Evening star., 1932-05-16
TULSA OIL REGION
INCOME INCREASES
Proration of Production Has
Increased Revenue S3,-
100000 Monthly.
BY DAVID LAWRENCE.

TULSA. Okla, May 16.-n wheat may
be,,said to be the first major commodity
likely to come back to normalcy, oil will
be close runner-up. For what has
been happening in the midcontinent
area as result of enforced curtailment
of production is reflected already in an
increased income to Tulsa and the oil
district around, of about $3,0000 900 more
per month than a year ago.
Such an increase reflects itself. in
turn, in increased bank deposits and in
more business confidence. At the same
time, proration of production could
never have been effective in the oil in
dustry, If all of the large oil States In
the midcontinent had not co-operated
to apply it on a comprehensive scale.
Difficulties and legal problems growing
from this controlled production are not
all solved, but the feeling here Is vastly
different than when the sovereign power
of self-preservatiCn first began to as
sert itself.
Expansion Is Orderly.
The oil men are not thinking in fam
tastic terms of three years ago, either
They have been compelled in their busl-
nesses to live within their incomes.
There is not much opportunity for flo
tation of new securities. Expansion Is,
therefore, more orderly and on a much
sounder basis.
What Oklahoma, Texas and other
States are attempting is balanced
production, as near as possible to actual
demand To accomplish this, pro-
dueers are held to an allowable output
per well, which permits only fraction
of possible production. This restriction
apparently is being accepted by nearly
all factors now as not only fair but
perhaps more economical ultimately for
all concerned.
If unrestricted operations are per-
mitted there is not only wastage of oil
and demoralized markets, but wastage
of valuable natural gas aS well. The
trend now is toward unit operation OF
pools to make control simpler, and to
prevent waste. Under this plan unre-
stricted drilling is avoided and produc-
ton is realized by the most economical
methods. At the same time, the sys-
tenn of supervision in other than pools
not under unit operation, is rapidly be-
ing perfected 1t is predicted that on
the gathering lines meters will be de-
to regulate output with scientific pre-
cision.
Don't Fear Competition.
1t is interesting to hear the trend of
discussion here about the proposed
tariff on oil, now urged by Midconti-
nent producers in the form of an excise
tax. Oil men say that they do not OBJ
iect to a competitive situation as be-
tween South American producers and
the Midcontinent area here. But, why,
they ask, should foreign companies be
able to escape paying taxes to the Am
erican Government when American op-
Grating companies, in making their
prices, cannot sell to the public with
out first deducting the taxes imposed
by State governments and perhaps by
the Federal Government
If the foreign producers were to be
compelled to pay tax, the oil produc-
ers here say 1t will not operate as an
embargo, but will furnish Washington
with revenue and will at the same time
eQualize competition as between the
United States and foreign produced oil.
In. other words, this part of the coun-
try believes in a tariff for revenue only
and thinks an excise tax that does not
act as an embargo is a logical form Of
revenue raising
The oil industry is feeling better. This
Is indicated in O better trend In busi-
ness generally through this district. For
when oil Is flowing and returning a
reasonable price, Tulsa proSpers and so
does the huge oil producing section of
the mid-continent.
Copyright, 1927