New York Paper - Future Demands on Oil Industry of United States (with Discussion)

In 1920, 531 million barrels of crude petroleum were coi~sumed in the United States. As imposing as this figure is, the fact that the domestic consumption of crude petroleum has increased at an average rate of 10 per cent. a year for the past decade is more striking. Will this rate of increase in demand continue? If so, the year 1930 will call for 1260 million barrels of petroleum—a staggering volume. On the other hand, may we expect the demand for petroleum to grow as rapidly as it did when the automotive industry was having its most phenomenal expansion? If not, to what extent will the growth of oil requirements decrease? When and to what degree will the petroleum industry become affected by the economic law of diminishing returns? Obviously, this matter requires careful analysis, especially as both national and industrial planning must be predicated upon present estimates of the requirements of the future. The purpose of this paper, accordingly, is to project, as closely as present limitations of knowledge permit, the course of the demand for petroleum in the United States over the next ten years. At first, the problem of estimating the future of a demand as complex as that for petroleum might appear insoluble. Fortunately, hon~ever, therc are several scientific methods of approaching the problem, centering around a study of rates of industrial growth, which lend considerable hope that the requirements of the immediate future in this field may be approximated with sufficient closeness to have practical value as a basis of action. Growth oF Petroleum Demand The demand for crude petroleum is the resultant of the demands for the products made jointly from this substance—gasoline, kerosene, gas and fuel oil, and lubricating oils. The demands for these have grown at