84 BULLETIN 102, VOL. 1, UNITED STATES NATIONAL MUSEUM. 



FUNDAMENTAL CAUSES OF WASTE. 



If the petroleum supply is weakening, it is obviously desirable to 

 examine the portion that is wasted. We have previously observed in 

 some detail what these wastes are and where they take place — the oil 

 left underground when the field is abandoned, the gas permitted to 

 escape into the air or into barren formations, the destructive infiltra- 

 tion of water into the oil sands, the rapid production with demorali- 

 zation of prices if the pool is large, the losses involved in storing the 

 oil until it can be transported to market, the drilling of unnecessary 

 wells, the inferior use to which much of the oil is put. These matters, 

 of course, are well-known and notorious. But they are manifesta- 

 tions merely. We must look deeper for the root causes that give 

 rise to these wastes. 



In the production of other raw materials there are no such con- 

 spicuous wastes as characterize the production of petroleum.^ There 

 would appear to be, then, some fundamental factor peculiar to petro- 

 leum and conditioning the wasteful procedure common to its ex- 

 ploitation. This factor is not far to seek; it lies in the fact that 

 petroleum is a migratory mineraP and moves underground in the 

 direction of decreased pressure. This factor, activated by unre- 

 stricted competition in production as commonly practiced in the 

 United States, is the fundamental cause of the wastes so preponder- 

 ant with petroleum. Because petroleum is not fixed in position and 

 much of the production, especially in young fields, is won through 

 the efforts of small operators occupying small tracts, usually leased, 

 there ensues a competitive scramble on the part of each operator to 

 reach oil as quicTdy as possible and produce it as rapidly as possible. 

 This means a ruthless sacrifice of all but the easy-to-get values. Even 

 if an operator desires to defer production or restrain his output, as a 

 rule he can not do so because a rival operator with a neighboring well 

 will suck from under his feet the oil which his lack of action relin- 

 quishes. So long as the ownership of oil is determined by vertical 

 boundaries, arbitrarily dividing a geologic unit or reservoir into 

 many portions, just so long will there be hurried production with all 

 its train of losses.^ (See figs. 12 and 13.) 



1 With which Is included natural gas. The wastes in the production of coal are also 

 conspicuous, but less than in the case of petroleum. It is a striking fact that the great- 

 est wastefulness characterizes the exploitation of the energy resources. 



2 Natural gas and water also display this property ; and in both there is waste. In 

 the case of water, however, the waste Is of slight consequence, since the supply is nn- 

 limited. 



* Max W. Ball presents the matter very effectively in the following quotation (Adequate 

 acreage and oil conservation, Proc. Amer. Min. Congr. November, 1916, pp. 322-333) : 



" There is the root of the whole trouble — the small holding. Let us go bacli over the 

 history of the field. 



" We saw that as soon as the field was discovered it was leased up in small tracts. 

 Then we saw the Smiths, the Browns, the Joneses, and the Standard Oil drilling for 

 dear life, each trying to get the oil from under his little tract and a bit of the other 



