Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1940-12-07

10 argue out of federal control Neither
is there any use to cry out for help be-
cause there is no other cop on the
corner. Modern bureaus are constituted
policeman, prosecutor, judge and jury,
and appeal to the courts for defense
against invasion of rights by political
agencies is not possible. SO irrespective
of the best interests of the people at
large right or wrong, it may be expected
that the politicians will net quit until
they get their hands on the oil industry.
Last week we discussed the position of
the royalty owner. should government
control come We asserted that whether
we like it or not, the action of the gov
eminent will serve to help rather than
injure the royalty owner The fact is
that the greatest profits in the oil in
dustry do NOT come from the produc-
tion of oil Rather the profits come
from the operation of a complete cycle
where the crude oil is sold in the form
of refined products The new trend of
enforcement of the Sherman antitrust
laws points to the day when the price
of refined products will be dictated by
the government and that price will be
based on the monopolistic system of the
complete cycle of the industry. That is.
the government will refuse to allow the
producer to make a profit. then the trans
porter makes a profit, then the refiner.
then the wholesaler and then the re-
taller each In turn making a profit, be-
cause the government finds that one COM
Dany is making each of these profits.
.sAT.
al profits going into enc Golfer.
One of the suits now pending is an
attack by the government on companies
which had high pipeline charges which
handicapped competitors and while the
companies themselves paid the high rates.
they got the money back through fat
dividends from the pipeline companies.
So it appears to us that the effort at
government control withdrawing the
idea of power-seeking politicians-result
in basing the price of refined products
on the complete cycle Of the industry.
IT is pretty well known in the industry
that producers are not getting enough
for the oil. The major companies own
ing pipelines. refineries and filling sta
lions are able to make money not only
on their own oil but on the production
purchased from others. 1t follows that
IL the price received for crude is dis
proportionate to the price of refined pro-
ducts that the governments first step
will be to force an adjustment of the
charges for handling and processing, with
the result that it will give the producer
MORE money for his oil.
Certain It is that If the producer does
not get more for his oil. prospecting
will stop and under government control
the nation will start eating in
to its precious something that
the nation dare not allow. So, we reas-
IN. there is every probability that
HIGHER prices-more commensurate
with the risk and labor of producing
cil-are likely with or without govern
ment control.
1t follows that landowners who have
I'll as their crop will receive more money
fnr their oil along with the operator.
The landowner will always be protected.
under the law. The anti-conporation
crusade may go 10 any length at all,
but the landowner will not be hit When
he gives his lease to an operator he
agrees that his compensation shall be
IL " barrels out of every 100 barrels
produced and saved. If the lease produc-
IS nothing. the landowner gets nothing
and the operator has paid nothing to
the landowner for the rights received
II the producer gets oil, then he turns
pver the landowners share to him as IL
Is produced. Be IT large or small in
amount, the landowner is entitled to his
rightful share and the highest courts in
the land will uphold that right He is an
"oil farmer" and his crop is oil rather