PETROLEUM. 63 



yet the United States is not taking adequate advantage of its possi- 

 bilities in this respect; oil by-products afford perhaps even a greater 

 opportunity than stretches out from coal products, but with the 

 difference in respect of the former that the trail is as yet scarcely 

 blazed.^ It would not be an exaggeration to say that oil by-products 

 represent one of the foremost industrial opportunities that confront 

 the American Nation to-day. 



In this connection an interesting vision opens up as to how a great 

 oil by-products industry, through the values accruing to successive 

 refinements of products, may be led to contribute more than it now 

 does to the expense of petroleum production, relieving to that extent 

 the cost distributed among the products universally used in bulk 

 such as gasoline. It would seem that a farsighted economic policy, 

 properly directed, might eventually contribute to a lowering cost for 

 motor fuel, just as a proper shaping of coal economics could be made 

 to relieve the focus of expense now exclusively borne by fuel coal — 

 the two conspiring to lower the cost of living. 



THE WAR SITUATION. 



The latent weakness of the petroleum resource became apparent 

 under the influence of war stress. By encouraging the petroleum 

 demand without being able to stimulate the supply in like degree, 

 the war merely brought into the immediate present an issue under 

 way and scheduled to arrive in the course of a few years. The 

 war, therefore, permits us to observe the weak points in the re- 

 source development as experienced facts, instead of in the light 

 of logical deductions even one stage removed from observation. In 

 short, the war brings the petroleum issue to a head, making the whole 

 problem of the resource a problem of the present emergency also. 



The importance of petroleum to modern warfare is obvious and 

 needs no detail here. It is natural that the American resource 

 played an important war-time role and in turn has been strongly 

 influenced by the martial situation.^ 



The outbreak of the European war in 1914 found the petroleum 

 industry of the United States suffering from a period of low prices 

 and depression occasioned by a gross overproduction in the Mid- 

 Continent field, due principally to the remarkable yield of the noto- 

 rious and unexampled Gushing pool ^ in Oklahoma. The demorali- 

 zation of the normal course of international commerce also added a 



* A good picture of the problems facing the petroleum industry is painted by Bacon 

 and Hamor, The American Petroleum Industry, 1916, pp. 798-806. 



*A good account of the war reactions of petroleum is given by John D. Northrop, Our 

 mineral supplies : Petroleum, Bulletin 666-DD, U. S. Geological Survey, 1917. 



'This pool, from June, 1914, until April, 1915, when it attained a maximum produc- 

 tion estimated at 300,000 barrels dally (over one- third of the output of the entire 

 country), dominated the petroleum industry of the whole United States. 



