400 BULLKTTN 92 



the past ha\e been nieagre, and with the increased cost of irrii;"ation 

 the balance sheet can show only a loss. During the past summer many 

 ranchers have irrigated much less than was needed, on account of the 

 high cost of fuel, and the lack of water was reflected in tlie low crop 

 yields. 



The cause of the advance in price of gas oil is not understood 

 clearly. The production of crude oil in California in 1919 was 101,- 

 000,000 barrels, and the production in 1920 has been approximately the 

 same amount. The amount of gasoline derived from tiie crude oil in 

 1919 (by conventional atmospheric refining methods) was ap])roxi- 

 mately 418.000,000 gallons, which is almost exactly ten })ercent ol tl:e 

 crude oil produced. 



During the present year some of the largest oil companies have 

 added largely to the gasoline supply by a process of "cracking" heavier 

 distillates — a process of increasing the A'ield of low boiling hydro- 

 carbons by heating the distillates while under high pressiu-c. The plan 

 of the largest companies, it is understood, is to crack the "cut" between 

 gasoline and kerosene to make gasoline, and to crack the cut betweeu 

 "kerosene and lubricating oil to increase the supply of kerosene. If tlu 

 smaller companies follow this plan, as is probable, it will do away with 

 all California fuel oils suitable for the ordinary farm engines, except 

 kerosene and gasoline. 



Price advances in boiler fuel oil and in gasoline, also, occurred last 

 winter, but these advances were of small moment. In repl\ to an 

 inquiry by the Railroad Commission of California, the Standard Oil 

 Company stated that considerations of profits did not enter into their 

 price advance ; that their action was designed to protect the fuel oil and 

 gasoline supply by stinudating i)roduction and by checking consumption. 



Increased demand doubtless was the largest factor in the price 

 advance of gas oil. However, the largest refiners have not manufac- 

 tured any gas oil for some time, and the small refiners are not equipped 

 to convert gas oil into products of higher value. The law of supjjly 

 and demand is very sensitive if it can account for the price advance of 

 150 percent, mostly in three winter months. 



FREIGHT RATES OX FUEL OILS 



For man}' years the rates from southern California refineries to 

 Tucson were 83 cents i)er 100 pounds for gasoline and kerosene. f)6 

 cents for engine distillate, and 30 cents for unrefined oils. As a war 



