by Oliver. is
legislation which recognizes that each
land owner or leaseholder Is entitled to
share proportionately In the oil and gas
in the common reservoir underneath
his land.
THE havoc that has come upon the
industry over the last two years as the
result Of unrestrained competitive oe-
velopment at Oklahoma CITY and East
rrexas is familiar history" Oliver writes
"Vast reserves of natural resources have
been rlthlessly destroyed without bene-
fitting society.
1T is a singular fact that contem-
noraneously with ruthless waste there
comes a decentralization OF the petroleum
industry. Such waste and Such de-
moralization have always gone hand IN
hand.
Causes Of Difficulty.
"Three basic facts account for this:
|A) there are many separately owned
tracts of land in each pool; % Oh
and gas deposits are migratory. ana 10
in each pool there is limit to the cur
rent market demand for these SUD-
stances. Lately oil has droped from 81. 81
a barrel to 20 cents, with the result that
+bo Detroleum industry Is paralyZed,
fortunes are wiped out, and labor goes
begging for bread"
The universal thread running through
ALI ideas contributed to his STUDY OF
unit operation, Oliver says, Is that the
oil industrv's plight is directly due TO
the peculiar method OF determining
ownership in oil and gas that was de-
vised by early courts at time Wnen
the characteristics of oil and gas de-
posits were little known.
obviously, before relief will come
to the petroleum industry some method
must be devised that will protect each
owner, big and little, in his just shares
of oil and gas from the common reser-
voir without the necessity OF bringing
them to the surface to provide against
their appropriation by others.
Unit operation offers that method.
PROBATION based on acreage content
likewise offers it. While successful ef-
forts both in unit operation and
equitable prorat,on demonstrate these
results can be obtained under present
laws. the handicaps are so great as to
make them almost insurmountable."
w P. 2. German, chief counsel,
Sicily Oil Co., who elaborated with
oliver in his study. said he believed the
State clearly had the power to require
unit operation.