PETROLEUM. 
27 
not uhange materially the nature of the issue. A big fraction of the 
domestic petroleum is gone; whether that fraction is one-third, as 
present knowledge indicates, or is one-fourth or even one-fifth, 
makes no difference in the consideration demanded by the situation. 
The fact remains that the size of the fraction has meaning to people 
using petroleum to-day and therefore represents an economic factor 
that must be reckoned with now. 1 
It is, of course, very evident that the present tendency can not per- 
sist to the point of even approximate exhaustion, 2 because conditions 
naturally arising, such as price increase, growing imports, and others 
will serve to relieve the tension and thus spread the remaining 
supply over a greater number of years. So, in spite of its sensational 
character, the physical exhaustion of the petroleum resource is a 
theoretical matter of academic interest purety. But of practical 
importance is the period of economic stress that is ushered in when 
the resource faces a greater demand than it can fill in the customary 
manner. That is a period of readjustments to meet the new condi- 
tions, and arrives far in advance of physical exhaustion. 
As a matter of fact, local adjustments are constantly under way, 
as petroleum fields reach their climax of production and pass into a 
period of decline. Thus each field forecasts the history of the re- 
source in its entirety (see fig. 7). These local adjustments affect 
the industry in the way of causing geographic shifts in activities, 
but they have thus far had no national effect, because youthful 
fields have heretofore been ready and able to sustain the shifted 
burden. But obviously a limit must eventually be reached when an 
adequate array of youthful fields will be lacking. A consideration of 
the present situation, in this light, brings forth the realization that 
such a dominant proportion of our petroleum supply is drawn from 
the Kansas-Oklahoma and California fields, that their decline can 
scarcely expect compensation, without development of other fields to 
a degree to which there is no prospect. It is generally conceded, too, 
that these two fields have well-nigh, if not already, reached their pro- 
ductive climax (see fig. 7). 
It would appear, therefore, that entirely apart from the size of 
the petroleum reserve, the dependency upon a cumulative oil-field 
1 European countries have repeatedly faced the impending exhaustion of a resource 
and therefore have gained experience in handling such a situation. But this matter 
presents an entirely new problem to the United States, and she naturally has no built-up 
and tried-out machinery for solving it. The average person in this country to-day, or 
let us say a year ago, apparently looked upon a mineral resource (if he considered it 
at all) as a clay bank, inexhaustible and to be dug into at will. Consequently, to carry 
the figure further, our ideas of resource administration as reflected in public policy are 
excellent for clay-bank resources (and we have some of that kind ; i. e., cement, build- 
ing stone, sand, clay, etc.), but not suitable for those more limited and elusive minerals 
that must be wrested from the depths of the earth. 
2 It would appear that complete exhaustion could be achieved by destroying inhibiting 
economic conditions ; that is, by means of extreme measures of socialization, such as 
fixing a price under a system of forced production. 
59819— 18— Bull. 102, pt. 6 3 
