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By M. Albertson

The purposes of this statement are to define a problem that exists in regard to the estimation of developed petroleum reserves, to analyze the problem in an abstract manner, and to discuss it as an introduction to certain papers that follow. The problem is to devise and develop a suitable procedure to permit more accurate estimates of developed petroleum reserves. Part of the problem is to make such estimates available earlier in the life of any particular pool. The problem of securing more accurate estimates of developed petroleum reserves existed prior to curtailment of production. With curtailment, however, the problem became acute, some of the more prominent reasons being as follows: 1. The standard method of estimation depended on production-decline curves. This method is inapplicable while curtailment prevails and available methods arc insufficient. 2. The retarding influence imposed by wide open flow conditions upon overdevelopment is absent. Great losses of capital by overdevelopment can now occur before realization of the true situation occurs, or before effective steps can be taken to stop such wastage. This increases the need for early, accurate estimates. 3. Above-ground stocks have diminished and the equivalent of such supply tends more and more to be retained underground in the natural reservoirs. It becomes increasingly necessary to know accurately the amount of these stocks. To direct attention to an additional point of different nature: improved accuracy of reserve estimation can be obtained only by closer scrutiny of the factors that determine recovery. This examination and the resulting efforts to measure the effect of these factors in terms of ultimate recovery must tend to improve ultimate recovery. The statements regarding the acute nature of the problem also indicate to some extent the importance of the problem and the necessity of finding a solution. Developed reserves of the industry, and of individual opera-tors, are one of the great factors that properly should determine explora-

Jan 1, 1936

By J. D. Gill

Restriction programs in important raw-materials industries in foreign countries have been abandoned after lengthy trials. Presumably, failure has been a logical consequence of the attainment of objectives of the restrictive schemes in the early periods of their administration in defiance of economic law. In general, the chief objective has been the elevation of prices of the products of these industries. More conservative plans have sought the maintenance of a price structure that was in jeopardy at the time restriction was initiated. The course of the administrat'ion of restrictive measures can be traced by the result's of restriction, viz.: the creation or maintenance of highly profitable prices; the over-expansion of productive facilities; the accumulation of inventory; and finally, by the collapse of the price structure, which invariably has led to abandonment of the restrictive scheme. The theory and practice of restriction as applied to industries that have tried it are too well known to need detailing here. Restraint of Production of Crude Oil Regardless of the record of the catastrophic outcomes of restrictive measures in other industries, our industry has not been deterred from attempting restriction of crude-oil production. The assumed bases for success of our restrictive plan are clear. They follow from the fact that the physical characteristics of the petroleum industry differ from those of other industries that have tried restriction. Its raw material is a highly essential substance, a natural, exhaustible resource. The extent of its reserves is unknown, a fact that arouses the cooperative spirit of conservationists. At no time before the inauguration of restriction had its developed reserves been sufficient to supply more than the requirements for a few months without the help of new drillings. To a considerable extent its discovery involves the element of chance. Its economic production seems to require an unnatural relationship; namely, cooperation among competitors, because it is a fugitive resource, capable of moving from under one owner's property to underlie another's. Thus its recovery presents intricate legal questions concerning property rights.

Jan 1, 1934

By Joseph E. Pogue

The petroleum industry has been involved in Lore collective planning than any other American industry, with the exception of the railroads and utilities, and therefore is of interest as a case study in the experimental attempts to regulate the economic consequences of free competition. Planning is of course an integral part of effective management, hence at the outset a distinction must be clearly drawn between competitive planning and collective planning. By competitive planning is meant the aggregate of plans drawn up and prosecuted by the competing units occupying a field of enterprise; by collective planning is meant a collusion of plans, either originating among some or all competitors, or else imposed upon them, whether accepted or resisted, by some superior authority, usually the state. The prevailing popular concept of "planning" as applied to industry appears to be a program of conduct superimposed upon an industry unwilling or incapable of achieving a socially and economically desirable result under free competition. In this brief and tentative analysis of the subject, competitive planning is left to one side and attention is focussed upon the matter of collective planning as defined above. A basic functional difference between the two categories of planning is that in the case of competitive planning the individual plans are small, numerous, and tend to offset one another when in error; whereas in the case of collective planning, the separate plans are larger in scope, fewer in number, and tend to escape the incidence of the principle of compensation. In viewing the evolution of collective planning in the petroleum industry we find that during the past 20 years there have developed four more or less well defined collective plans and that at the present time the industry is deeply involved in a collective planning trend pointing toward further varieties. The four plans, which are to some degree transitional, may be conveniently named from the chief incidents that led to their formulations. The first collective plan was the program of control developed during the World War and hence called the war plan. The second plan was one originating within the industry in the period between the war and the inflation of the late twenties and called the inventory

Jan 1, 1935

By Albert McIntosh

One of the most interesting as well as important factors connected with the petroleum industry is the consumption of motor fuel. A few years ago we always spoke of "gasoline," but when natural gasoline and benzol became more important it seemed desirable to include all of these products in the petroleum statistics and so there was adopted the term "motor fuel," which embraces these three products in their entirety. Gasoline always included all stove and motor gasolines, high-grade naphthas, cleaning naphthas, solvents, varnishmakers' and painters' naphtha and gas-machine gasoline. "Motor fuel" includes all of these products also; therefore, technically the term "motor fuel" is incorrect, but as the total quantity of these non-motor naphthas is small their inclusion does not distort the results to any appreciable extent. When the Federal Oil Conservation Board appointed its first semiannual forecasting committee early in 1930 to project the demand for gasoline and crude oil into the year 1930, it was necessary for that committee to formulate a method of forecasting. It adopted the system in use by some of the oil companies at that time, of using automobiles and per-car consumption. Six months later the American Petroleum Institute also formed a committee for forecasting, which adopted the committee principle of asking each member to produce his own forecast of demand by any method he thought best and to give a full explanation to the committee. The result of the latter method was to get the benefit of as many different methods of forecasting demand as there were members. The writer does not recall any two members ever using exactly the same method. By studying the different forecasts and their methods, there evolved a composite opinion, which was presented to the industry as the committee's estimate. The same method has been followed by the American Petroleum Institute or Planning and Coordination Committee ever since.

Jan 1, 1935

By Northcutt Ely

A year ago the petroleum code was in effect, and Congress had before it bills with powerful backing designed to extend and put on a permanent basis the Federal authority impliedly recognized in the petroleum code. Those men in the industry who were convinced of the unconstitutionality of Federal regulation, who believed in conservation, and who were seeking accomplishment of a conservation compact among the oil-producing states, were at that time encountering difficulties in bringing about such an agreement. Since then there has been a shift in the center of gravity. Today, by virtue of the Supreme Court's Schechter case decision, the petroleum code is not in existence, the industry is not operating under an oil administrator, and the Federal-control bills are not on Congress' calendar. In view of what the Supreme Court has said in the Schechter case and the Hoosac Mills case about the local character of mining and manufacturing, the problem today is not whether the Federal Government or the State Governments ought to regulate oil production, but how effective we can make the devices that are available to us under the constitution for the conservation of the nation's oil resources. The interstate oil conservation compact ratified during the past year by Texas, Oklahoma, Kansas, New Mexico, Colorado and Illinois, approved by Congress, but not yet in effect in California, is the mechanism now at work. Interstate Oil Conservation Compact What is this interstate compact? The basic theory is simple and logical. It has four elements to it. The first point is that in order to effect the maximum recovery of our oil arid gas reserves it is necessary for some governmental authority to regulate the way in which those resources are taken out of the ground, so that the reservoir energy is efficiently used, and used equitably by the various owners of the pool. Second, that the state, as distinguished from the national government, possesses the police power necessary to protect the public interest and to protect the correlative rights of the common owners of the oil pool. Third, that the state governments ought to cooperate with each other through an interstate advisory commission so that orderly production in one state is

Jan 1, 1936

By Northcutt Ely

A year ago the petroleum code was in effect, and Congress had before it bills with powerful backing designed to extend and put on a permanent basis the Federal authority impliedly recognized in the petroleum code. Those men in the industry who were convinced of the unconstitutionality of Federal regulation, who believed in conservation, and who were seeking accomplishment of a conservation compact among the oil-producing states, were at that time encountering difficulties in bringing about such an agreement. Since then there has been a shift in the center of gravity. Today, by virtue of the Supreme Court's Schechter case decision, the petroleum code is not in existence, the industry is not operating under an oil administrator, and the Federal-control bills are not on Congress' calendar. In view of what the Supreme Court has said in the Schechter case and the Hoosac Mills case about the local character of mining and manufacturing, the problem today is not whether the Federal Government or the State Governments ought to regulate oil production, but how effective we can make the devices that are available to us under the constitution for the conservation of the nation's oil resources. The interstate oil conservation compact ratified during the past year by Texas, Oklahoma, Kansas, New Mexico, Colorado and Illinois, approved by Congress, but not yet in effect in California, is the mechanism now at work. Interstate Oil Conservation Compact What is this interstate compact? The basic theory is simple and logical. It has four elements to it. The first point is that in order to effect the maximum recovery of our oil arid gas reserves it is necessary for some governmental authority to regulate the way in which those resources are taken out of the ground, so that the reservoir energy is efficiently used, and used equitably by the various owners of the pool. Second, that the state, as distinguished from the national government, possesses the police power necessary to protect the public interest and to protect the correlative rights of the common owners of the oil pool. Third, that the state governments ought to cooperate with each other through an interstate advisory commission so that orderly production in one state is

Jan 1, 1936

By N. D. Gerald

The mathematical analysis, which is an essential part of this paper, has revealed the interesting fact that contrary to the opinions of many, determinate and measurable economic factors are largely responsible for the price of crude oil. It should, however, be well understood that the results of this analysis are applicable, without qualification, only to the particular period and market studied. There are certain peculiarities of the petroleum industry which make the consideration of its economics very difficult, and at times practically impossible. Noneconomic factors often become highly important and have serious economic effects, which make unqualified predictions based on economic data extremely hazardous and ill advised. However, in spite of the attendant difficulties there are many problems, especially in price analysis, to which approximate solutions must be made for the proper guidance of public and private policy, but their limitations should be kept clearly in mind. An understanding of the nature of prices is of fundamental importance for a number of purposes. Measurement of the motivating factors giving rise to trends and other price movements is essential to forecasting for the intelligent engineering and financial administration of the industry. The fixing of prices, maintenance of an intelligent industrial dictatorship, or the making of other industrial adjustments, demand, for success, an accurate understanding of their probable consequences. The establishment of a system of equitable relations within an industry, or between industries, by methods other than the natural competitive ones, requires a thorough knowledge of the price structures and the nature and trends of the normal and basic prices of their products. This research has shown that in this case, even though the statistical records are only fair, quantitative economics offers a direct and satisfactory approach to the problems of economic consequences dependent on the reactions of mass intelligence. A consideration of commodity prices naturally leads to costs. The true cost of petroleum is so complex and elusive that its accurate deter-

Jan 1, 1934

By V. R. Garfias, R. V. Whetzel

It has been repeatedly questioned whether estimates of oil reserves are of any practical value, as the greater number of such calculations previously made have subsequently been proved to be grossly inaccurate. But even admitting partial justification for such statements, it must be evident that some idea, however approximate, of the available reserves of essential minerals—petroleum included—is of vital importance in mapping their development and the future trend of the related industries, particularly if it is kept constantly in mind that these estimates are not only never intended as a final word but must continually be subject to revision in accordance with the changes in their component factors. The value of these estimates, therefore, hinges on the clear understanding of what is meant by reserves and that the figures can only apply within the limited time when the controlling factors remain unchanged. It should be understood, further, that while estimates of possible and probable oil deposits are as a rule but idle conjectures, appraisals of proven oil reserves can undoubtedly be made with an ever-increasing degree of accuracy. And it is with this in mind that in the present study the endeavor has been to estimate only the world's proven oil reserves and to leave out of consideration the questionable volume of the probable and possible oil reserves. Such a survey presupposes further a clear distinction between the known amount of oil underground in proven fields at any one time, and the proven reserves: the portion that can be economically brought to the surface and made available for utilization. Only a fraction of the petroleum stored underground in proven fields— usually associated with natural gas—is or can be economically brought to the surface, and not all of the oik brought to the surface is economically utilized; also, although practically all the natural gas can be economically recovered and utilized, in actual practice a large part of the total volume that reaches the mouth of the well is wantonly blown into the air and wasted. It is thus estimated that in the United States only some 25 per cent of the petroleum stored underground in proven fields is actually brought to the surface; and in actual practice close to 25 per cent of the total gas produced is now absolutely wasted. And the dissipation of this

Jan 1, 1936

By V. R. Garfias, R. V. Whetzel

It has been repeatedly questioned whether estimates of oil reserves are of any practical value, as the greater number of such calculations previously made have subsequently been proved to be grossly inaccurate. But even admitting partial justification for such statements, it must be evident that some idea, however approximate, of the available reserves of essential minerals—petroleum included—is of vital importance in mapping their development and the future trend of the related industries, particularly if it is kept constantly in mind that these estimates are not only never intended as a final word but must continually be subject to revision in accordance with the changes in their component factors. The value of these estimates, therefore, hinges on the clear understanding of what is meant by reserves and that the figures can only apply within the limited time when the controlling factors remain unchanged. It should be understood, further, that while estimates of possible and probable oil deposits are as a rule but idle conjectures, appraisals of proven oil reserves can undoubtedly be made with an ever-increasing degree of accuracy. And it is with this in mind that in the present study the endeavor has been to estimate only the world's proven oil reserves and to leave out of consideration the questionable volume of the probable and possible oil reserves. Such a survey presupposes further a clear distinction between the known amount of oil underground in proven fields at any one time, and the proven reserves: the portion that can be economically brought to the surface and made available for utilization. Only a fraction of the petroleum stored underground in proven fields— usually associated with natural gas—is or can be economically brought to the surface, and not all of the oik brought to the surface is economically utilized; also, although practically all the natural gas can be economically recovered and utilized, in actual practice a large part of the total volume that reaches the mouth of the well is wantonly blown into the air and wasted. It is thus estimated that in the United States only some 25 per cent of the petroleum stored underground in proven fields is actually brought to the surface; and in actual practice close to 25 per cent of the total gas produced is now absolutely wasted. And the dissipation of this

Jan 1, 1936

By V. R. Garfias

A survey of the resources of mineral fuels, coal, petroleum and natural gas presupposes a clear distinction between the known amount underground and the "proven reserves"; the'portion that can be economically brought to the surface and made available for utilization. Only a fraction of the coal and petroleum in producing fields is or can be economically brought to the surface and not all of this is economically utilized; also, although practically all the natural gas can be economically recovered and utilized, in actual practice a large part of the total volume that reaches the mouth of the wells is wantonly blown into the air and wasted. It is thus estimated that of the total amount of coal underground about 40 per cent remains unrecovered, or is otherwise wasted, before it reaches the consumer; that only some 25 per cent of the petroleum in proven fields is actually brought to the surface; and that even if practically the entire volume of natural gas can be economically utilized, in actual practice close to 25 per cent of the total produced is now absolutely wasted. And the dissipation of this gas, unwarranted as it is, not only diminishes the gas supply but diminishes also the proven reserves of petroleum from such fields as the Panhandle of Texas, where petroleum and natural gas are produced simultaneously. Many factors affect the estimates of the proven reserves of mineral fuels, such as the capacity and nature of the reservoir, its depth, the quality of the product, the efficiency of recovery, the price of the fuel and its byproducts, etc., etc., but superseding at times all of these in connection with petroleum and natural gas deposits is the effect of "subsoil ownership" on the rate and methods of exploitation of the deposits. As a result it should be a comparatively simple matter to eliminate waste and overproduction, and thereby increase the proven reserves of petroleum and natural gas, in Russia, Iran and Iraq, where the subsoil rights are nationalized, or in any country in which there is or can be quickly established an effective legal control of the underground deposits and the manner of their exploitation. It has been and it is now, on the other hand, almost an impossible undertaking to intelligently regulate the petroleum and natural gas production in the United

Jan 1, 1935

By H. W. Page

Petroleum requirements since V-J day have been appreciably higher than predicted. Foreign operations now exceed maximum wartime levels by about 14 per cent. Domestic operations since V-J day have averaged 92 Per cent of the wartime peak. In spite of maximum foreign refinery runs, large exports of all products, except residual fuel oil, are necessary to meet foreign demand. During the next few years it is expected that foreign operations will continue at capacity, including new installations, but that, because of increases in foreign demand, exports will continue at about their present level. Domestic operations will increase during this period and crude production probably will exceed maximum efficient rates. Even after 10 years some exports probably will be required, but eventually these will be supplanted by increased output of foreign refineries, except for small tributary exports. The increase in domestic requirements will exceed the decline in exports. Unless findings of crude oil exceed present expectations, the increasing demand will be met by increased imports and synthetic methods-—such as the Hydrocarbon Synthesis Process for conversion of natural gas and coal to gasoline and distillates. Catalytic cracking installations will increase as crude availability decreases. This will help to meet the increasing demand for gasoline but will intensify the domestic shortage of residual fuel oil. Eventually larger imports will be required to satisfy the demand for this product. Introduction Under the pressure of the wartime period, there was time only occasionaly to look ahead in anticipation of what the postwar era held for the petroleum industry. Perhaps the general expectation was that a rather pronounced decline in the level of industry petroleum operations would take place shortly after the end of the war, with the impact felt mainly on the economy of the United States- It is of interest now, nine months after V-J day, to take inventory of the near-term situation and see what significant forces are at work. With this as a starting point, it should be possible to engage in something more satisfactory than pure speculation concerning trends in the immediate future and 10 to 20 years ahead. Present and Near-term Situation During the nine-month period following V-J day, foreign crude oil production and rebery operations have actually increased the These activities were at maximum capacity on V-J day but the continuation of drilling programs, the completion of new and rehabilitated refineries and of transportation facilities during the Past nine months have increased the foreign capacity. This added capacity has been fully utilized. Foreign crude oil production in May 1946 is about 14 per cent higher than during July 1945 and refining operations some 12 per cent higher' During the same period there has been a falling off in similar activities within the

Jan 1, 1947

By H. W. Page

Petroleum requirements since V-J day have been appreciably higher than predicted. Foreign operations now exceed maximum wartime levels by about 14 per cent. Domestic operations since V-J day have averaged 92 Per cent of the wartime peak. In spite of maximum foreign refinery runs, large exports of all products, except residual fuel oil, are necessary to meet foreign demand. During the next few years it is expected that foreign operations will continue at capacity, including new installations, but that, because of increases in foreign demand, exports will continue at about their present level. Domestic operations will increase during this period and crude production probably will exceed maximum efficient rates. Even after 10 years some exports probably will be required, but eventually these will be supplanted by increased output of foreign refineries, except for small tributary exports. The increase in domestic requirements will exceed the decline in exports. Unless findings of crude oil exceed present expectations, the increasing demand will be met by increased imports and synthetic methods-—such as the Hydrocarbon Synthesis Process for conversion of natural gas and coal to gasoline and distillates. Catalytic cracking installations will increase as crude availability decreases. This will help to meet the increasing demand for gasoline but will intensify the domestic shortage of residual fuel oil. Eventually larger imports will be required to satisfy the demand for this product. Introduction Under the pressure of the wartime period, there was time only occasionaly to look ahead in anticipation of what the postwar era held for the petroleum industry. Perhaps the general expectation was that a rather pronounced decline in the level of industry petroleum operations would take place shortly after the end of the war, with the impact felt mainly on the economy of the United States- It is of interest now, nine months after V-J day, to take inventory of the near-term situation and see what significant forces are at work. With this as a starting point, it should be possible to engage in something more satisfactory than pure speculation concerning trends in the immediate future and 10 to 20 years ahead. Present and Near-term Situation During the nine-month period following V-J day, foreign crude oil production and rebery operations have actually increased the These activities were at maximum capacity on V-J day but the continuation of drilling programs, the completion of new and rehabilitated refineries and of transportation facilities during the Past nine months have increased the foreign capacity. This added capacity has been fully utilized. Foreign crude oil production in May 1946 is about 14 per cent higher than during July 1945 and refining operations some 12 per cent higher' During the same period there has been a falling off in similar activities within the

Jan 1, 1947

By Joseph E. Pouge

For the purposes of this analysis it is assumed that the petroleum industry has undergone a basic economic change whereby the degree of competition present in its operation is reduced by the collective control of production brought about by statme-directed proration. Formerly freely competitive in all its parts, the industry is now fully competitive only in its marketing, its manufacturing and transportation, its search for new oil supplies, its drilling operations (with some qualifications), and its capital movements. The practical problem before the industry in its new status is the maintenance of equilibrium, with planned control of crude-oil production (proration) substituted for competition and price as the regulatory mechanism at one point in the supply-demand system. It is further assumed that proration has become so firmly established in the legal and operating framework of the business that it may be looked upon as an institution. The purpose of this paper is to call attention to the effect of unregulated drilling upon the orderly functioning of proration. Economic Structure of Petroleum Industry The economic structure of the petroleum industry, under the current form of proration, may be visualized, in simplified form, as shown in Fig. 1. This diagram is designed to indicate the existing mechanism whereby supply and demand are equated. Demand is created largely by conditions external to the oil business, whereas supply is conditioned by a series of stages incidental to the discovery, development and production of a resource. The time elements involved in changes in demand and supply are of an entirely different order, the demand factor being much more flexible and "quicker" than the supply factors. It should be observed, also, that the position of price, formerly between "demand" and "supply," has been moved to a sidewise location where it still affects demand but influences current supply only through its bearing upon proration, drilling and search. Proration has been substituted for price as a throttle at the well head, but at this point only. The mechanism now works in this fashion: a declining price stimulates demand and the

Jan 1, 1936

By Joseph E. Pouge

For the purposes of this analysis it is assumed that the petroleum industry has undergone a basic economic change whereby the degree of competition present in its operation is reduced by the collective control of production brought about by statme-directed proration. Formerly freely competitive in all its parts, the industry is now fully competitive only in its marketing, its manufacturing and transportation, its search for new oil supplies, its drilling operations (with some qualifications), and its capital movements. The practical problem before the industry in its new status is the maintenance of equilibrium, with planned control of crude-oil production (proration) substituted for competition and price as the regulatory mechanism at one point in the supply-demand system. It is further assumed that proration has become so firmly established in the legal and operating framework of the business that it may be looked upon as an institution. The purpose of this paper is to call attention to the effect of unregulated drilling upon the orderly functioning of proration. Economic Structure of Petroleum Industry The economic structure of the petroleum industry, under the current form of proration, may be visualized, in simplified form, as shown in Fig. 1. This diagram is designed to indicate the existing mechanism whereby supply and demand are equated. Demand is created largely by conditions external to the oil business, whereas supply is conditioned by a series of stages incidental to the discovery, development and production of a resource. The time elements involved in changes in demand and supply are of an entirely different order, the demand factor being much more flexible and "quicker" than the supply factors. It should be observed, also, that the position of price, formerly between "demand" and "supply," has been moved to a sidewise location where it still affects demand but influences current supply only through its bearing upon proration, drilling and search. Proration has been substituted for price as a throttle at the well head, but at this point only. The mechanism now works in this fashion: a declining price stimulates demand and the

Jan 1, 1936

By J. E. Pogue

That the domestic consumption of gasoline displays a marked seasonal variation, with a low in the winter and a high in the summer, is well known. It is logical to expect that the nature of the variation has itself been undergoing a change as a result of improvement in roads, general employment of closed cars, and growth of mass haulage; but so far as I am aware the change in seasonal variation has never been investigated and measured. It is the purpose of this paper to present the method and results of such an investigation, undertaken as a contribution to the technique of planning operating schedules now so prominent in connection with the functioning of the industry under a Federal quota system. For the method employed I am indebted to the suggestions and help of Frederick R. Macaulay,1 who kindly looked over the work sheets; and

Jan 1, 1934

By V. R. Garfias

With the exception of the United States and Russia, none of the leading world powers have within their boundaries the oil supplies needed to meet present peace-time requirements, and even in regard to the United States it is admitted by competent observers that the known oil reserves within the country are inadequate to meet demands for more than a comparatively few years. It follows, therefore, that the transportation of petroleum—almost entirely by tank steamers—from foreign fields to the main consuming centers is one of the most important factors affecting the present and future development of the oil industry. The world-wide distribution of petroleum is affected by numerous factors of which international politics is not the least important. The assurance of an ample supply of petroleum—one of the most essential munitions of war—is of paramount importance particularly to those countries subjected to the rivalries of powerful neighbors. And paralleling the importance of the control of an ample supply is that of its safe transportation from the fields to the consuming centers. To illustrate: France is dependent almost entirely on foreign sources for its petroleum requirements estimated at close to 100,000 bbl. daily, and in order to control such a supply after the World War it acquired an interest in the Iraq oil fields. Lately it has undertaken the construction of a pipe line from these fields to the Mediterranean seaboard in Syria with the expectation that late in 1934 these fields will supply between 30 and 40 per cent of the country's requirements. It should be noted, however, that the availability of this supply is entirely dependent on the safe operation in the Mediterranean at all times of an adequate fleet of tank steamers. Thus, in order to transport 40,000 bbl. daily, it will be necessary for one 10,000-ton tanker to leave Tripoli, the Syrian port, say for Marseille, every other day throughout the year while to meet the entire present peace requirements of France from the Iraq fields, a fleet of some 30 such tankers must be kept in continuous operation between Tripoli and Marseille.

Jan 1, 1934

By V. R. Garfias, R. V. Whetzel

It is estimated that world consumption of petroleum, its products and related fuels during 1935 will reach an all-time peak of 1,592,000,000 bbl. —about 5.4 per cent higher than in 1934. Demand increased within the United States approximately 6.1 per cent during 1935 and in foreign countries about 4.1 per cent. The figures in Table 1 indicate that during the past five years world's production of crude petroleum and related fuels exceeded demand every year and that the aggregate difference is approximately 239,000,000 bbl. The supply in the United States exceeded consumption by some 134,000,000 bbl. over the same five-year period, while outside the United States the excess over demand is shown to be 105,000,000 bbl. Table 2 combines the excess production in the United States with its favorable balance of exports over imports, showing that the United States has reduced its storage over the five years by about 132,720,000 bbl., and indicates that, including its excess of imports from the United States, the rest of the world may have an unfavorable balance of some 371,000,000 bbl. over the five-year period. Such difference in foreign countries is largely due to increase in stocks, and partly at least remains in our imperfect knowledge of consumption statistics as an unfavorable balance. Table 3

Jan 1, 1936

By V. R. Garfias, R. V. Whetzel

It is estimated that world consumption of petroleum, its products and related fuels during 1935 will reach an all-time peak of 1,592,000,000 bbl. —about 5.4 per cent higher than in 1934. Demand increased within the United States approximately 6.1 per cent during 1935 and in foreign countries about 4.1 per cent. The figures in Table 1 indicate that during the past five years world's production of crude petroleum and related fuels exceeded demand every year and that the aggregate difference is approximately 239,000,000 bbl. The supply in the United States exceeded consumption by some 134,000,000 bbl. over the same five-year period, while outside the United States the excess over demand is shown to be 105,000,000 bbl. Table 2 combines the excess production in the United States with its favorable balance of exports over imports, showing that the United States has reduced its storage over the five years by about 132,720,000 bbl., and indicates that, including its excess of imports from the United States, the rest of the world may have an unfavorable balance of some 371,000,000 bbl. over the five-year period. Such difference in foreign countries is largely due to increase in stocks, and partly at least remains in our imperfect knowledge of consumption statistics as an unfavorable balance. Table 3

Jan 1, 1936

By R. V. Whetsel, V. R. Garfias

Jan 1, 1934

By R. V. Whetsel, V. R. Garfias

For some time the writers have been compiling and analyzing statistics of consumption and production of petroleum, its products and related fuels, in order to arrive at a fairly accurate picture of the world-wide situation of the petroleum industry. In production, crude oil, natural gasoline, benzol and alcohol blended with motor fuel have been considered. In consumption not only refined products, but crude consumed as fuel, refinery losses, ships' bunkers and blended fuels have been taken into account to obtain a true balance between supply and demand. Statistics from practically every country and territory have been studied, and where actual figures were not available the estimates have been based on all the data available. The figures in Table 1 indicate that during the last five years the world's production has exceeded demand every year and that the aggregate difference is some 207,150,000 bbl. The supply in the United States exceeded consumption by 111,401,000 bbl. over the same five-year period and in 1931 and 1932 the demand exceeded supply, while outside the United States the excess of output over demand was 95,749,000 bbl. Table 2 combines the excess production in the United States with its favorable balance of exports over imports, showing that the United States has reduced its storage over the five years by about 136,-595,000 bbl., while in Table 3 it is shown that, including its excess of imports from the United States, the rest of the world has added 343,-745,000 bbl. to storage during the period in question, the greatest accumulation coming in 1934. Table 4 shows the world's consumption classified by countries according to the principal products. These tables also indicate that at the end of 1934 the statistical position of the petroleum industry outside the United States was decidedly unstable, a situation that probably will become more acute as a result of the added Iraq production; and that the present favorable statistical position of the industry in the United States, which is partly due to the excess of exports over imports, may be to some extent jeopardized by the unstable situation in the foreign market.

Jan 1, 1935