Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-11-13
LAMONT PROPOSES
TO CONSERVE OIL
Secretary Suggests Three
Point Program to StabiI-
ize Industry.

Secretary Lamont returned to WASH
ington today from Chicago where he
proposed in an address before the
American Petroleum Institute a three
point program for the sterilization Of
the oil industry. He also presented a
warning that If the industry does not
soon set it's house in order it may find
itself in a Legislative straight jacket"
In respect to forced legislation, the
Commerce Department chief declared
that repetition 'of such sprees as we
have seen in east Texas will very quick
Iy convert the indiges. ion of the oil in
custry into something like appendicitis"
Points Out Waste.
The cabinet officer pointed out the
| waste" of the past and said he saw in
the growing movement to correlate
State action to control oil output as the
beginning of a solution to the indus
try's problems.
The success and failure of that move
ment, he said, may determine whether
the producing branch of the Oil in
duStry continues as an individual bust
ness or comes ultimately under closer
Federal regulation.
1T is strange thing that, despite
the Nations vital dependence on oil,
its production has been almost entirely
unaffected by Federal regulation. There
is growing movement for Federal
regulation of interstate oil and gas
movements, but the we'll itself under
our present laws is as remote from
Federal contact as If it were located N
another country. This lack Of contact
between the oil well and the Govern
ment may or may not be desirable.
simply point it out"
Praising the progress toward correla-
/ ton Of restrictive efforts made by the
Oil States Advisory Committee, Secre-
tary Lamont offered the oil men a
ree-point program "of fundamentals
which are designed to point way onto
former grounds
First. Provision should be made by
interstate compact approved by Con-
| gress, for putting on a permanent basis
the periodical forecasting of demand.
the setting of State production quotas
to meet that demand and enforcement
OF such quotas, all of which are now
being undertaken informally by the
the regulatory commissions Of Okla
homa, Kansas and Texas under the
agreement of September 10. Such a
compact should create permanent in
terstate advisory body, formally recog-
nized, which could perform functions
of coordination. Enforcement within
each State would rest with the State
regulatory body constituted by its own
laws.
State Laws Needed.
Second. State laws, which are uni
form in principle If not in detail, are
ultimately needed within the COM
pacing States. These might we'll in
clude, among other things, provisions
Cd prohibiting drilling or the extern
tension of pipe lines into new fields
without showing of public conven-
fence and necessity: CD requiring wide
spacing of wells; 90 prohibiting waste
of gas and gas energy both above and
below grounds; "a fixing minimum gas
oil ratios; 80 authorizing regulatory
bodies to require ratable taking within
each field and between competing
fields; t6) authorizing unit operation;
Cd and giving the State regulatory
body broad powers to require produce
ton methods which will insure maxi
mum recovery from the ground. One
function of the interstate advisory
board should be to draft and recon-
mend such laws from time to time if
the compact itself does not outline
them. But the coordination of various
State production programs Is more
pressing matter than uniformity of
State laws; the first objective of a COM
pact should be to get the States to CO.
operating on a permanent basis. Uni
form laws when adopted might reason
ably go beyond the production stage
and aim at correction of the democrat
lied marketing methods of the indus
try, but that Is beyond the scope Of the
present discussion.
Third. As recommended by Secre-
tary Wilbur, joint Federal and State
fact finding body for arriving at an
equation Of domestic and foreign pro-
duction and imports should be created
by the compact of the States and with