Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1942-07-18

Royalty ownerS-members Of this organ
izatiOn-are scattered over 40 of these Unit
ed States and we have Frequently called
upon them to take mp imperative legislative
matters with their congressman, because
there is an appalling ignorance in official
circles In Washington regarding the oil in
dustry.
There isn't person who reads these lines
who does not realize that II the United
States is to win this war Il viii be largely
through the fact that the country is ade-
quateIy supplied with OIL. without oil, the
modern war machine must bog down The
trouble with the situation Is that the United
States entered this war with full oil tanks
and tremendous potential volume The oil
industry was perhaps the only major indus
try that was fully prepared.
AS a result of that preparation, many Of
the honest but ignorant folks in Washing
ton think there is nothing more to be done.
The oil industry is one which can be de-
pended upon TO perform a herculean task
has frequently demonstrated the fact. The
oil industry has-of all industries-asked for
no federal funds TO meet emergencies. So
why should the oil industry be granted any
favOrs? Why should the price Of oil be kept
on a parity with other commodities and In
the ratio Of increased costs? why should the
oil industry be given steel for casing? All
who read this know the answers but not
the teeming hOrdes of bureaus in Wash
ingtOn.
Some officials in Washington regard the
oil industry as a sort of Lake Superior from
which water can be pumped intermidabIy
without danger of exhausting the supply.
StiH others, we fear, Of sOciaIistic beliefs,
are convinced that no institution should be
allowed to get so strong that it is able TO
do what the oil industry has done thus far
in serving the American people at war. They
want to strangle it now while there Is OPP
pOrtunity.
We want our members to realize the dan
ger of the erroneous thinking In Washington
and to keep up a running correspondence
with their congressional representatives on
these subjects as they arise. We are not
discussing the danger to the oil industry.
We can take care of ourselves. We are dis
cussing the danger to the United States
through the wrecking of the oil industry by
ignorant governmental agencies, at this
critical time
We have received copy of excerpts from
the examination conducted by Congressman
Jed johnson, representative from the sixth
district of Oklahoma, of Leon Henderson,
administrator Of the Office of Price Admin
istration, before the house appropriations
committee Henderson is the key man i'm this
situation. No matter how well informed is
the office of Petroleum CO-ordinatOr, there
remains the OPA In position to drive the
fatal dagger into the petroleum industry and
into the war effort. We are not prepared
to interpret either the motives or criticize
the methods Of MIR. Henderson but we are
printing the testimony to give members of
the Montana oil industry some idea OF Mr..
HendersOns comprehension Of the situation:
MIR. JOHNSON OF OKLAHONIA-Ar.
Henderson, would like to discuss one thing
that I am disturbed about. and that is with
reference to the plight of the independent
oil men. AS you know, Oklahoma produces
a great deal of oil, and the state has prob
ably more small producing wells than any
other state in the union. And the letters
am receiving from a lot Of small independent
producers and operators tell me they are
shaking in their shoes for fear you are go
ing to put them out Of business. In fact,
many small wells already have been aban-
doned
MIR. HENDERSON-Th whole market
price and the production situation In pc
troleum has been completely changed by the
For instance, certain things from
which they were getting the biggest income
nave dwindled in importance, and things
which we're by-products have become sud-
ienly important The government is insist
ng on the delivery Of high octane gas, some
,utane and so on. And instead Of the low
;ost haul from the Gulf ports by way OF
ankers. we have had to go to the more ex-
1ensive haul by tank cars and other meth
IDS. All of these things have completely
changed the price structure in Oil to such
IN extent that I have put the petroleum
PRODUCTS in one OF the five major divisions
md raised 1t from the level of one OF the
ections to that of a division in charge OF
deputy.
MIR. JOHNSON-I realize that. The sit
ation has also caused the cost Of wildcat
ing, the bringing in of new wells, to be
increased at least 25 or 30 percent Is that
lot true?
MIR. HENDERSON, know it must have
increased the cost; I do not know the per-
entage.
MIR. JOHNSON-With the price Of crude
considerably lower than it was in 1897, yet
he cost of validating and drilling Is con-
iderably more than it was then. Is that
lot true?
MIR. HENDERSON, think that is cor