Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1937-11-06
Association Saves Industry

It is a strange but impressive fact that
no great good ever comes to this world
except as the aftermath Of a great evil.
1t takes war to make lasting peace in the
oil industry as well as among nations.
For that reason we feel that better days
are near at hand in the North Montana
oil industry. War is here out FORUM
ately at a time when it doesn't mean a
great deal, for it is at a time when little
oil is being sold. With price cutting en-
route to a point of uniformity of prices,
it is apparent that sterilization will grow
out of the present market situation.
One fortunate thing about the investor
in oil IS that history repeats itself in
practically every oil field and he who
knows something of oil field history IN
one field knows how to go about making
money in another oil field. Likewise, the
problems of every new field have to be
solved and solved again with each new
field. The industry is so young that we
can interview men now living to get the
solution of these recurring problems.
Montana has never had to go through
the severe growing pains that have hit
every other important oil state While
oil was selling for 10 cents a barrel in
East Texas, Montana was getting better
than a dollar a barrel. Kevin-Sunburst
saw crude down to 20 cents at the time
the big wells were being completed in the
East Sunburst pool, when the daily pro-
duction reached a peak of 1000 barrels
per day. That oil was absorbed by the
market-just how none seems to remem-
ber Soon afterward when the Interna-
tional refinery was built at Sunburst,
crude demand increased until oil was
bringing $3.50 per barrel Independent
Montana refineries went on the rocks"
trying to buy crude in competition with
the Canadian buyers. The Montana price
of crude was high and the price of
gasoline low, for the reason that there
was no relation between the price of
crude and the price Of gasoline.
HOW RAILROADS
"UNLOADED" THEIR
DESERT LANDS
But at its worst, the situation in Mon
tana has never been comparable with
that of California, in its early stages.
In its early stages, the California oil
idustry saw in Coalinga a field price OF
from $3.50 to SIS per barrel for crude.
That was in 1905 when the annual pro-
duction of California was 14,119 barrels.
BY 1909, so many people had entered
the highly profitable business that pro-
duction mounted to 439,372 barrels. On
top of that came the discovery of oil at
McKitterick and Bakersfield. A well was
drilled in Kern river, west of Bakersfield,
before the production of the other fields
could be marketed and Kern field came
into being This field was largely owned
by the Southern Pacific railroad, being
included in the every-other-section land
grant given the railroad to encourage
building This was desert land and the
railroad land department seized this oil
discovery as an opportunity to get rid
of acreage which had heretofore been
considered worthless. Thus, incidentally,
the S. P. railroad answered the fire.
uuently-asked question: "If it is good,
why are the owners selling?" The
Southern Pacific didn't want to gamble
that it was oil land, so sold it at $3.50
per acre on the benches and SIS to $40
per acre in the river bottom.
The Kern River boom brought an over
production situation such as we have
at Cut Bank. Everyone wanted to sell
his oil but there wasn't a market for
any part of the available production An
oil burner was invented which made pos
sible the burning of this heavy crude as
a fuel. Demand slowly increased but did
not keep pace with. supply. If one pro-
Queer found a buyer at $3.50 a barrel,
another would offer the same buyer Oil
at a lower price. 1T was cut-throat
competition.
OIL SOLD FOR AS LOW AS CENTS
A BARREL.
That is what cut-throat competition
will do. 1t did that in California. 1t
did that in East Texas.
PIPE SALESMAN
Is LEADER IN MOVE
FOR ORGANIZATION
A few of the thinking members of the
oil industry did a lot of talking about