Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1938-02-19
AGAINST PROBATION
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there were inequities among producers
under present conditions.
The majority defends this inequitabl'
system now in vogue on the ground tha'
IL has long been established IN Montana
as we'll as other oil producing states
and that IL is such a highly contrOVer-
sial question that the Board finds II
NOT necessary to decide whether this
system is susceptible TO change.
My opinion is that the evidence shows
conclusively that every oil producing
state, about which any information APP
pears in the record. has taken some steps
either by legislation or by agreement
or voluntary cooperation OF the pro
ducers. to do away with the lnequlnes
Of the system that prevails IN Montana
This satisfied me that the present sys-
tenn can and should be changed and that
the question is no longer highly con
trovensial except in Montana The PROB
lem has been disposed OF satisfactorily
in every other oil producing state. ana
is likewise being disposed Of through
proration in the Province al Alberta
where they have recently developed a
large over production
While it is true. as the majority OF
the Board says that the oil industry
in Montana is in its infancy. it seems
that after fifteen years We should begin
now TO grow up and To learn from the
experience OF all the other on producing
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partial oil men that PROBATION brings
about a system which results in uni
formly equitable production from all
leases and between all producers. What
testimony appears in the record on this
subject bears me out.
1t is my understanding that under
any system Of PROBATION this Board
would not have authority. and would not
attempt to direct or regulate the pur,-
chase or sale Of crude petroleum. With
that conclusion of the Board / agree.
In every state where legal prOration is
in effect there is no interference with
the right of the buyer and the seller To
deal between themselves, and 50 far as
! know there is no authority that claims
any such power II would not be my
purpose, as a member Of this Board, TO
attempt to regulate the sale or purchase
Of crude oil. hut / believe that PROBATION
will result in creating prOportiOnate
market for the small producer, who at
present is shut down or is only permit
ted to produce a small percentage OF his
crude oil. If present conditions are
allowed to continue the small Independent
producer will not be able to exist which
in my opinion. is unfair.
In one Finding. No. ~, the Board
states that THE evidence shows estimat
cd potential capacity of all oil wells
in Kelvin Sunburst and Cut Bank fields
in excess of market demand for crude
oil existing in October, 1857. In another
Finding, No. VII 1T appears from said
Montana. actual and estimated potential
is actually not sufficient to supply con
sumption requirements or To supply the
requirements Of all refinerieS in the State
If operated to capacity" In one Finding
il Is declared that potential production is
in excess Of market demand. In an
other one that il is insufficient 10 sup
ply consumption and refinery require
ments
The evidence shows that total refin-
ing capacity Of the state is probably in
excess Of The amount which would be
required TO refine all the potential crude
oil vet one Of the solutions which is
offered ar least, tentatively. by the
Board 10 the present problem is the
expansion 81 refining facilities. II 1t
DO a fact that we already have more re-
filming capacity than is required to
handle the crude oil production of the
State. what relief would the building
II more refinpries providel
To the extent that the building Of
new refinerie> might provide new markets
for our crude oil we should welcome