Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-05-09

duStry should not be ObScured by vague declara-
tons that the petroleum industry has become
affected with public interest justfying govern
mental control just because conservation has
come to be recognized as responsibility of
government.
The distinguishing characteristic of petroleum
and natural gas is their liquid and fugacious
nature. In other mining industries the situation is
entirely different; for instance the owner of coal
land is not subject to drainage, for he can keep
his coal if he likes and his neighbor cannot take it.
But when a we'll is drilled into an ei-producing
area the claw of capture" permits the surface
owner to draw the oil from his we'll even though
it may drain the supply of the adjoining land
owner. Therefore, the neighbor must drill and
produce his share of the oil or lose it, and his
neighbor in turn must do likewise -. This was
situation beyond the power of the industry to
remedy, and in all flush pools, before the conser-
walton efforts of the States were effective the law
of capture" resulted in unscientifc and wasteful
practices and overproduction. The oll-produclng
States and the industry itself have now come to
an intelligent conception of what real cOnSerVa-
ton means. The industry believes that true con-
servation means the scientific control of produc-
ton, making for greater recovery, as we'll as
efficient and economic utilization of crude oil.
It is the duty of the o-producing States, in the
public interest as we'll as in the interest of the
industry, to prevent waste of crude oil and thereby
conserve the supply. This duty is the obligation
of government and when that obligation shall
have been discharged there is nothing in the in
herent nature of petroleum or in the conduct OF
the business which requires justifes the oil in
dustry being declared public utility any more
than in the case of any other producer or manu-
facturer of commodity of general use.
In marketing gasoline the problems are no diff
ferent from those in the wholesaling and retailing
of other commodities. Whether there are too
many filling stations; whether there is waste in
the number of retail stores that market clothing,
groceries, beverages or the like, is problem that
concerns our economic welfare as whole and not
particularly any one business. 1t is Self-evldent
that the problems arising out of competition and
the operation of economic laws in every hamlet in
the country cannot be solved by bureau at
Washington which undertakes to regulate each
minute detail of our vast and complicated business
structure. There should be no economic tinker
ing, and no political control.
Unfortunately, governmental agencies, once
organized and endowed with some measure OF
authority aspire to continue their existence and
increase their authority. Any proposal to amend
the National Industrial Recovery Act with provi-
sions that convert it from what is theoretically a
system of governmentally supervised, industrlally
sef-regulated codes of fair practice into system
of Federal industrial dictatorship, becomes strik-
ing example of this tendency to encroach.
We have proceeded on the road to recovery suffi-
GENTLY to consider methods OF orderly deVelop-
ment of business as substitute for devices Gre
ated in moments of national emergency and
desperation. The time has come to consider the
long-range view of American economic progress.
The oil industry is prepared to do its part, and
demonstrate it's confidence in itself and in the
future of the country, if it can but know clearly
that it's efforts are not to be checkmated by con-
slant change, bureaucratic dctation or usurpation
of power.
Congress has an unparalleled opportunity to aid
recovery by frank recognition of separate fields
of Federal and State responsibility under the
Constitution.
Respectfully submitted by order of its Board of
Directors
AMERICAN PETROLEUM INSTITUTE.
AXTELL ]. BYLES, President