Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1942-12-19
Price Of Oil Is Up But Not Enough

tribution to the war effort There is nothing
they could do that is more important than
to develop more oil for use in the critical
year 1943. They would go out and develop
new areas where they believe there are new
reserves, If they had money and materials
with which to work.
1t has occurred to us that this is a problem
that should be taken to a governmental
agency for solution. The controlling factor
is the unavailability and cost of supplies.
The OPA is apparently determined that
there shall be no increase in the price of
oil. 1t follows that either there viii be an
oil shortage that win jeopardize the cause
of the United Nations in this war else the
government win provide solution
The government closely controls the
supply of materials. If the government were
to purchase, as a war measure, casing, rods,
tubing and power units and provide them
for the drilling of wells in areas such as
Montana, where more oil is critically needed,
a majority of the operators would go ahead
with drilling, even though the present price
of crude represents no profit The average
operator could finance the cost Of the
labor, fuel and incidentals.
Under the plan suggested the government
would retain ownership of the casing and
equipment so that in the event of dry
hole it would be withdrawn and restored to
use in another well. If production were
found. requiring that the equipment be left
in the well, the operator might then pay for
such equipment out of oil production from
that we'll
The agency that should be able to finance
such a plan is the Reconstruction Finance
Corporation, else a subsidiary corporation
which would have authority to purchase and
allot to strategic fields the needed amounts
of casing, and other equipment
There is no machinery in existence to
handle this at present, it is true. But it
would be a relatively simple matter to sub
NIT the proposal to the Montana delega-
ton or to Senator O'A1ahoney Of Wyoming
and they would quickly utilize their Wash
ington contacts to put the plan into motion
This would not be a permanent solution
1t is an EMERGENCY plan. The govern
ment erred in allowing the oil reserves of
the nation to drop so low. The government
has been informed of the facts but men
such as Leon Henderson do not have time to
listen, let alone reason out the facts. Other
wise the price of crude would have been
kept on parity with the cost of living and
this country would have no worry about
enough oil to carry ON the war.
The best informed body in the United
States, close to the government, is the Pc
troleum Industry War Council This COM
mittee has been giving the facts to the
administration without results. This COM
mittee has estimated supply and demand
data with great accuracy. The newest
estimates are that increased demands for
petroleum during 1914 would amount to
more than 100000 barrels a day greater than
IN the last quarter of 1943 as compared with
the last quarter of 1912.
This committee has again demanded:
A RECOGNITION OF THE PARAMOUNT
OF INCREASING PRO
OUCIBLE CRUDE OIL RESERVES,
That line is quoted from the report,
which also requests some estimate of mill
airy requirements from the Pacific coast,
beyond the first half of 1943, so that pro-
Tision can be made to supply any necessary
Increases in demand" Also requested was
The formulation of a long-range supply
nd demand program for the Pacific coast
o obtain information for the comparison Of
teel expenditure for drilling in California
gainst the steel requirements that would
e needed to increase supplies from other
arts of the country"
In other words, the petroleum industry
7ar, council forsees a serious situation in