Montana oil and mining journal., 1936-06-13
COOLIDGE DEMANDS


with gasoline at "a cents for the
! imperiaI gallon in Canada and
l24Ih cents for the U. s. gallon
in Montana, these cuts in crude Oil
prices are absolutely unjustified
and 1t is merely a racket that has
been put over on the independent
producer on account OF over-produc-
lion. 1t is the duty and the obli-
CATION Of the Montana Oil Conser-
vation Board to prorate these fields
down to a point where there will be
demand for this crude rather than
Overproduction.
am reliably informed that there
was, at the old prices, a 5O-cent
differential between Montana crude
and crude from Texas and the Mid
Continent Field delivered into Cana
da or. in other words, Montana had
an advantage of SO cents a barrel
over imported crude from other
fields on account of rail freight
rates. This Canadian company has
merely taken advantage of dis
tress condition Of overproductton
and 1t means that the Canadians
are grabbing our natural resources
at unfair prices and still holding
up the price of gasoline on the
Canadian side of the border. This
Is a rotten situation and puDlac
sentiment should be directed a
gainst this sort of racketeering.
Mr.. Johnson advised you that
there is only a ten cent differential
between KeYin-Sunburst crude anu
Cut Bank crude. This, in my esti-
Tl& - q n
At the very least consideration un-
der cracking plant conditions there
is. in my opinion, 8 cents .dlffer-
entail and with the average plant
there is 25 cents differential be-
tween these two crudes. In order
to sell Kevin oil in competition with
Cut Bank crude we should have at
least a 25 cent differential. Mr..
johnson, who is the American repre-
sentative of the British-Amertcan
Company and who is the SON OF
Jim Johnson OF Dempsey Gibbons
fame, is promoting the Independent
operators in the Kevin field who
are being forced to take short
price for crude oil which Is un-
justified with our present price OF
gasoline. AS one of the independent
producers, I feel that the buyers OF
crude and refiners are entitled to-
make a fair profit but when they,
together with the distributors, at
tempt to take all the profit and
penalize the producers, 1t is an
unfair situation.
The Brftish-American Company
cares nothing about Montana and
is now drilling a large number OF
wells in Oklahoma and Kansas and
as soon as the proration is lifted
in those states, this company will
not continue to buy Montana crude
but is simply taking advantage Of
our distress conditions to force
down the price of our crude oil
which will soon be below the cost of
production, which means that we are
dissipating our natural resources
by letting a bunch OF Canadian
chiselers run the business in the
State of Montana. 1t is the most
absurd thing that I have ever wit
messed in the oil business and it
is high time that we get united
effort and control public opinion
to the point where they will not
be allowe dto do this thing.
The Toronto Pipe Line Company,
is now making application for a
reduction in their pipe line rate of
71k cents, which means that they
will reduce the price of crude de-
livered in Coutts X cents a bar
rel which means, indirectly, that
the independent operators in the
Kevin field will have to take an
other Is cents reduction in order
to compete with Cut Bank crude