PETROLEUM. 
21 
to sustain. Gasoline now is the main prop to the whole cost struc- 
ture of petroleum refining. 1 
With the industrial quickening due to the entrance of the United 
States into the world war, the demand for fuel oil 2 has become so in- 
sistent that the complexion of the oil situation has again changed and 
the emphasis now falls upon fuel oil. And as the production of crude 
petroleum has not been able to keep pace with the attempted con- 
sumption of fuel oil, a serious shortage of this product has resulted ; 
even while the supplies of gasoline have been ample to maintain the 
activities of war, business, and pleasure. 3 
If the course of development, as indicated by this broad survey of 
refinery evolution, be projected into the future, we may foresee a time 
when the petroleum industry will yield a range of fuels for the in- 
ternal combustion engine only; illuminating kerosene in quantity 
narrowing to that desirable for country use and export trade; lubri- 
cating oils adjusted to the growing demands of mechanical power; 
and an ever-widening range of chemical products supporting a great 
oil by-products industry, rivalling if not exceeding the coal-products 
industry in importance. In respect to the last, it should be empha- 
sized that the United States to-day faces an opportunity similar to 
that which 20 years ago confronted both Germany and the United 
States as regards the manufacture of dyestuffs, explosives, fertilizers, 
drugs, and other chemicals from the nonfuel components of coal. 
DISTRIBUTION. 
Many industries terminate their activities with the manufacture of 
commercial products, turning these over to independent agencies for 
distribution. With the petroleum industry, however, distribution 
forms an integral division of the industrial activity, a carefully plan- 
ned out construction of markets as part of the resource development 
being substituted for a demand ordinarily left to natural growth or 
maintained by costly advertising. Thus, once the oil is produced, it 
passes through the various stages of transportation, refining, and dis- 
tribution under the influence of a highly organized economic machine, 
a coordinated industrial unit, engaged not merely in adapting a crude 
material to diverse uses, but also in shaping and developing latent 
needs the world over into a demand which will sustain a balanced out- 
put of products. 
We have already seen how the pipe-line, and to a less extent the 
coastwise tanker, brings the crude petroleum to the refineries which 
1 For an interesting discussion of this matter, see Report on the price of gasoline in 
1915, Federal Trade Commission, 1917, pp. 52-53. 
2 The demand for fuel oil has been accentuated by an inadequate coal supply and is 
in part a reflex from that circumstance, 
3 Various aspects of this situation will be treated in the section on the war situation, 
pp. 35-39 of this paper. 
