Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1938-01-08


and NOTABLY aids in the mainte-
nance Of a fair and economically
right price structure. Crude prices in
the regulated states have held firm
almost without exception through
1897 and the price increase gained
early in the year has been main
tanned. The other side OF the pic
ture can be illustrated by citing
Pennsylvania and Montana az two
Instances where a surplus has been
developed without state pro-ration to
act as a stabilizing factor. In
PENNSYLVANIA, with a recently
developed surplus amounting to only
So. this price of Bradford oil has
been cut from $2.57 to $2.20 per
barrel. Here in our field we have
had two successive cuts totaling
$50 per barrel-a $50 price cut
for the likewise reduced number of
barrels of oil that we can sell.
Cut Bank has had a similar slash
SO the present quoted field price is
S1.1O but with no buyers for a
very large amount of shut in pro-
duction 1t is an open secret, how
ever. that some buyers are taking
advantage of the distressed condi-
ton to make sub rosa contracts for
this high quality oil for as little as
$50 per barrel, which on a com
parative basis would fix the price
for Kevin-Sunburst crude at $50.
We offer that this is the first step
towards complete decentralization,
for which the classic example is
East Texas in the early SOS when
high grade crude sold for $40 per
barrel.
3. Pro-ration would be follow
ed by numerous economic better
ments. 1t would spread among all
producers ratably the benefits of the
new and larger markets we hope
to obtain by our concerted efforts
toward freight rate reductions, new
refining capacity, and the campaign
Of the Shelby Lions Club to buy
Gasoline Made From Montana
Crude" We submit that the entire
oil industry of the state, refiners.
producers, employees, landowners,
and royalty owners, as well as all
the communities and interests serV-
ing them would benefit from such
a program to a much greater extent
than is possible now with a small
number of companies and indivi-
iuals taking all the tops.
Could Develop Reserves
Pro-ration would make It econ
possible to develop larger
oil reserves and greater potential
production than is possible or wise
inder the present system, wherein
me man may pump his wells to
while another may drill
n a good we'll only to be forced to
hut it in completely. Such expan
ion of reserves and potentials would
guarantee to proposed or expanding
efineries a dependable supply of
rude for a long time working life.
With sterilization of the industry
IS borrowing power would be in
reased, and loans made to it would
e safer and more desirable. New
apital would be encouraged to en-
err either production or refining if
he market and a dependable supply
we're available to all alike.
Arguments Against PROBATION
Some of the reasons given against
by its opponents are:
A. That proration is a sinister
esign of the major oil CO.
o squeeze out the small producer
nd refiner.
B. That we should not get the
IL business into politics, along with
hitch we find some expressing fear
hat public officials administering
he law would become corrupt and
ell preference to the highest bid
ers.
c. That proration will stop ef-
sctive effort to expand our markets.
D. That it is not right to take
part of the market built up by
ne money and efforts of those who
ave it, and distribute it to others.
Our answers to the above ques-
ons are:
A. Demand for proration did not
art with any major company. A
esire for it in the Kevin-Sunburst
cid has been constant since 1894,
iainly among small Independent !
roducers who have either been ;
ithout a market or have had a
cry limited one Action by the :
GARD to prorate production and
rotect stripper wells has been post