WORLD’S OIL RESERVES

Greymouth Evening Star, 14 November 1936, Page 3

WORLD’S OIL RESERVES

ONLY TWENTY YEARS’ SUPPLY It might seem peculiar, to report that Sir John Cadman’s statement to the World Power Conference ip Washington, that existing petroleum supplies will last only 20 years, aroused singularly little interest among Americans. Such, however, is the fact, says the London "Observer.” The paper was barely mentioned in the newspapers. It attracted little notice from the conference itself. The delegates seem to be more engrossed in the politics of electricity than with the technics of ; its sister miracleworker.

Nevertheless, .the stibject, of course, interests Americans vastly. One simply cannot envisage a world drained of the great American pool. Last year alone five-eighths of world production came from the United States. Of all the proven reserves at least half lie there. And the deprivation of this country of its industrial elixir is beyond contemplation. However, for the past generation the American public had been so often treated to these prognostications of imminent, exhaustion of its flowing gold that it has become immunised to them. Having seen 'new oil come into use fastin' than old reserves have been exhausted, the public is now inclined to think that the Cadmans are shouting. "Wolf.” Or shall we say that it feels that the United States must be a miraculous pitcher? Nevertheless, the known reserves amount to only 12 years’ supply at the current consuniption level. This supports Sir John Cadman’s statement. The layman would think that the industry itself would be ip a perpetual state of worry let alone the general public. And yet Axtell I. Byles began a recent presidential address at the American Petroleum Institute by saying: "Last year developed the comforting assurance that there are within'the confines' of the United States sufficient petroleum recserves to meet the needs of generations, if hot centuries. The important question to-day is not how much oil we have, but how to make the fullest,, widest, and best use of what we have.” The 12-year supply apparently does not bother the oil industry here.

Such confidence is derived primarily from the puncturing of past prognostications. New sources are constantly being tapped. Out of 21,000 wells drilled last year, 15,000 contained oil, and the liquid produced was sufficient to fill all last year’s demand. This is the enormous rate of production needed to keep the 12-year exhaustion period always in the distance —1,0(10,000,600 barrels. But Wallace A. Pratt, vice-president of the Humble Oil Company, shares Mr. Byles’s optimism. “It is perfectly safe to predict,”- he says in a recent article, “that many large new oil fields will be discovered in the United States in the future.”

TWO MILES DOWN The engineering genius’ of which Sir John Cadman is an eminent example, ekes out the American faith. Under old methods of drilling the sand which yielded the great flood of oil in East Texas had not seemed

very promising. Then six years ago a n'ew drill hit the Eastern rim of an enormous buried saucer, and a flood of oil gushed forth, revealing a mammoth strike. There new wells now go down as far as two miles. At this depth great tracts of subterranean America have been found swimming in liquid wealth. One such strike was made below the well-known Sante Fe field. It is possible, moreover, to go back to old wells and make them productive. All these possibilities exist in addition to the tremendous area —about 20 times the size of the United Kingdom—that still remains unexplored. It is officially described as “of geological formation which may contain oil.”

Other factors justifying this hopefulness lie in better utilisation. The chemist has come to the support of the engineer. He persists in showinghow to “crack” more petrol from crude oil. Nowadays twice as much is extracted to run the country’s motor-cars than was done when the experts began to make the people’s flesh creep about the impending depletion of reserves. Waste, moreover, is being eradicated by a new policy of Government conservation. When new fields in Texas, Oklahoma, ami California “blew off” in shrill protest against the dire prognostications—sights spectacularly registered in the newsreel — the flood overwhelmed the price structure and disrupted the entire industry. Oil magnates representing this second greatest industry in the land were among the first of the rugged individualists to plead with President Roosevelt for Federal control. The oil magnates are- now breathing easily for the first time in many years. When east Texas began to irrupt, oil became as cheap as water. Now it is well over 10 times as dear. Sir John’s report, which was not an expression of opinion, but merely a restatement of general technical estimates, thus fell on unresponsive soil. The fear here is not of the exhaustion of oil supplies. It is of another avalanche —the "bringing in” of new fields which might have the effect of reducing the infant controls to new chaos.