192 Policy Criteria for Petroleum 



policy, therefore, oil and natural gas present problems of particular 

 importance. 



One authority on resources and conservation, Professor Erich W. 

 Zimmermann,^ points out that in the popular conception of resources 

 no distinction is made between physical substances and resources. He 

 describes physical substances as the "neutral stuff" of nature that does 

 not become a resource until man (a) becomes aware of the sub- 

 stance, (b) learns how to make use of it, and (c) develops ways of 

 making the substance available for use. This concept has vital impli- 

 cations, in his judgment, for the meaning of resource conservation in 

 general and petroleum in particular. In the case of oil the distinction 

 between the physical substance and the resource is of vital signifi- 

 cance. The oil industry lives on the process of discovering and devel- 

 oping additional reserves to replace the oil that is being consumed. 

 Professor Zimmermann concludes that if resources "are not but be- 

 come," if they unfold slowly in response to evolving wants and arts, 

 then the first concern of those who would do something for posterity 

 should be to make sure that this unfolding process proceeds unhin- 

 dered. 



It seems to me that this unfolding process — the conversion of na- 

 ture's "neutral stuff" into resources — bears directly on what Dean 

 Mason terms a central question of natural resource economics here at 

 issue, namely: Are the conditions of mineral discovery and produc- 

 tion so different from other types of production as to require special 

 analysis and special treatment? He questions whether oil should be 

 treated differently, through tax policy, state conservation laws, or for- 

 eign trade policies. I believe that petroleum has unique characteristics, 

 affecting discovery, development, and production, that justify differen- 

 tial treatment in certain areas of public policy. The economic progress 

 and security of this country are closely related to our energy supplies 

 in general and our petroleum supplies in particular. The question goes 

 beyond actual war; in a nuclear war we might have little or no use for 

 whatever supplies we had. The real problem relates to such incidents 

 as the closing of the Suez Canal. In that instance no one knows what 

 would have happened if Europe had not been able to draw upon the 



' Erich W. Zimmermann, Conservation in the Production of Petroleum (New 

 Haven: Yale University Press, 1957). 



