PETROLEUM. 
35 
yet the United States is not taking adequate advantage of its possi- 
bilities in this respect; oil by-products afford perhaps even a greater 
opportunity than stretches out from coal products, but with the 
difference in respect of the former that the trail is as yet scarcely 
blazed. 1 It would not be an exaggeration to say that oil by-products 
represent one of the foremost industrial opportunities that confront 
the American Nation to-day. 
In this connection an interesting vision opens up as to how a great 
oil by-products industry, 2 through the values accruing to successive 
refinements of products, may be led to contribute more than it now 
does to the expense of petroleum production, relieving to that extent 
the cost distributed among the products universally used in bulk 
such as gasoline. It would seem that a farsighted economic policy, 
properly directed, might eventually contribute to a lowering cost for 
motor fuel, just as a proper shaping of coal economics could be made 
to relieve thq focus of expense now exclusively borne by fuel coal 3 — 
the two conspiring to lower the cost of living. 
THE WAR SITUATION. 
The latent weakness of the petroleum resource has become ap- 
parent under the influence of war stress. By encouraging the 
petroleum demand without being able to stimulate the suppty in like 
degree, the war has merely brought into the immediate present an 
issue under way and scheduled to arrive in the course of a few years. 
The war, therefore, permits us to observe the weak points in the 
resource development as experienced facts, instead of in the light 
of logical deductions even one stage removed from observations. In 
short, the war brings the petroleum issue to a head, making the whole 
problem of the resource a problem of the present emergency also. 
The importance of petroleum to modern warfare is obvious and 
needs no detail here. It is natural that the American resource is 
playing an important war-time role and in turn has been strongly 
influenced by the martial situation. 4 
The outbreak of the European war in 1914 found the petroleum 
industry of the United States suffering from a period of low prices 
and depression occasioned by a gross overproduction in the Mid- 
Continent field, due principally to the remarkable yield of the noto- 
1 A good picture of the problems facing the petroleum industry is painted by Bacon 
and Hamor, The American Petroleum Industry, 1916, pp. 798-806. 
2 The principle of multiple production has tremendous significance for the future ; it is 
more fully treated on pages 67-70 of this paper and in Bulletin 102, part 5, of this 
series. 
3 This matter, for coal, may be followed in greater detail in Bulletin 102, part 4, of 
this series. 
4 A good account of the war reactions of petroleum is given by John D. Northrop, Our 
mineral supplies : Petroleum, Bulletin 666-DD, U. S. Geological Survey, 1917. 
