THE OTAGO DAILY TIMES Monday, June 12, 1944. OIL AND THE FUTURE

Otago Daily Times, Issue 25559, 12 June 1944, Page 4

THE OTAGO DAILY TIMES Monday, June 12, 1944. OIL AND THE FUTURE

The American Petroleum Administrator, Mr Harold L. Ickes, has put it on record that the United States has not sufficient petroleum reserves to “ oil another war.” The Truman Committee, in a report published last February, stated that at the present rate of depletion the known oil resources of the United States would be exhausted in 14 years. Those resources, together with the proved reserves of South America—comprehending the bulk of the Western Hemisphere supply—are estimated at 30 thousand million barrels; and the estimated reserves of the Eastern Hemisphere, including the Soviet Union, are 31.5 thousand million barrels. Yet at the present time the Middle' Eastern oilfields are producing not more than 6 per cent, as much oil as the Western Hemisphere. Russia has not yet developed her considerable estimated resources to meet all the war-time needs of the Red Army. The considerable oilfield in operation at Ploesti is for the present beyond Allied control, but its production iS not, in any case, comparable with that of the larger fields of the Eastern Hemisphere. The bulk of this known oil is in the Middle East, and Great Britain controls some 80 per cent, of current production in these fields. . The United States has potential concessions of great promise in Saudi Arabia, where an American monopoly was granted by King Ibn Saud, on the island of Bahrein and in a new field in the Sultanate of Kuwait, at the head of the Persian •Gulf, where British interests have equal rights. The Netherlands East Indies production, which is now in the hands of Japan, is the only other large source of supply, and contrary though it may be to the general impression, the output from these fields is scarcely comparable with that from American and Middle Eastern sources. It is against this background that the Governments of the United States and Great Britain, through their experts, and in collaboration with the- private producing interests which control most of the production, are discussing the future of oil supply. Pressure by American opinion to have a substantial part of the burden of supply removed from the United States reserves is understandable, even if it rests upon merely panic premises, but it tends to disregard the facts of the present position, when the bulk of oil for the Allied war effort is drawn from the immediately available sources. Since the largest of these is the United States, the draw-off can only be reduced gradually by British expansion of refining facilities in the Middle East, which haye already been very greatly increased during the war years, and by the development by the Soviet of her resources. The Russian requirement of machinery from abroad for this purpose has naturally slowed down enterprise—not to mention the all-absorbing demand on the Soviet people for direct support of the Red Army. The position is, therefore,that American oil resources will be depleted by their contribution to the common cause, and the United States will argue that some consideration must be allowed for the devouring of a non-replaceable asset. That is a proposition to which the other nations should be prepared to give assent. The plans which are suggested as having been tentatively approved in the AngloAmerican conferences, and endorsed in principle by Russia, are for a redistribution of production and supply of oil on a world basis, guaranteeing to each nation all the oil it needs, “ from the nearest source at the cheapest rate.” Such an agreement would possibly meet the special American position, since the United States controls, at home and abroad, more than half the proved oil resources in the world,, and it certainly offers a refreshingly rational solution of the problem of supply to the rest of the nations. The importahce of oil as a weapon of war has not been overlooked, as the conference is said to propose the strictest control to prevent supply to future aggressor nations. That proposal does not, unfortunately, offer a complete solution. Before the war Germany, for instance, was producing "synthetically one-third of her peace-time requirements of petroleum and had, of course, accumulated vast stores, which have been added to by the- seizure of stocks in occupied countries and by the output of Ploesti. The capacity, of the Reich to fight back has not, so far as can be judged, been greatly affected by limitation of oil supplies, though these must now have shrunk to a stage at which, with the cutting off of the Rumanian field, a shortage might I hasten Germany.’s collapse.