The Dominion. SATURDAY, JULY 17, 1920. THE RACE FOR OIL

Dominion, Volume 13, Issue 251, 17 July 1920, Page 6

The Dominion. SATURDAY, JULY 17, 1920. THE RACE FOR OIL

One of the most perplexing problems by-'which the leading nations of the world arc confronted to-day is that of securing adequate and /Continued supplies of the mineral oil which is in ever-increasing demand for industrial and transport purposes, and hotjeast as an indispensable naval fuel. It has been 1 - said that the efficient mechanism of the British Empire depends absoktely upon oil in this new ago of 'transport: the age of motor-driven vehicles and machines, oil-driven ships, and aviation. As much might be said of the whole civilised world, and cause for. modifying the statement will appear only when it is found possible to produce a cheap and efficient substitute for mineral oil in such quantities as will satisfy .demands. At present, except within narrow limits, the production of substitutes has hardly got past the experimental stage. Somo authorities consider that there is no --reason why power alcohol should not be produced by the systematic growth of suitable crops in suitable areas—chiefly the tropical and subtropical regions of which.the British Empire contains its full share —but meantime the demand for oil is rapidly outpacing the supply and it may be a long time before this state of affairs is appreciably altered. "Whon the whole position is carefully' considered," one British authority stated recently, "it is evident that supplies, no matter where the oil is obtained, will never exceed the constantly increasing demand." He observed also that "practically the whole of the shipping industry of the world would be diverted to the consumption of oil were, it known that sufficient supplies would be available at ports of call" and that "the same -applies to practic-' ally all the important railways in the world, leaving out the question altogether of the already considerable quantities of motor spirit required for aerial craft, but by far and away the greatest consumption for years to come will bo .called for in connection with motor traction, which is. already expanding in a manner unprecedented." British capitalists arc showing creditable enterprise in the development of additional sources of oilsupply, but there seems to be little enough foundation for the charge freely raised in the United States that Great Britain is trying to monopolise the world's future /oil supply. In disproving this accusation, Sir Auckland Geddes (British Ambassador) recently made tho following observations to an American audience:'

■ Seventy per cent, of the world's oil output is from your own soil, and all of .that, whatever the ownership of the' capital may be-and it is certainly overwhelmingly not British—:s capablo in time of emergency of being brought under the control of.your Government. Sixteen per cent, of the world's output comes from Mexico, and American capital controls three-fourths of the Mexican yield. In addition, your nationals have either secure production or have been prospecting in at least ten other countries. I do not know what the output amounts to in these countries, but even ignoring ir, you have 82 per cent, of the present world supply of oil under your control. Now for the alleged oil monopolist. The British Empire's total production is about 2£ per cent, of the world's supply, while the supply of Persian oil, which is controlled bv British capital, :s about 2 per cent. . . But it has been snsrgcsTcd that Britain has secured such rights over undeveloped oil that she will have a monopoly in the future. When? Where? I sec Baku and Batmn mentioned. Britain does not own Baku or Batum. . . . Next_ I see Mesopotamia and Palestine mentioned. Britain does not own cither Mesopotamia or Palestine. . . . As regards these two countries the British Government as trustee representing the League of Nations has forbidden all surveys and the acquisition of oil rights unt : l the new Governments have been constituted and can deal with ' these problems for themselves. This interdict applies Hfiially in British subjects and to nationals of all other countries.

Sie Auckland Geddes might have addod, if he had cared, that the United States is at present consuming much, more than its fair share of the available oil supplies— at all events a larger share than "it can hope- to obtain as time goes on. Figures of recent date show that the United States is consuming more, than 400 million barrels of oil per year as against 200 million barrels consumed by the rest of the world The danger that international rivalries may arise over the control and distribution of oil supplies is perhaps real, but on the facts in sight the measures that are being taken to ensure continued supplies for the Empire give, no just occasion for complaint in America of anywhere else. The aspect of the matter which commands more serious attention is

that it will apparently be extremely difficult to secure such supplies as will adequately meet demands. For the moment the Empire is badlv placed in comparison with the United States to which ifc must look in the immediate future for tho bulk of its supplies. Evidently, however, the enterprising development of new fields in which British capital has been invested will before long represent the only alternative to such a dearth of oil fuel ns would seriously cripple- land and sea transport and industry, hot to mention aviation, throughout the Empire. The rate at which new supplies will be .made available and tho volume they would attain are more or less problematical, It is estimated, however, that by the end of 1922 the Anglo-Persian Company will be able to place 500,000 to 000,000 tons of oil per annum on the British market—an amount equivalent to about-80 per cent, of the _ present consumption. British capital has also been expended freely, and it is hoped, not altogether without result, in developing oil resources in Centia'l and South America and elsewhere.

The position as a whole of course has its full significance for this country, where the shortage of oil and petrol, in ever-increasing demand for purposes of transport and industry, is already severely felt. In such ' circumstances as obtain there is point in the suggestion lately made to the Government by Mr S. G. Smith, M.P., that the Imperial Government should be asked to give attention to the oil deposits that exist, though they have not yet been effectively tapped, in this Dominion. Action on these lines has already been taken by the Australian Federal Government, which is placing tho whole of the oil-boring operations at Papua in charge 0! the Anglo-Persian Company, operations being extended to captured German territory. An exhaustive prospect of the New Zealand doposits might perhaps be arranged under, similar conditions, If ft were crowned with success the result wouldbc tho effective utilisation of a vitally important and valuable national and Imperial asset.