Evening star., 1951-08-18
The Domestic Oil Outlook

The American Petroleum Institute, in its
recent report on the supply and-demand Situa-
ton in the United States, has drawn highly
impressive and reaSSuring picture of our oil
ndustryS past performance and its future capa-
biitieS. At the same time, however it has made
clear that the task ahead-in terms of meeting
both civilian and military needS-adds up to
good deal more than chlds play. In fact, if
the task is to be carried out adequately,
mammoth" expansion job will have to be done.
AS far as military needs are concerned, &C
cording to the institute, they more than
double what they were a year ago. But they
still represent only about per cent of the
total American petroleum demand, and the in
dustry is sure that it can satisfy them, in TOTO
even in case of the sudden outbreak OF an all-out
war. Somewhat less certain, however, is the
outlook for keeping supply in pace with our
ecord-breaking civilian consumption. The ele
ment Of doubt here is one reason why house
holds with oil burners are being urged now to
fill their storage tanks in preparation for next
winter. Although shortages not in sight
at the present moment, they may we'll develop
unless there is sufficient expansion in the
meantime.
A few figures are enough to illustrate what
has been happening to the demand for petro-
leum in this country. In 1850 civilian and
military uses combined caused an increase in
consumption of about II per cent over that for
1949, and an additional rise of to 10 per cent
is expected in the current 12-month period.
This two-year jump. amounting to more than
20 per cent, is by far the biggest on record.
Taken by itself, it is equal in volume to the total
of oil products being consumed by all the nations
of Western Europe. What it has meant from the
producing standpoint is that the industry since
1949 has been called upon to supply to the
Nation an extra 13 million barrels day. Gn
cidentally, the quality of the production has been
rising steadily. For example although prices
excluding taXes-are approximately the same
as they were Is years ago, two gallons of today's
higher -octane gasoline are equivalent as far as
such things as engine economy and ton-mileage
are concerned, to three of the 1925 type)
An even more striking measure Of the
growth of our American demand for petroleum
products can be found in these figures: In
1949 our average daily domestic consumption
(including military, but not EXPORTS was a.,
OIL 900 barrels; by 1945 it had risen gradually
to 4,857 900; today it stands at an estimated
71OO OOO0-an increase of almost IS per cent in
the past decade. This tremendous jump-re-
hectng constantly rising numbers of passenger
automobiles, trucks, tractors Diesel engines oil
furnaces etc-has not found the industry want
ing, for the industry, since VI day, has spent
over $40 billion on modernization and expansion
to keep it's capacity tailored to the Nations
mounting needs
But the end of steadily increasing conSump-
ton is by no means in sight. On the contrary,
according to the American Petroleum Institute,
"If expected demands materialize, tremendous
expansion is needed"-an expansion which dur
ing this year alone should involve an estimated