PETROLEUM. 85 



The headlong production of oil is greatly facilitated by further 

 circumstances. The gambling character of wildcat drilling in itself 

 leads to the desire for quick returns, with little regard to the nice- 

 ties of engineering efficiency. Then, the automatic character of 

 production, once the oil is reached, attaches small cost to the actual 

 production — not infrequently, in fact, it costs more to retard the 

 output than to produce at maximum speed. Thus an incentive is 

 lacking for exercising care with a product gained easily and oft- 

 times lavishly. There is, also, practically an unlimited demand for 

 cheap petroleum for inferior uses, affording a convenient outlet for 

 hasty production and tending to support the grossest overproduc- 

 tion with at least a modicum of profit. 



Accordingly, because the cost of production is slight, wastes in 

 production are of little consequence to the producer; while, due to 

 the competitive race for extraction, production is unrestrained. 

 Thus oil is produced with no adjustment to the legitimate (that is, 

 high use) demand, which gives a surplus of cheap oil that takes 

 advantage of and encourages the ever-present latent demand for oil 

 fuel. Indeed, certain oil companies, usually small or newcomers in 

 the oil business, find their only opportunity in the direction of en- 

 couraging the use of oil fuel; hence there is a strong pressure of 

 advertising propaganda in this direction.^ 



This may appear to be an exaggerated account of petroleum produc- 

 tion.^ But such are the motives and conditions that prompt the pro- 

 duction of the major part of the output of the United States and 



fellow's before the other fellow could get it. Why? Because each tract was so small 

 it could be drained by wells on the surrounding tracts. 



" We saw that the race was so keen that wells were improperly drilled, that gas was 

 allowed to waste into the air or dissipate itself through barren formations, that water 

 was allowed to enter the oil sands, and that great quantities of oil were left under- 

 ground, never to be recovered. Why? Because the small holding forced each man to 

 race with his neighbor. 



" We saw the entire flush production of the field thrown on the market at once, de- 

 moralizing market prices, forcing the premature abandonment of wells In other fields, 

 resulting in the burning of unrefined crude and the waste of the more valuable products. 

 We saw the maximum production of the field go into storage, where the losses from 

 evaporation and fire were enormous, and where the cost of the oil was nearly doubled. 

 What caused these things? The fact that every holder of a small lease must drill It up 

 as soon as possible. 



" Lastly, we saw the cost of production more than 300 per cent what it should have 

 been. And what was the reason? That every man must drill his lines as fast as might 

 be. and must completely drill up his land at the earliest moment. Why? Because the 

 oil under his small holding could be taken from him by wells on surrounding tracts. 



" Ignorance there may be, carelessness there undoubtedly is, but back of ignorance, 

 of carelessness, of reckless, headlong methods. Is the real cause — the fact that the 

 average holding is so small that speed is the owner's sole protection. Let him be care- 

 ful if he can ; let him be economical if he can find a way ; but careful or careless, reck- 

 less or conservative, he must be speedy if he would survive. The small holding is his 

 master." 



1 The fact that certain oils contain naturally a relatively small proportion of the 

 higher-use products, such as gasoline, is beside the point. If the Appalachian field had 

 yielded such an oil, methods of refining would have turned it into the higher channels 

 of use. See the discussion on "cracking" distillation, page IS. 



2 Possibly because the picture is painted in terms of homely, everyday experience ; but 

 the issue is too important to be trusted to the cold atmosphere of technical expression. 



79968°— 19— Bull. 102, vol. 1 7 



