PETROLEUM. 49 



to sustain. Gasoline now is the main prop to the whole cost struc- 

 ture of petroleum refining.^ 



With the industrial quickening due to the entrance of the United 

 States into the world war, the demand for fuel oil ^ has become so in- 

 sistent that the complexion of the oil situation has again changed and 

 the emphasis now falls upon fuel oil. And as the production of crude 

 petroleum has not been able to keep pace with the attempted con- 

 sumption of fuel oil, a serious shortage of this product has resulted ; 

 even while the supplies of gasoline have been ample to maintain the 

 activities of war, business, and pleasure.^ 



If the course of development, as indicated by this broad survey of 

 refinery evolution, be projected into the future, we may foresee a time 

 when the petroleum industry will yield a range of fuels for the in- 

 ternal combustion engine only; illuminating kerosene in quantity 

 narrowing to that desirable for country use and export trade ; lubri- 

 cating oils adjusted to the growing demands of mechanical power; 

 and an ever-widening range of chemical products supporting a great 

 oil by-products industry, rivalling if not exceeding the coal-products 

 industry in importance. In respect to the last, it should be empha- 

 sized that the United States to-day faces an opportunity similar to 

 that which 20 years ago confronted both Germany and the United 

 States as regards the manufacture of dyestuflPs, explosives, fertilizers, 

 drugs, and other chemicals from the nonfuel components of coal. 



DISTRIBUTION. 



Many industries terminate their activities with the manufacture of 

 commercial products, turning these over to independent agencies for 

 distribution. With the petroleum industry, however, distribution 

 forms an integral division of the industrial activity, a carefully plan- 

 ned out construction of markets as part of the resource development 

 being substituted for a demand ordinarily left to natural growth or 

 maintained by costly advertising. Thus, once the oil is produced, it 

 passes through the various stages of transportation, refining, and dis- 

 tribution under the influence of a highly organized economic machine, 

 a coordinated industrial unit, engaged not merely in adapting a crude 

 material to diverse uses, but also in shaping and developing latent 

 needs the world over into a demand which will sustain a balanced out- 

 put of products. 



We have already seen how the pipe-line, and to a less extent the 

 coastwise tanker, brings the crude petroleum to the refineries which 



^ For an interesting discussion of this matter, see Report on the price of gasoline in 

 1915, Federal Trade Commission, 1917, pp. 52-53. 



2 The demand for fuel oil has been accentuated by an inadequate coal supply and is 

 in part a reflex from that circumstance. 



* Various aspects of this situation will be treated in the section on the war situation, 

 pp. 35—39 of this paper. 



