The Daily Alaska empire. [volume] (Juneau, Alaska) 1926-1964, 1934-10-01
TEXAS hot OIL
STILL PRODUCED
DESPITE CODES
Eighty Thousand Barrels
Each Day Estimated
to Be Output
BY CARL c. oRANMER

1 WASHINGTON, Oct, L. Hot
| OIL is being produced Illegally in
Texas at the rate of 10000 barrels
1 a day. according to estimates re-
! ceived by the petroleum admins
4 trative board, despite all contracts,
regulations and codes thus far de-
Wsed to curb the flow
! Yet, the oil administration has
Just rounded out its first year in
the experiment to stabilize $12,-
600 100000 industry and to con-
serve one of the nations most val
liable resources with number of
accomplishments claimed to its
credit by Sec ret airy of Interior
Tckes.
d Prices Go Up
Crude oil prices that were averag-
4 ing 80 or 40 cents a barrel have
lbeen raised to 80 cents or 81 where
they cover the cost of production
in most fields. Daily crude oil pro-
duction that was averaging 2,8O00o0
to 100000 barrels has been re-
duced to an average of about g.
100000 barrels for the past year.
with total legal and illegal oil
probably not exceeding $4,000
barrels a day at any time.
Thousands of "strippers wells in
oil fields that could not long have
continued in competition with new
gushers have been kept in opera
ton as result of better prices, it
is estimated. While their total pro-
duction is only about 100000 bar
rels daily many million barrels of
oil which might have been lost
with shutting down of the wells,
are believed to be in reserve be-
meath them.
Gasoline Purchase Plan
The oil administration has passed
through bewildering labyrinth of
moves and counter-moves to cope
with new bootleg" product.
Latest of these has been a gaso-
line purchase plan, extended to all
the country east of the Rocky
mountains, by which the large oil
companies contract with small re-
finers to take excess gasoline stocks
off their hands and by which the
small refiners in turn agree not
to handle or process Oil in excess
of the allowable quotas.
Designed to bolster as shaky
gasoline market which might be
the forerunner of a rapid price de-
cline and resulting gas wars the
plan previously had been put into
effect only in Texas.
The major oil companies can
hold the gasoline thus purchased
will need to buy about 100000
barrels of excess gasoline during
the first month, it is estimated.
Hot OH Troublesome
eHot oil"-that produced IN ex-
cess of the allowable given each
Wells the base of the trouble.
Some wells in the east Texas flush
district are allowed a production
of less than l per cent of their
capacity, although the national
average is or per cent of ca
pacity.
| Agents have uncovered secret
pipes tapping oil wells so feet be-
low the surface. by passes" have
!, been found as far as five miles
from the master gates where
the flow is registered, and outlets
for bootleg oil have been discov-
Iered even in bathrooms.
| This shot OIL which can be
bought at perhaps is or 20 cents
a barrel and converted into gaso-
Zine to be dumped on the market
at or 5 cents a gallon, is reputed
| to have made fortunes.
i A3I To Supreme Court
Although challenged at many
points, the oil administration ran
into its chief difficulty in Texas
where a group of 26 refiners operat-
ing Swimming" plants-which boil
out" the gasoline whereas most
large refineries use the cracking"
lprocess-cfallenged the validity of
tproduetion control both in respect
to Interstate and intrastate COM
nerce. They lost their case before
la court of three federal judges in
Texas and in an action before the
District of Columbia district court,
but won before the east Texas dis
trict court.
| A decisive legal test is expect
ed when this case, as well as GRIM
inal cases brought by the govern
ment, comes up for decision by
: the United States Supreme Court
lat the october term.