The Present Status of the Petroleum Industry in the United States - Rise Of The Industry

The oil industry had its inception in the United States in 1859 when the first oil well was drilled by Col. Drake at Titusville, Pennsylvania. From, a production of 2000 barrels for that year there was a slow but steady increase, with some fluctuations, up to 1901 for which year the output was approximately 69,389,194 barrels. Since that time the production has increased with leaps and bounds due to the rapid rise of the automotive industry, the widening use of oil as a fuel under boilers and the development of the. Diesel engine. The production for 1921 is estimated to have been 469,639,000 barrels. During the same year more than 125 millions of barrels were imported from Mexico. The oil industry, including the production, transportation, refining and distribution of petroleum and its products, is now the third largest in the country. Present Condition of the Industry During and immediately after the war the demand for petroleum exceeded the domestic production plus the imports from Mexico with the result that our storage oil was heavily drawn upon. Prices for crude exceeded all previous levels in the history of the industry. Pennsylvania crude sold for $6.10 per barrel and Mid-Continent crude for $3.50. Such prices stimulated wildcatting greatly with the result that several important new oil pools were discovered. Then as production increased the depression came which caused a large falling off in consumption. Pennsylvania crude fell to $2.25 per barrel and Mid-Continent to $1.00. Large oil companies such as the Standard, Sinclair and Empire took advantage of the situation, erected additional storage tanks and bought up millions of barrels to hold until better prices returned. Prices have already improved owing to a better market, but the domestic production coupled with the Mexican importations is still in excess of the demand with the result that the surplus is being stored. At the close of the year 1921, the U. S. Geological Survey estimates that there were 183,890,000 barrels of crude in storage in this country, the largest stocks in the history of the industry, yet an amount sufficient to supply the country for only 119 days at the present rate of consumption. Price reductions are again anticipated in some quarters but in view of the probable falling off in the Mexican output in the near, future due to the rapid rate of exhaustion of several of the most important pools and in view of the expected increase in consumption of gasoline and kerosene during the spring and summer months it is more likely that the present price level will be maintained. Present Sources of Domestic Supply Seven major oil fields are recognized by the U. S. Geological Survey in the United States. These are the Appalachian, Lima-Indiana, Illinois, Mid-Continent, Gulf Coast, Rocky Mountain and California. Two of these, Mid-Continent and California, supply about seventy-five per cent of the present total domestic output