PETROLEUM. 55 



not change materially the nature of the issue. A big fraction of the 

 domestic petroleum is gone; whether that fraction is one-third, as 

 present knowledge indicates, or is one-fourth or even one-fifth, 

 makes no difference in the consideration demanded by the situation. 

 The fact remains that the size of the fraction has meaning to people 

 using petroleum to-day and therefore represents an economic factor 

 that must be reckoned with now.^ 



It is, of course, very evident that the present tendency can not per- 

 sist to the point of even approximate exhaustion,^ because conditions 

 naturally arising, such as price increase, growing imports, and others 

 will serve to relieve the tension and thus spread the remaining 

 supply over a greater number of years. So, in spite of its sensational 

 character, the physical exhaustion of the petroleum resource is a 

 theoretical matter of academic interest purely. But of practical 

 importance is the period of economic stress that is ushered in when 

 the resource faces a greater demand than it can fill in the customary 

 manner. That is a period of readjustments to meet the new condi- 

 tions, and arrives far in advance of physical exhaustion. 



As a matter of fact, local adjustments are constantly under way, 

 as petroleum fields reach their climax of production and pass into a 

 period of decline. Thus each field forecasts the history of the re- 

 source in its entirety (see fig. 8). These local adjustments affect 

 the industry in the way of causing geographic shifts in activities, 

 but they have thus far had no national effect, because youthful 

 fields have heretofore been ready and able to sustain the shifted 

 burden. But obviously a limit must eventually be reached when an 

 adequate array of youthful fields will be lacking. A consideration of 

 the present situation, in this light, brings forth the realization that 

 such a dominant proportion of our petroleum supply is drawn from 

 the Kansas-Oklahoma and California fields, that their decline can 

 scarcely expect compensation, without development of other fields to 

 a degree to which there is no prospect. It is generally conceded, too, 

 that these two fields have well-nigh, if not already, reached their pro- 

 ductive climax (see fig. 8). 



It would appear, therefore, that entirely apart from the size of 

 the petroleum reserve, the dependency upon a cumulative oil-field 



* European countries have repeatedly faced the Impending exhaustion of a resource 

 and therefore have gained experience in handling such a situation. But this matter 

 presents an entirely new problem to the United States, and she naturally has no built-up 

 and tried-out machinery for solving It. The average person in this country to-day, or 

 let us say a year ago, apparently looked upon a mineral resource (if he considered it 

 at all) as a clay bank, inexhaustible and to be dug Into at will. Consequently, to carry 

 the figure further, our ideas of resource administration as reflected In public policy are- 

 excellent for clay-bank resources (and we have some of that kind; 1. e., cement, build- 

 ing stone, sand, clay, etc.), but not suitable for those more limited and elusive minerals- 

 that must be wrested from the depths of the earth. 



' It would appear that complete exhaustion could be achieved by destroying Inhibiting 

 economic conditions ; that is, by means of extreme measures of socialiaation, such a» 

 fixing a price under a system of forced production. 



