606 R. ARNOLD GENERAL CONDITIONS OF PETROLEUM INDUSTRY 



GENERAL CONDITIONS AFFECTING THE INDUSTRY 



Like practically all others, at the present moment, the petroleum in- 

 dustry is affected by the abnormal conditions of the great war. Whereas 

 the demand is great, the means for meeting this demand are restricted 

 by the lack or high price of material for development purposes, lack of 

 transportation facilities, and the isolation or destruction of several im- 

 portant oil fields. The need of transportation facilities has tended to 

 increase the price of oil where it is consumed and to decrease the price 

 where it is produced.. An excessive demand having been created for the 

 lighter derivatives of petroleum, such as gasoline and distillates, a very 

 considerable part of the energy now being devoted to the industry has for 

 its object the conversion of heavy oil into light, and many ingenious 

 methods are being invented to accomplish this result. The demand has 

 also started almost frantic efforts, not only in this country, but abroad, 

 to find new oil fields. Normal conditions can come only after a termina- 

 tion of the war. 



FACTORS GOVERNING THE PETROLEUM INDUSTRY 



Laying aside for the moment the unusual and considering the normal 

 phases of the industry, we find that it is governed by factors numerous 

 and complicated. They may be divided roughly into two groups, the one 

 including natural factors, the other artificial. The geologist has to do 

 largely with the first group, the financier and the business man with the 

 second, the petroleum technologist with both. Since this is primarily a 

 geologic meeting, the writer will confine the discussion largely to the 

 geologic factors. Among these may be mentioned origin of oil; rock 

 pressure or pressure under which the oil and gas exist in their under- 

 ground reservoir, and which affects migration and accumulation ; viscosity 

 and other chemical and physical properties of the oil ; the thickness, ex- 

 tent, porosity, and structure of the reservoir rock, and the relation of the 

 oil t ) other substances, such as water and gas, which are concomitant with 

 the oil in most oil fields. In the group of artificial factors, or those 

 having to do with the recovery and use of the oil, might be mentioned the 

 price of oil and gas, which is usually the dominant artificial factor, and 

 such others as depth of wells, time required to complete wells, distance 

 separating wells, character and physical condition of wells, pumps and 

 other equipment, improvements in methods of development and recovery, 

 water complications, discovery of new fields, distance of fields from mar- 

 kets, transportation facilities, relative cost of production of oil as com- 

 pared with the cost in other fields and with the cost of other commodities 



