Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1939-08-19
What Should Royalty Owners Do
About petroleum Conservation?

IT Ow ABOUT the Cole petroleum
conservation" bill. and its effect
upon ROYALTIES?
This inquiry is coming in our mail so
frequently that we have decided to take
time out to give all members of this Or
ganization our Impressions of the much
discussed oil control law now before
congress.
First of all, this bill can be passed by
the present congress, since the president
can call congress into session in the fall
and continue the consideration of bills
pending at the summer adjournment.
There is every probability that Secretary
Ickes will try to force the Cole bill
through the present congress. The pre-
sent production strike" of oil produc-
ing states will bring the whole situation
to an issue that is bound to get into
congressional oratory.
Oil trade publications over the country
express varied opinions of the bill, all
from the viewpoint of the producer, re-
finer and marketer. From the viewpoint
of the royalty owner we say that passage
of this bill would not injure any royalty
owner.
Anything that trends toward a greater
recovery of oil helps the royalty owner.
Anything that trends toward a greater
recovery Of oil helps the royalty owner
The theory of the petroleum conserva.
ton" measure is that oil is being wasted
by poor operating methods. If that is
true-note the IF-then every royalty
owner is anxious to see a greater per-
acre recovery.
We know today that the per-acre re-
covery in Kevin-Sunburst might have
been increased had operators known in
1922 what they know today about eff
ficient production methods We would
never have had the spectacle of the
great burning gasser on the California
Abel farm. where millions of cubic feet
of precious gas were burned as a play
boys bonfire. instead of being utilized
to bring oil to the surface of the ground
However conservation methods have
come as result of operators desire to
get greater recovery of oil rather than
from legislation.
Certain it is that if production meth
DDS can be improved so that a given
tract will produce 5000 barrels of oil
ner acre rather than 5000 barrels per
acre under present methods. every roy
atty owner favOrs it, The owner of 9s
royalty would welcome the additional
10 barrels of recovery, which would be
his share
The man who buys a ROYALTY buvs
oil IN UNDERGROUND STORAGE
This oil is delivered to him free of cost
of production by the operate who brings
it to the surface together with his own
oil The owner of II ROYALTY OWNS
one barrel out of every 100 barrels of
oil RECOVERED. That is where econ
servation" comes in. at least in theory
BY conserving gas energy as an ex-
ample. the yield of oil should be sin-
creased. Thus the Cole law should help
every royalty owner President Roose-
welt asked for legislation designed to
prevent avoidable waste in the Droduc-
ton of oil and gas in the United States"
Congressman Cole said that "the bill is
designed solely as an oil and gas con-
servation measure and does not attempt
to control supply"
However, no true American is anxious
to see the government dip deeper into
business. Where a government bureau
once gets itself entrenched, 1t can never
be blasted out, without a revolution
It is like the adage of letting the camels
get their heads in the tent during the
storm. At the mdment it seems quite
harmless and humane, but it is inevitable
hat the camels will move into the tent
md drive the human occupants out. That