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OIL AND GAS COBSERVATION IB CALIFORNIA

A T h esis P r e s e n t e d t o t h e D ep artm en t o f E conom ics U n i v e r s i t y o f S o u th e r n C a l i f o r n i a

In p a r t i a l f u lf illm e n t o f th e R e q u ire m e n ts f o r th e D egree o f M a s te r o f A r t s

By A lv o r d L e s l i e Boeek May 2 8, 1930

UMI Number: EP44599

All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion.

Dissertation FWisMng

UMI EP44599 Published by ProQuest LLC (2014). Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code

ProQuest' ProQuest LLC. 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346

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CONTENTS C h a p te r I n t r o d u c t i o n .............................. I II III

,iii

The M eaning o f C o n s e r v a t i o n . ........................................................ . 1 3

The O c c u rr e n c e o f O il an d G a s . . ....................

The R e s o u r c e s a n d P r o d u c t i o n o f C a l i f o r n i a ............................. 7 The P e t r o l e u m R e s o u r c e s . . . . .

................8

P e tr o le u m a n d Gas P r o d u c t i o n . IT

...........

11

The H i s t o r y o f C o n s e r v a t i o n i n C a l i f o r n i a . . 16 The E a r l y S t e p s to w a rd C o n s e r v a t i o n . . The U r g e n t N e c e s s i t y

...................... . 1 7

f o r C o n s e r v a t i o n i n 1 9 2 1 ......... 21

C o n s e r v a t i o n i n V e n tu r a and Dominguez F i e l d s ........... .2 2 S t a t e I n t e r v e n t i o n i n 1 9 2 7 ........................................................26 S t a t e Laws R e g a rd in g C o n s e r v a t i o n , .................................. 29 T

The M ethods o f C o n s e r v a t i o n . ......................................

34

The C o n s e r v a t i o n o f N a t u r a l Gas i n P r o d u c t i o n . . . . . 3 4 The C o n s e r v a t i o n o f P e t r o l e u m i n P r o d u c t i o n . . . . . . . 4 2 The U n it P l a n .

..................

.4 8

C o n s e r v a t i o n i n t h e U t i l i z a t i o n o f P e t r o l e u m ........... .5 2 VI

V II

The L e g a l A s p e c ts o f C o n s e r v a t i o n . . . . . . ............................. 56 The Gas C o n s e r v a tio n

Law .

The S a n ta Fe S p r i n g s

C a s e .........................................................61

..........

C o n s e r v a t i o n b y C o o p e r a t i o n ................................ The S t a t e C u r t a i l m e n t P ro gram o f 1 9 2 9 ...........

.5 7

66 67

ii

The S a n ta We .S p rin g s A g re e m e n t................... * ...................*. 70 . ....................................... 70

The S i g n a l H i l l A g re e m e n t

V III

The Elwood A g re e m e n t.....................

71

The X e tt le m a n H i l l s A g re e m e n t...............................

72

The S t a t e C u r t a i l m e n t P ro g ram o f 1 9 3 0 . ..............

78

The R e s u l t s o f t h e C o n s e r v a t i o n M o v e m e n t . .. .................. .8 2 P ro d u c tio n C u r ta ilm e n t.

..................

.8 2

E f f e c t i v e C o n s e r v a t i o n L e g i s l a t i o n . . . ............... . . . . . . 8 2 S u cce ssfu l C o o p e ra tio n .. . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3 Im p rov em en ts i n T e c h n i q u e . ...............* .....................

*84

D evelopm ent o f a C o n s e r v a t i o n A t t i t u d e . . . . . . . . . . . * 8 4 IX

C o n c l u s i o n . ........................................ The H a t u r a l Gas O u t l o o k . . . . . . . . . . .............. The P e t r o l e u m O u t l o o k .........................

B i b l i o g r a p h y ...................... A p p e n d ix .................................

87 67 .8 8

*................. 90 .9 6

IHTRQDUCTIOIT

P e t r o l e u m an d n a t u r a l g a s c o n s t i t u t e a b le n a tu r a l re so u rc e s of C a lif o r n ia .

two o f tlie v a l u ­

S in c e t h e d r i l l i n g o f

t h e D rake w e l l i n P e n n s y l v a n i a i n 1859 p e t r o l e u m h a s become i n c r e a s i n g l y i m p o r t a n t i n o u r econ om ic a c t i v i t i e s #

Prom a

v e r y i n s i g n i f i c a n t a p p l i c a t i o n t o t h e econom ic n e e d s o f t h e p e o p l e s e v e n t y y e a r s a g o , p e t r o l e u m h a s to d a y become a lm o s t e s s e n t i a l t o o u r p r e s e n t mode o f l i v i n g ,

The tre m e n d o u s

amount o f m a c h in e ry w h ic h i s now i n u s e d e p e n d s a l m o s t e n ­ t i r e l y up on p e t r o l e u m l u b r i c a n t s , w h i l e t h e im p o r ta n c e o f p e t r o l e u m t o o u r means

of tra n s p o rta tio n i s v is ib le

sid e s.

o f t h i s com m odity c a n w e l l b e a p p r e c ­

The im p o r ta n c e

i a t e d by im a g in in g i t s su d d e n w it h d r a w a l fro m u s e .

on a l l

Such a n

e v e n t w o uld r e s u l t i n a su d d en d i s r u p t i o n o f m ost o f o u r a c ­ t i v i t i e s an d i n a su d d e n r e t a r d i n g o f o u r means o f p r o d u c t i o n . A lth o u g h o f l e s s i m p o r t a n c e , n a t u r a l g a s i s a l s o an

im p o rta n t

re s o u rc e of C a lif o r n ia

e x te n t as

a fu el*

as i t i s u t i l i z e d t o a l a r g e

N a t u r a l g a s , h o w e v e r, h a s n o t y e t b e e n a d a p t e d to

o u r econom ic n e e d s t o t h e e x t e n t t h a t p e t r o l e u m h as* I n v ie w o f t h e s i g n i f i c a n t p l a c e w h ic h t h e s e r e s o u r c e s o ccu p y i n o u r p r e s e n t ec o n o m ic o r g a n i z a t i o n and i n v ie w o f t h e o f t e n c a r e l e s s a n d u n e c o n o m ic a l m anner i n w h ic h t h e y h av e b e e n e x p l o i t e d , t h e i r c o n s e r v a t i o n i s a v i t a l p ro b le m t o d a y . The p r o b le m i s p a r t i c u l a r l y i m p o r t a n t i n C a l i f o r n i a ,

I t has

iv t a k e n a c o n s i d e r a b l e l e n g t h o f tim e t o a c c o m p l i s h a c t u a l c o n ­ s e r v a t i o n , b u t now c o n s e r v a t i o n i s b e i n g

em p h asized i n t h e

p e t r o l e u m and n a t u r a l gas i n d u s t r i e s o f C a l i f o r n i a * I t i s t h e pui^pose o f t h i s t h e s i s t o make a s t u d y o f o i l an d g a s c o n s e r v a t i o n i n C a l i f o r n i a .

The m eaning o f c o n s e r v a ­

t i o n , t h e o c c u r r e n c e o f o i l and g a s , and th e r e s o u r c e s and p r o ­ d u c tio n of C a lifo rn ia w i l l be tr e a t e d b r i e f l y .

A survey o f th e

h i s t o r y o f c o n s e r v a tio n in C a lif o r n i a w i l l th e n be p r e s e n te d . The e a r l y e v e n t s l e a d i n g t o c o n s e r v a t i o n w i l l be t a k e n up i n d e t a i l , b u t Ihe g r e a t e s t a t t e n t i o n w i l l b e d e v o t e d t o t h e c o n ­ s e r v a t i o n d e v e lo p m e n ts w h ic h h a v e a r i s e n a s a r e s u l t o f t h e Gas C o n s e r v a t i o n la w o f 1 9 2 9 .

B y w a y of c o n c l u s i o n a n a t t e m p t

w i l l b e made t o d e te r m in e th e n a t u r a l g as o u t l o o k and t h e p e t r o l e u m o u t l o o k as a r e s u l t o f th e d e v e lo p m e n ts w hich h av e ta k e n p la c e to d a te .

CHAPTER I THE MEABIHG 01* COHSERVATIOH

A p ro p e r u n d ersta n d in g o f c o n s e rv a tio n i s b e s t a rriv e d a t by a c o n s i d e r a t i o n o f p r o d u c t i o n . d u c t i o n a s i n th e f i e l d

I n th e f i e l d o f p r o ­

o f m e c h a n ic s one h u n d re d p e r c e n t

e f f ic ie n c y i s an id e a l r a t h e r th a n a p r a c t i c a l p o s s i b ility * A c e r t a i n amount o f w a s t e i s i n e v i t a b l e , b u t t h e f a c t o r s o f p r o d u c t i o n s h o u l d be so em ployed a s t o m in im iz e w aste* av o id an ce o f w a s te f u l p ro d u c tio n i s tio n .

The

th e k e y n o te o f c o n s e r v a ­

I n t h i s c o n n e c t i o n P r o f e s s o r E l y makes the f o l l o w i n g

sta te m e n t.

”By w a s t e f u l p r o d u c t i o n we mean p r o d u c t i o n w hich

y ie ld s a t o t a l re tu rn t o a l l th e f a c to r s o f p ro d u c tio n l e s s t h a n t h a t w hich seme o t h e r a v a i l a b l e em ployment o f t h e same f a c t o r s would y i e l d a t a p a r t i c u l a r tim e and p l a c e I n t h e d e v e lo p m e n t o f t h e o i l an d g a s r e s o u r c e s a c e r t a i n am ount o f o i l an d g a s w i l l i n e v i t a b l y be l o , s t , b u t c o n s e r v a ­ t i o n i s i n o r d e r when th e p r o d u c t i o n o f t h e s e r e s o u r c e s b e ­ comes w a s t e f u l i n th e s e n s e o f w a s t e f u l p r o d u c t i o n a s s e t f o r t h by P r o f e s s o r Ely* The e s s e n c e o f c o n s e r v a t i o n i s t h e u t i l i t a r i a n c o n c e p t o f t h e g r e a t e s t good to t h e g r e a t e s t num ber.

I t means a

s a c r i f i c e by t h e p r e s e n t g e n e r a t i o n f o r t h e b e n e f i t o f f u t u r e 1

R. T. E ly i n The F o u n d a tio n s o f n a t i o n a l P r o s p e r i t y , E l y , H e s s , L e i t h , and O a r v e r , £ 7 .

2 g e n e ra tio n s.

The c o n s e r v a t i o n of o i l a n d gas i s g e n e r a l l y

th o u g h t o f i n c o n n e c t i o n w i t h p r o d u c t i o n , h u t i n i t s b r o a d e r se n se i t in c lu d e s a w id e r f i e l d .

C o n s e r v a t i o n i m p l i e s th e

d e v e lo p m e n t o f econom ic a n d t e c h n i c a l p r o f i c i e n c y i n b r i n g ­ in g t h e s e n a t u r a l r e s o u r c e s t o

th e ir g re a te s t e ffe c tiv e use.

I t in v o lv e s th e e lim in a tio n o f ev ery m s t e f u l p ro ced u re b o th a t t h e f i e l d a n d i n th e c o n s e q u e n t u t i l i z a t i o n o f th e o i l and g a s , i n a w o rd ,

the o b t a i n i n g o f t h e maximum u t i l i t y

o f each

u n i t o f p e t r o l e u m an d g a s i n i t s a p p l i c a t i o n to ou r econom ic needs.

C o n s e r v a t i o n h a s i t s i n c e p t i o n i n th e a c t u a l f i e l d

of

p r o d u c t i o n , and i t i s h e r e t h a t th e g r e a t e s t a c t i v i t i e s have ta k e n p la c e .

Y et i t m u st n o t be l o s t s i g h t o f t h a t c o n s e r v a ­

t i o n a l s o r e q u i r e s t h e c o o p e r a t i o n o f th e consum er and th e p u b lic i n g en e ra l#

OHAPTEK XI THE OCOUHBEHOE OF OIL MB OAS

P e tr o le u m o r r o o k o i l ( L a t i n , p e t r a ; r o c k ; o le u m ; o i l ) i s a n in f la m m a b le m ix t u r e o f o i l y H y d ro c a rb o n s l o c a t e d b e ­ n e a th th e

s u r f a c e o f th e e a r t h .

s o i l , b u t in p ro d u c tio n i t i s to t h e s u r f a c e .

It

som etim es e x u d e s fro m t h e

g e n e r a l l y n e c e s s a r y t o pump i t

I n r e g a r d t o i t s c h e m ic a l c o m p o s iti o n ,

p e t r o l e u m i s a m ix t u r e o f v a r i o u s compounds o f c a r b o n and h y d ro g e n w i t h s m a ll am o u n ts o f s u l p h u r , oxygen a n d n i t r o g e n . As i t com es fro m th e e a r t h , more o r l e s s g a s i s d i s s o l v e d i n it,

s u c h g a s c o n s i s t i n g c h i e f l y o f m arsh ^ s , m e th a n e , e t h a n e ,

propane,

and b u t a n e .

The d i f f e r e n t p r o d u c t s o f t h i s c r u d e

o i l a r e s e p a ra te d by a p r o c e s s c a lle d f r a c t i o n a l d i s t i l l a t i o n w h ic h c o n s i s t s o f a p p l y i n g i n c r e a s i n g d e g r e e s o f h e a t , t h e l i g h t e r and more v o l a t i l e p r o d u c t s b e i n g d i s t i l l e d o f f f i r s t . Thus the g a s o l i n e f r a c t i o n s o r n a p h th a s a r e

f i r s t o b ta in e d ,

t h e n t h e b u r n in g o i l f r a c t i o n s o r k e r o s e n e s , t h e n t h e f h e l o i l s , l e a v i n g a r e s i d i u m w h ich i s f u r t h e r d i s i n t e g r a t e d i n t o w ax, l u b r i c a t i n g o i l , and a s p h a l t .

N a t u r a l gas o r ic-ck g a s

i s a n a e r i f o r m m i x t u r e fo u nd a t o r b e n e a t h th e

su rfa c e o f th e

e a r t h , g e n e r a l l y a s s o c i a t e d inith p e t r o l e u m . Two g ro u p s o f t h e o r i e s h av e been ad v an ced i n e x p l a i n i n g th e o r i g i n o r p e t r o l e u m , t h e i n o r g a n i c t h e o r i e s a n d th e o r g a n ­ ic

th e o ri es.

A t p r e s e n t t h e o r g a n i c t h e o r i e s a r e m ost w i d e l y

4 h e ld , e s p e c i a l l y by g e o l o g i s t s ; a s a r u l e , p e tro le u m e n g in ­ e e r s now b e l i e v e t h a t b o t h p e t r o l e u m an d n a t u r a l gas a r e

the

r e s u l t o f t h e d e c o m p o s i t i o n o f p l a n t and a n im a l re m a in s w h ic h have b e e n b u r i ed w i t h s e a s e d im e n ts jf s u c h s e d im e n t s now co n ­ s t i t u t i n g p a r t o f the l a n d a r e a . P e tro le u m o c c u rs i n s t r a t a b e n e a th th e s u r f a c e o f th e e a r t h , u s u a l l y i n a s s o c i a t i o n w ith n a t u r a l g a s a n d s a l t w a te r# Due to g r a v i t y t h e o i l i s g e n e r a l l y ab o v e t h e w a t e r a n d t h e g a s above t h e o i l #

As a r u l e p e t r o l e u m i s fo u n d a c c u m u la te d

in po ro u s lim e s to n e , or i n sands or s a n d s to n e s a s s o c ia te d w ith c l a y s o r s h a l e s , an d a l m o s t n e v e r i n a n y g r e a t q u a n t i t y i n i g ­ neou s r o c k s , m etam o rp ho sed r o c k s , o r i n f r e s h - w a t e r s e d i m e n t s n o t a s s o c i a t e d w i t h m a rin e s t r a t a .

P etro leu m b e a rin g s t r a t a

a r e u s u a l l y f o l d e d , i n some p l a c e s g e n t l y , i n o t h e r p l a c e s s h a r p ly #

I n a l l c a s e s p e t r o l e u m o c c u r s i n p o r o u s r o c k so

s e a l e d as t o

fbzm a r e s e r v o i r p e r m i t t i n g t h e a c c u m u l a t i o n o f

th e o i l a n d g a s .

The p r e s e n c e o f o i l i s som etim es m a n i f e s t e d

by s u r f a c e i n d i c a t i o n s ,

but o f te n t h i s i s not th e case#

T h ere a r e two modes o f o c c u r r e n c e o f n a t u r a l g as#

it

may be o b t a i n e d f ro m th e e a r t h as a s e p a r a t e p r o d u c t , u n a s s o c ­ i a t e d w ith p e tro le u m d e p o s its . gas#

In t h i s case i t is c a lle d d ry

S econ d, i t may be o b t a i n e d from p e t r o l e u m b e a r i n g s a n d s ,

b e i n g p ro d u c e d w i t h th e p e t r o l e u m and s e p a r a t e d fro m i t th e s u r f a c e o r c a s i n g h ea d o f th e w e ll# h e a d or w et g a s . f i r s t u tiliz e d ,

at

T h is i s c a l l e d o a s i n g

In C a l i f o r n i a t h e d r y g a s d e p o s i t s w ere b ut a t th e p r e s e n t tim e t h e y c o n s t i t u t e a n i n -

5 s i g n i f i c a n t p a r t o f th e g a s s u p p l y .

The e x t e n s i v e d e v e l o p ­

ment o f th e o i l s a n d s o f the estate hav e r e s u l t e d i n a l a r g e p r o d u c t i o n of e a s i n g head g a s , f o r t h i s i s a n e c e s s a r y "by­ p ro d u c t i n p e tro le u m p ro d u c tio n * N a t u r a l g a s h a s a n i m p o r t a n t f u n c t i o n i n the p r o d u c t i o n o f p e t r o l e u m , f o r i t i s t h e l i f t i n g pow er w h ic h f o r c e s t h e o i l to th e

su rface.

When th e g a s p r e s s u r e h a s been d i s s i p a t e d

i t becomes n e c e s s a r y to

r e s o r t to pum ping.

N a tu ra l g as th u s

h a s an i m p o r ta n t v a l u e i n p r o d u c t i o n i n a d d i t i o n t o i t s v a l u e a s a h e a t a g e n t and a s an i l l u m i n a n t . B ecause o f t h e i r m o b i l i t y , p e t r o l e u m and n a t u r a l gas h av e a te n d e n c y t o m i g r a t e t h r o u g h p o r o u s r o c k .

The i n c r e a s e

o r d e c r e a s e o f s u r f a c e p r e s s u r e may have d e c i d e d e f f e c t s u p o n th e l o c a t i o n o f t h e o i l and g a s .

Such c h a n g e s i n l o c a t i o n

a r e o f p a r t i c u l a r s i g n i f i c a n c e i n t h e a c t u a l d e v e lo p m e n t o f o i l b e a rin g s t r a t a .

The f i r s t d r i l l t o s t r i k e a n o i l zone

d e c r e a s e s t h e amount o f p r e s s u r e w h ic h i s e x e r t e d a g a i n s t t h a t p a r t o f th e s t r u c t u r e w h ic h i s to u c h e d b y th e d r i l l .

The r e ­

l e a s e o f some p r e s s u r e r e s u l t s i n t h e m i g r a t i o n o f o i l and g a s i n t h e d i r e c t i o n o f th e d e c r e a s e d p r e s s u r e z o n e .

One o i l

w e ll can t h e r e f o r e d e p le te a s t r u c t u r e o f i t s o i l and g a s . When o i l i s f i r s t d i s c o v e r e d i n a r e g i o n a l a r g e number o f p ro sp e c tin g p e rm its a re u s u a lly g ra n te d .

I n many e a s e s t h i s

h a s r e s u l t e d i n t h e d i v i s i o n o f th e a r e a i n t o a l a r g e number o f s m a l l l o t s , o f t e n h e l d b y an e q u a l l y l a r g e number o f i n ­ d iv id u a ls.

R e a liz in g th e g r e a t m o b ility of o i l and g a s , each

6 i n d i v i d u a l s e e k s t o o b t a i n a s much, o i l a s p o s s i b l e b e f o r e ad ja c e n t w e lls d ra in

1foe o i l .from t h e common zone*

The i n ­

d i v i d u a l can o n l y be s u r e o f h i s p r o d u c t whan he b r i n g s i t to th e su rface*

(This e x p l a i n s th e o f t e n f r e n z i e d a c t i v i t y i n

p ro d u c tio n w ith th e consequent o v e rp ro d n o tio n and lo s s *

CHAPTEH I I I THE RESOURCES M B PRODUCTION OF CARIEO ENIA

The c o m m e r c ia lly p r o d u c t i v e o i l f i e l d s o f C a l i f o r n i a a re lo c a te d i n th e so u th e rn h a l f of th e .s ta te .

T h e re a r e two

g e n e ra l d i s t r i c t s i n t h i s s o u th e rn p o r t i o n of C a l i f o r n i a w h e re t h e p r i n c i p a l f i e l d s a r e l o c a t e d .

One o f t h e s e i s t h e

s o u t h e r n r i m o f t h e San J o a q u i n V a l l e y , c o m p r i s i n g a s e r i e s o f f i e l d s e x t e n d i n g f o r an i n t e r r u p t e d d i s t a n c e o f o v e r one h u n d re d m i l e s .

The V a l l e y f i e l d s i n c l u d e C o a l i n g a , i#ost H i l l s ,

M c K i t t r i c k , M id w a y -S u n se t, K ern R i v e r , K e ttle m a n H i l l s , and o th e rs.

F a r t h e r s o u t h i n t h e Dos A n g e le s B a s in an d a l o n g t h e

c o a s t , on th e w e s t e r n .f la n k o f t h e C o a s t R a n g e s, i s l o c a t e d a n o th e r s e r i e s o f f i e l d s .

T h is d i s t r i c t i n c l u d e s S e a l B each,

H u n t i n g t o n B each , S a n t a Fe S p r i n g s , S i g n a l H i l l , D om inguez, an d o t h e r s .

Most o f t h e C a l i f o r n i a

f i e l d s p r o d u c e b o th gas

an d o i l , a l t h o u g h t h e r e a r e some f i e l d s # i i c h p r o d u c e o n ly gas.

At th e p r e s e n t tim e B u tto n w illo w f i e l d i s

the o n ly im­

p o r t a n t f i e l d i n t h e s t a t e w h ic h p r o d u c e s o n ly g a s . 3’

in re~

g a r d to th e o c c u r r e n c e o f p ie tro leu m i n C a l i f o r n i a , i t

is s ig ­

n i f i c a n t t o n o t e t h a t th e p e t r o l e u m o c c u r s a t one p l a c e o r a n o t h e r i n p r a c t i c a l l y e v e ry form o f g e o l o g i c s t r u c t u r e . T h is i s d u e to t h e f a c t t h a t th e C o a s t R anges a f f o r d some e x 1

Map i n t h e A p p e n d ix , p . 97 , more c l e a r l y i n d i c a t e s t h e o i l and g as p ro d u c in g r e g i o n s .

8 t r e m e l y in v o l v e d f o l d s and f a u l t s ,

c o m p lic a te d by i g n e o u s i n ­

tru sio n s. Com petent g e o l o g i s t s have f r e q u e n t l y s t a t e d i n th e p a s t few y e a r s t h a t t h e p r o d u c i n g a r e a o f C a l i f o r n i a i s now w e l l d e fin e d and th a t th e re i s l i t t l e

p ro b a b ility of fu rth e r o il

b e a rin g san d s b e in g d isc o v ered #

How ever, t h e d e v e lo p m e n t o f

t h e p a s t few y e a r s h a s c l e a r l y i n d i c a t e d t h a t a l l o f t h e p o o l s h av e n o t y e t b e e n to u c h e d by t h e d r i l l .

A n o t a b l e exam ple i s

th e r e c e n t d e v e lo p m e n t o f t h e K e ttle m a n H i l l s f i e l d , w h i l e a s t i l l more r e c e n t exam ple i s th e d i s c o v e r y o f a d d i t i o n a l p o o l s n e a r V e n ic e b y t h e Ohio O il Company.

Thus t h e l i m i t s o f t h e

C a l i f o r n i a p r o d u c i n g a r e a have n o t y e t b e e n d e f i n i t e l y d e f i n e d . F u rth e rm o re , t h e r e i s sid e re d .

th e r e s u l t o f d e e p e r d r i l l i n g t o be con ­

T h ere i s l i t t l e d o u b t t h a t , w i t h th e im provem ent i n

d r i l l i n g t e c h n i q u e w h ic h h a s t a k e n p l a c e i n t h e l a s t few y e a r s , o i l s a n d s h e r e t o f o r e u n d e v e lo p e d w i l l become c o m m e r c ia lly p ro d u c tiv e .

K e ttle m a n H i l l s may a g a i n be c i t e d , f o r o i l z o n e s

t h e r e a r e b e i n g d e v e lo p e d w hich f i v e y e a r s

ego c o u l d n o t

h ave b e e n t o u c h e d w i t h t h e d r i l l i n g m e th o d s t h e n i n use#

C a l­

i f o r n i a has not y e t reach ed a d e c lin e in p ro d u c tio n . I t i s im p o ssib le

to make a d e f i n i t e s t a t e m e n t r e g a r d i n g

th e p e t r o l e u m r e s o u r c e s o f C a l i f o r n i a .

B e ca u se o f th e n a t u r e

o f p e t r o l e u m an d i t s method o f o c c u r r e n c e , t h e e x t e n t o f o i l b e a rin g sa n d s can n o t be a c c u r a t e l y m easured.

H ow ever, a num­

b e r o f s t u d i e s have b e e n made i n a t t e m p t i n g t o a r r i v e a t some c o n c e p t i o n o f t h e s i z e o f th e r e s e r v e o f t h e U n i t e d

9 S ta te s.

Day i n 1 9 0 8 , A rn o ld i n 1 9 1 4 , a n d D a v id W hite i n 1920,

a l l a s s o c i a t e d w i t h t h e U n ite d S t a t e s G e o l o g i c a l S u rv e y , made e x h a u s t i v e s u r v e y s o f th e p e t r o le u m r e s o u r c e s o f the U n ite d S ta te s.

O th e r s t u d i e s w e r e made i n 1921 by t h e A m eric an

A s s o c i a t i o n o f P e t r o l e u m G e o l o g i s t s , i n 1925 by th e A m erican P e t r o l e u m I n s t i t u t e , and i n 1926 by t h e F e d e r a l O i l C o n s e rv a ­ t i o n B o ard .

I t i s u n n e c e s s a r y to go i n t o

d e ta il in c o n sid e r­

in g th e e s t i m a t e s w h ic h have b ee n a r r i v e d a t b y t h e s e s t u d i e s , f o r t h e e a r l i e r e s t i m a t e s c a n no l o n g e r b e h e l d , an d e v e n th e l a t e r e s t i m a t e s a r e a c c e p t e d w i t h so many r e s e r v a t i o n s b y p e t r o l e u m e n g i n e e r s a n d g e o l o g i s t s t h a t th e y c a n n o t b e a c c e p t e d w it h o u t q u e s t i o n .

S um m arizing , how ever * i t i s fo u n d

t h a t t a k e n t o g e t h e r t h e e s t i m a t e s p l a c e th e r e s e r v e a t some­ w h e re b e tw e e n f o u r and n in e b i l l i o n b a r r e l s f o r th e e n t i r e U n ite d S t a t e s .

The p e t r o l e u m r e s e r v e o f C a l i f o r n i a i n O cto­

b e r , 1928 w as e s t i m a t e d a t 2 , 0 0 0 ,0 0 0 ,0 0 0 b a r r e l s . 1 p r e s e n t r a t e o f p r o d u c t i o n and w i t h p r e s e n t m e th o d s ,

At th e th e e s ­

t i m a t e s w h ich h av e b e e n made w ould i n d i c a t e t h e e x h a u s t i o n o f th e r e s e r v e o f t h e U n ite d S t a t e s i n from f i r e

to t e n y e a r s .

Due t o th e f a c t t h a t su c h e s t i m a t e s a r e f r e q u e n t l y i n ­ t e r p r e t e d a s i n d i c a t i n g an im m inent e x h a u s t i o n o f th e p e t r o l s eum r e s o u r c e s o f t h e c o u n t z y , i t i s i n o r d e r to c o n s i d e r b r i e f l y th e v a l i d i t y o f t h e s e e s t i m a t e s . 1

I n th e f i r s t p l a c e ,

C a r l H. B e a l and A. H. H e l l e r , The K e ttle m a n H i l l s O il F i e l d : a R eview o f t h e H i s t c z y , G eo lo g y , D ev elo p m en t, an d P o s s i b i l i t i e s o f t h i s G ig a n t ic A d d i t i o n t o C a l i f o r n i a O il F i e l & s T T f 1 '

10 th e number o f d i f f i c u l t i e s in v o l v e d i n d e t e r m i n i n g t h e r e ­ s e r v e makes a n y f i n e d e g r e e o f a c c u r a c y i m p o s s i b l e . o g i s t s who h av e made t h e m it t h i s f a c t .

The g e o l ­

e s t i m a t e s h a v e b e e n th e f i r s t t o ad*

C o n s e q u e n t ly a l l o f the e s t i m a t e s h av e b e e n .

ex tre m e ly c o n s e r v a tiv e .

I n t h e se c o n d p l a c e , t h e e s t i m a t e s

h av e b e e n b a s e d upon t h e t h e n p r e s e n t r a t e o f p r o d u c t i o n and u n d e r t h e e x i s t e n t m e th o d s . te m p o ra rily te n d to

On t h e w h o le , t h e s e two f a c t o r s

o f f s e t one a n o t h e r , f o r im provem ent i n

m e th o d s may keep p a c e w ith t h e g r o w in g demand f o r p e t r o l e u m and g a s .

The d e c r e a s e i n t h e s i z e o f th e r e s e r v e w i l l r e s u l t

i n a d e c l i n e o f o u t p u t , and t h i s w i l l e x t e n d p r o d u c t i o n o v e r a l o n g e r p e r i o d of y e a r s .

Thus t h e t o t a l e x h a u s t i o n o f t h e

p e t r o l e u m r e s o u r c e s w i t h i n a d e f i n i t e p e r i o d o f tim e c a n n o t be p r e d i c t e d .

In th e t h i r d p la c e , a s d ec re ase d p ro d u c tio n

r e s u l t s i n h i g h e r p r i c e o i l w h ich i s n o t now e c o n o m ic a ll y r e ­ c o v e r a b l e w i l l become e c o n o m ic a ll y r e c o v e r a b l e a s a r e s u l t o f th e h i g h e r p r i c e .

JP ourth, t h e d i s c o v e r y o f new f i e l d s and

tb e r e s u l t s o f d e e p e r d r i l l i n g w i l l f u r t h e r augm ent t h e e x ­ t e n t o f th e p r e s e n t p e tro le u m r e s o u r c e s ,

A 7000 f o o t w e l l ,

f o r m e r l y c o n s i d e r e d a n i m p o s s i b i l i t y , i s now a commonplace, «

w h ile a 1 0 ,0 0 0 f o o t w e l l i s n o t to o much t o e x p e c t .

O scar

H o w a rd 's H athaw ay 7 W e ll i n t h e S a n ta Fe S p r i n g s f i e l d r e a c h e d a d e p t h o f 9375 f e e t i n D ecem ber, 1 9 2 9 ,^ I t i s t h e r e f o r e s a f e to assum e a g r e a t e r r e s e r v e t h a n th e 1

e s t i m a t e s w ould i n d i c a t e .

N e v e r t h e l e s s , th e f a c t r e m a in s

"D ep th R e c o r d " , The O il W e ek ly , December 2 7, 1 9 2 9 , V o l. 5 6 , No. 2, p . 3 0 .

11 th a t o il is

an i r r e p l a c e a b l e n a t u r a l r e s o u r c e *

The f i n d i n g s

o f t h e g e o l o g i s t m ig h t b e r e p u d i a t e d e n t i r e l y , b u t t h e n pro*" d i c t i o n f i g u r e s m ust toe c o n s i d e r e d an d t h e s e l i k e w i s e i n d i ­ c a t e e x h a u s t i o n o f t h e r e s e r v e u n d e r co nt in u o u s e x t r a c t i o n * The o l d e r f i e l d s h av e a l r e a d y r e a c h e d t h e i r p e a k o f p r o d u c t i o n and a r e now on th e d e c l i n e , w h ile i n th e n ew er f i e l d s t h e o l d e r p o o l s have b e e n fo u n d t o r e a c h a p e a k o f p r o d u c t i o n an d t h e n d e c l i n e i n o u tp u t*

The e s t i m a t e s a r e t h e r e f o r e b e s t i n ­

t e r p r e t e d a s i n d i c a t i n g th e n e c e s s i t y f o r c o n s e r v a t i o n , b u t n o t t h e im m inent e x h a u s t i o n o f th e o i l b e a r i n g san d s* A lth o u g h i t i s i m p o s s i b l e t o s t a t e t h e e x t e n t o f th e p e t r o l e u m r e s o u r c e s o f C a l i f o r n i a w i t h an y d e g r e e o f a c c u r a c y , a s t a t e m e n t o f p r o d u c t i o n f i g u r e s p r e s e n t s no su ch d i f f i c u l t y . I n C a l i f o r n i a th e p e t r o l e u m i n d u s t r y grew o u t o f t h e a s p h a l t m in in g i n d u s t r y .

The f i r s t p r o d u c t i v e o i l w e l l s i n th e s t a t e

w e re d r i l l e d i n t h e O jai V a l l e y i n 1 8 6 7 .1 A lth o u g h t h e o 1 0 0 ,0 0 0 b a r r e l m ark was p a s s e d i n 1881 , p r o d u c t i o n was n o t g r e a t u n t i l 1895 a f t e r th e d i s c overy o f th e Los A n g e le s and CZ

Summerland f i e l d s .

I n t h a t y e a r a t o t a l o f 1 , 3 0 9 ,0 0 0 b a r r e l s

was p r o d u c e d i n t h e i s t a te and C a l i f o r n i a became a w o r l d f a c t o r in th e p ro d u c tio n of p e tro le u m .

The 1 0 0 ,0 0 0 ,0 0 0 b a r r e l mark

was p a s s e d i n 1 9 1 9 , t h e 3 0 0 ,0 0 0 ,0 0 0 b a r r e l mark i n 1 9 3 3 , and i n 1938 t h e t o t a l o u t p u t f o r th e s t a t e was 3 3 1 ,9 8 3 ,0 0 0 b a r r e l s ^ o r 3 5 .7 6 $ o f the t o t a l o u t p u t o f th e U n ite d s t a t e s . ® 1 3 3 4 5

I n 1903

V a l e n t i n B. G a r f i a s , B e t r o l e u n R e s o u r c e s o f th e W o rld , 3 1 . P e t r o l e u m F a c t s and F i g u r e s (Second E d i t i o n ) , 1 1 3 . Ib id ., l i 3 . T b ld ., 113. T b T d ., 4 1 .

12 th e s t a t e o f C a l i f o r n i a assum ed f i r s t p l a c e i n t h e p r o d u c t i o n o f p e t r o l e u m i n t h e U n ite d S t a t e s a n d r e t a i n e d t h a t p o s i t i o n u n t i l 1 9 1 5 , w i t h t h e e x c e p t i o n o f t h e y e a r 1908 when Oklahoma was f i r s t .

S in c e 1915 C a l i f o r n i a h a s s t o o d e i t h e r f i r s t ,

seco n d , o r t h i r d a s a p ro d u c e r o f p etro le u m i n th e u n ite d S ta te s .^ " I n r e g a r d t o th e p r o d u c t i o n o f n a t u r a l g a s , a d e q u a t e s t a t i s t i c s a r e n o t a v a i l a b l e t o show t h e c o m p le te p r o d u c t i o n to d a t e .

U a t u r a l g a s h a s b een l a r g e l y a b y - p r o d u c t i n t h e

p ro d u c tio n of p e tro le u m . i n t o th e a i r ,

C o n s e q u e n t ly much h a s b e e n b lo w n

and th e f i l l v a lu e o f t h i s n a t u r a l r e s o u r c e

h as n o t a lw a y s been a p p r e c ia t e d .

Only a p a r t o f t h e t o t a l

am ount p r o d u c e d h a s b e e n u t i l i z e d . The f i r s t

co m m ercial p r o d u c t i o n o f n a t u r a l g a s i n C a l ­

i f o r n i a to o k p l a c e i n 1901 i n t h e o l d S a l t L ake f i e l d w h ic h i s l o c a t e d j u s t w e s t o f Los A n g e l e s .

Some o f t h e g a s was

u t i l i z e d a s a f i e l d f u e l , b u t t h e s u r p l u s w as d i s t r i b u t e d t o t h e g a s c o n su m e rs o f Los A n g e l e s .

The maximum g a s p r o d u c t i o n

o f t h e S a l t L ake f i e l d was r e a c h e d i n 1 9 0 8 .

A lth o u g h d r i l l ­

in g o p e r a t i o n s w ere s t a r t e d i n t h e Midway f i e l d i n t h e San J o a q u in T a l l e y i n 1 9 0 0, i t w as n o t u n t i l 1908 t h a t c o m m e rc ia l p r o d u c t i o n o f n a t u r a l g a s to o k p l a c e i n t h i s f i e l d .

A bout

t h e same tim e e x t e n s i v e d r y g a s a r e a s w e re d e v e lo p e d a t Buena V i s t a H i l l s a n d E l k H i l l s f i e l d s a d j a c e n t t o t h e Midway fie ld area. 1

I n t h e s e f i e l d s t h e g a s was u t i l i z e d f o r f i e l d

E or f u r t h e r s t a t i s t i c s on C a l i f o r n i a p e t r o l e u m p r o d u c t i o n s e e A p p e n d ix , p p . 9 8 , 9 9 , 1 0 0 , 1 0 3 .

13 u s e an d t h e s u r p l u s was p i p e d to B a k e r s f i e l d f o r g e n e r a l c o n ­ su m ption *

I t i s e s tim a te d t h a t sin c e t h e i r d isc o v e ry th e s e

d r y g a s a r e a s h av e y i e l d e d i n e x c e s s o f 9 0 ,0 0 0 ,0 0 0 M. 0 , F . , an d t h a t t h e y s t i l l c o n t a i n e v e r 9 0 0 ,0 0 0 ,0 0 0 M. 0 .

The

p r o d u c t i o n and u t i l i z a t i o n o f n a t u r a l g a s i n C a l i f o r n i a d e ­ v elo p ed r a p i d l y .

I n 1922 t h r e e p r o l i f i c

f i e l d s came i n ,

S i g n a l H i l l , S a n ta Fe S p r i n g s , an d H u n tin g to n B each f i e l d s . T h is r e s u l t e d i n a tre m e n d o u s i n c r e a s e i n th e p r o d u c t i o n o f n a t u r a l g a s and a c o r r e s p o n d i n g i n c r e a s e i n t h e ^ s u rp lu s . From t h e v e r y b e g i n n i n g t h e p r o d u c t i o n and u t i l i z a t i o n o f n a t u r a l g as h a s i n c r e a s e d r a p i d l y *

At p r e s e n t th e re are

o v e r 1000 m i l e s o f t r a n s m i s s i o n l i n e s c o n v e y in g g a s fro m t h e f i e l d s t o c e n t e r s o f c o n s u m p tio n .

A 20 i n c h p i p e l i n e from

K e ttle m a n H i l l s f i e l d to t h e San F r a n c i s c o Bay r e g i o n v i a t h e Banoche P a s s , a d i s t a n c e o f 220 m i l e s , was c o m p le te d i n A u g u s t, 1929 b y t h e P a c i f i c Gas and E l e c t r i c Company.

T h is m arked

th e f i r s t u se o f g a s fro m t h e T a l l e y f i e l d s i n San F r a n c i s c o . The tr e m e n d o u s i n c r e a s e i n th e p r o d u c t i o n an d u t i l i z a t i o n o f n a t u r a l g a s h a s a l s o r e s u l t e d i n a c h a n g e i n th e k i n d o f g a s used.

O r i g i n a l l y d r y g as s a t i s f i e d

th e dem and, b u t a t p r e s e n t

m o st o f t h e g a s Tafoicth i s u t i l i z e d i s c a s i n g h ead g a s . i s due to

T h is

the l i m i t e d number o f d r y g as f l a L d s and th e t r e ­

mendous s u r p l u s

from th e w e t g a s f i e l d s .

I n s tu d y in g th e n a t u r a l g a s p r o d u c tio n o f C a l i f o r n i a s e v e r a l f a c t s m ust b e k e p t i n m ind. 1

In th e p ro d u c tio n o f

C. C. Brown, H a t u r a l Gas i n C a l i f o r n i a ( M a n u s c r i p t ) , 1 .

14 p e tro le u m p r a c t i c a l l y

th e e n t i r e p r o d u c t i s u t i l i z e d i n some

way and th e a c t u a l p h y s i c a l w a s te i s s m a l l . t r u e i n th e p ro d u c tio n o f n a tu r a l g a s .

T h is i s n o t

As g a s i s n e c e s s a r i l y

p r o d u c e d i n t h e p r o d u c t i o n o f o i l , g a s p r o d u c t i o n and g a s u t i l i z a t i o n a r e s e ld o m e q u a l .

As t h e o u t p u t o f p e t r o l e u m

has in c re a s e d a c o rre sp o n d in g in c r e a s e i n n a t u r a l gas has b e e n i n e v i t a b l e , b u t a c o r r e s p o n d i n g u t i l i z a t i o n o f g a s h as n o t ta& en p l a c e . o f n a tu r a l gas.

C o n s e q u e n tly t h e r e h a s b e e n a g r e a t w a s t e Mr. C laud e C. Brown, Gas A d m i n i s t r a t o r o f

t h e S t a t e R a i l r o a d Com m ission, h a s made th e m o st e x h a u s t i v e s t u d y o f t he p r o d u c t i o n and u t i l i z a t i o n o f n a t u r a l gas i n C a lifo rn ia .

A c c o rd in g t o h i s s t u d y , t h e t o t a l f i e l d p r o ­

d u c t i o n o f n a t u r a l g as i n C a l i f o r n i a fro m 1920 to 1928 i n ­ c l u s i v e w as 1 , 9 6 0 , 3 0 8 , 8 5 4 M. C. F .

Of t h i s am ount t h e t o t a l

u t i l i z a t i o n was 1 , 2 7 1 , 6 0 3 , 1 3 0 M. C. F . , w i t h a t o t a l w a s ta g e o f 6 8 8 ,7 0 5 ,7 2 4 M. C. F .

Thus 65$ o f t h e t o t a l gas p r o d u c e d

h a s b e e n u t i l i z e d w h i l e 35$ h a s b e e n w a s t e d .^ One i l l u s t r a t i o n i s s u f f i c i e n t t o i n d i c a t e

the l o s s

w h ic h h as r e s u l t e d fro m s u c h a tre m e n d o u s w a s t e o f n a t u r a l gas.

I n S e p te m b e r , 1929 Mr. Brown s t a t e d t h a t fro m J a n u a r y

1 , 1929 t o J u l y 31 , 1929 a t o t a l o f 5 6 ,2 0 8 ,0 0 0 ,0 0 0 c u b ic f e e t o f g a s h ad b e e n p r o d u c e d i n t h e S a n ta Fe S p r i n g s f i e l d , o f w h ic h am ount 4 4 ,4 1 7 ,0 0 0 , 0 0 0 c u b i c f e e t h a d b e e n p e r m i t t e d to escape in to

th e a i r .

I f s o l d a s low a s f i v e c e n t s p e r

1000 c u b i c f e e t th e p r o d u c e r s c o u l d h av e r e a l i z e d n e a r l y 1

C. C. Brown, N a t u r a l Gas i n C a l i f o r n i a ( M a n u s c r i p t ) , 7 .

X5 $ 3 f 0 0 0 ,0 0 0 on t h e g a s w h ic h w as w a s t e d . ^

He went on to s t a t e

t h a t " a t t h e p r e s e n t; :ia te o f d i s c h a r g e , t h e Sanfca Fe S p r i n g s O il F i e l d w i l l he d e p l e t e d o f n a t u r a l g^ts w i t h i n t h r e e y < ears."

p

A c c o rd in g t o d a t a r e c e n t l y p u b l i s h e d by Mr. Brown a t o t a l o f 558 b i l l i o n c u b i c f e e t o f n a t u r a l g a s was p r o d u c e d i n C a l i f o r n i a d u r i n g 1 9 2 9 , o f which amount 309 b i l l i o n c u b i c f e e t w e re u t i l i z e d l e a v i n g a t o t a l w a s t a g e o f 249 b i l l i o n cu b ic f e e t . 3

The d i s s i p a t i o n o f n a t u r a l g a s h a s t h u s c o n t i n u e d

to 1 9 3 0 .4

1 2 3 4

P e o p le o f t h e S t a t e o f C a l i f o r n i a v s A s s o c i a t e d O jl Company, e t a l • , Ho. 2 8 7 , 4 6 0 , A f f i d a v i t o f C lau d e C. Brown, 3 . I b id . , 4. 1TCas U t i l i z a t i o n " , The O il W eek ly , F e b r u a r y 7, 1 9 30 , V o l. - 56, Ho. 8 , p . 3 2 . For f u r t h e r s t a t i s t i c s re g a rd in g n a tu r a l gas in C a lif o rn ia s e e A p p e n d ix , p . 1 0 1 .

CHAPTER IV THE HISTORY OF CONSERVATION IN CALIFORNIA

The o i l a n d gp.s c o n s e r v a t i o n movement i n C a l i f o r n i a i s a re c e n t d e v e lo p m e n t.

No e x a c t d a t e c a n be s e t a s m a rk in g t h e

b e g i n n i n g o f t h e movement , b a t i n a g e n e r a l way i t

can be s a i d

t h a t p r e v i o u s t o 19£1 few e f f e c t i v e a t t e m p t s h ad b e e n made t o c o n s e r v e e i t h e r n a t u r a l gas o r p e t r o l e u m .

I t is tru e th a t in

C a l i f o r n i a , a s i n o t h e r p a r t s o f -the c o u n t r y , a t t e n t i o n a t tim e s had been c a l l e d to

the w a ste o f g as a n d o i l , w h i l e t h e

C a l i f o r n i a S t a t e L e g i s l a t u r e had e v e n p a s s e d two la w s d i r e c t e d a t gas c o n se rv a tio n #

How ever, t h i s w as m e r e ly a m a n i f e s t a ­

t i o n o f a n a t t i t u d e ; no p r o g r e s s h ad y e t b e e n made#

On t h e

o t h e r h a n d , p r o d u c t i o n m etho ds had b e e n im proved w i t h th e d e ­ v e lo p m e n t o f the i n d u s t r y , v a tio n #

and t h i s d i d l e a d to

some c o n s e r ­

A f t e r 19£1 p r o g r e s s w as s lo w , but th e way was b e i n g

p r e p a r e d f o r t h e d e v e lo p m e n ts w h ich h av e r e c e n t l y t a k e n p la c e # I t i s t h e r e f o r e i n o r d e r t o c o n s i d e r t h e s e e a r l y e v e n t s w h ich l e d to w a r d t h e a c t u a l c o n s e r v a t i o n o f p e t r o l e u m and n a t u r a l gas. U n t i l 19£1 t h e r e w as no g r e a t n e c e s s i t y f or a c o n s e r ­ v a t i o n movement i n t h e s t a t e #

The m a rk e t r e a d i l y a b s o r b e d

th e e n t i r e p e t r o l e u m p r o d u c t i o n o f C a l i f o r n i a , w h i l e t h e m ar­ k e t f o r n a t u r a l g a s w as so l i m i t e d t h a t i t d id n o t a t t h a t tim e a p p e a r t o b e a g r e a t econom ic w a s t e t o p e r m i t t h e g a s

17 to e s c a p e in to

th e a i r *

Thus i n 1904 i t was t h e o p i n i o n o f

th e S t a t e M in in g B u rea u t h a t " t h e p r e s e n t p r o d u c t i o n o f p e t r o l e u m i n t h i s S t a t e i s p u r e l y and s im p ly a m a t t e r o f p o s s ­ i b l e c o n s u m p tio n . ”"*■ C o n s e q u e n tly b o t h r e s o u r c e s w e re o f t e n c a r e l e s s l y e x p l o i t e d a n d u t i l i z e d , w i t h a n a c t u a l amount o f p h y s i c a l w a ste w hich to d a y would b e c o n s i d e r e d a p p a l l i n g . T h is i s w e l l i l l u s t r a t e d b y th e g e n e r a l p r a c t i c e d u r i n g th e e a r ly y e a rs o f th e tw e n tie th c e n tu ry o f o ilin g ro a d s, s t r e e t s , and r a i l r o a d r o a d b e d s .

C rude o i l was s p r i n k l e d o r s p r a y e d

on th e s t r e e t s , p e r m i t t e d t o e v a p o r a t e i n o r d e r t o form a c o v e rin g , and o th e r l a y e r s of o i l th e n a p p l i e d .

T h is was c o n ­

s i d e r e d t h e s o l u t i o n f o r th e r o a d p r o b le m , f o r t h e o i l s e t t l e d t h e d u s t i n summer and s o l v e d t h e mud p r o b le m o f t h e w in te r.

Thus L ew is E . A u b u ry , C a l i f o r n i a S t a t e M i n e r a l o g i s t ,

i n h i s r e p o r t to t h e G o v ern o r i n 1904 s t a t e d t h a t " t h e e x ­ p e n s e o f p u t t i n g an d k e e p in g th e h ig h w ay s i n o r d e r o v e r lo n g s t r e t c h e s o f u n s e t t l e d la n d i s , o r r a t h e r lia s b e e n , p r o h i b ­ itiv e .

The o i l e d r o a d seems t o o f f e r t h e m ost f e a s i b l e s o l Z u tio n o f th e d i f f i c u l t y . " T h is p r a c t i c e g e n e r a l l y p r e v a i l e d i n r e g i o n s w h ere o i l was a v a i l a b l e , w h ile i n some s e c t i o n s o f t h e s t a t e , f o r e x a m p le , i n t h e c i t y o f S a n ta B a r b a r a , b o o k l e t s w ere p u b l i s h e d e x p l a i n i n g t h e p r o p e r m e th o d s o f o i l ­ i n g r o a d s and s t r e e t s . The W orld War was i n s t r u m e n t a l i n c a l l i n g t o g e n e r a l 1

C a l i f o r n i a S t a t e M in ing B u re a u , B u l l e t i n No. 32 , P r o d u c t i o n and Use o f P e t r o l e u m i n C a l i f o r n i a , 1 1 .

2

T b ia ., 163.

18 a t t e n t i o n t h e w a s t e f u l h a b i t s a n d p r a c t i c e s o f t h e A m eric an p e o p l e and t h e r e b y s t i m u l a t i n g t h e g e n e r a l c o n s e r v a t i o n move­ m e n t.

O il was one o f t h e i m p o r t a n t f a c t o r s i n t h e w o r ld

s t r u g g l e , f o r i t w as an i n d i s p e n s a b l e f u e l f o r t h e l a r g e num­ b e r o f a i r p l a n e s , m o to r t r u c k s ,

d iip s,

and o t h e r p e t r o l e u m

consum ing a g e n c i e s w h ic h w e re em ployed on a l a r g e s c a l e .

The

U n ite d S t a t e s e n t e r e d t h e w a r a t a tim e when th e A l l i e s w ere i n g r e a t n ee d o f o i l .

C o n s e q u e n tly t h e N a t i o n a l P e t r o l e u m

War S e r v i c e Com m ittee was o r g a n i z e d i n o r d e r t o m o b i l i z e t h e p e t r o l e u m p r o d u c t i o n o f t h e U n ite d S t a t e s t o i t s m ost e f f e c ­ t i v e u s e i n f u r n i s h i n g o i l f o r t h e A l l i e d l e n d a n d w a te r fo rces. T h is g e n e r a l a t t i t u d e was r e f l e c t e d i n C a l i f o r n i a b y t h e e f f o r t s o f t h e P e tr o le u m Com m ittee o f th e C a l i f o r n i a S t a t e C o u n c il o f D e f e n s e .

A s t u d y made b y t h i s o r g a n i z a t i o n

i n 1917 s e t s f o r t h some o f t h e w a s t e s w hich w e re t h e n t a k i n g p la c e .

I t was s t a t e d t h a t " a p p r o x i m a t e l y 40 p e r c e n t o f C a l ­

i f o r n i a p e t r o l e u m i s now u s e d a s f u e l u n d e r b o i l e r s w i t h o u t h a v in g b e e n r e f i n e d . ”3* I t was f u r t h e r p o i n t e d o u t t h a t a p p r o x ­ i m a t e l y 8 ,5 0 0 b a r r e l s o f m a r k e t a b l e o i l w ere b e i n g u s e d d a i l y i n C a l i f o r n i a o i l f i e l d s f o r pum ping an d f o r o t h e r f i e l d u s e s when some o t h e r f u e l m ig h t b e t t e r h av e b een u s e d . ' The f o l l o w ­ in g s t a t e m e n t i n d i c a t e s th e c o n s e r v a t i o n w h ic h had b e e n accom ­ p l i s h e d by t h a t tim e by t h e s u b s t i t u t i o n o f o t h e r forms o f e n g in e s ; 1

C a l i f o r n i a S t a t e C o u n c il o f D e f e n s e , R e p o r t o f t h e C om m ittee on P e t r o l e u m , 1 4 9 .

19 E l e c t r i c m o to r s am o un ting t o a t o t a l o f b e tw e e n 6 ,0 0 0 and 7 ,0 0 0 h o rs e p o w e r a r e now i n u s e i n t h e San J o a q u in V a l l e y o i l f i e l d s f o r pum ping an d c l e a n i n g w e l l s . T hese i n s t a l l a t i o n s a t p r e s e n t e f f e c t a s a v i n g o f n o t l e s s t h a n 1 4 ,0 0 0 b a r r e l s o f c r u d e p ie tro le u m p e r m o n th .3’ I t i s t o b e n o t e d , h o w ev e r, t h a t o v e r p r o d u c t i o n was n o t a p r o b le m o f the p e t r o l e u m i n d u s t r y a t t h a t t i m e . C om m ittee c o n c lu d e d i t s

She P e t r o l e u m

s tu d y by a s e r i e s o f re c o m m e n d a tio n s ,

f i r s t o f w hich was t h e f a l l o w i n g : We recommend t h a t e v e r y r e a s o n a b l e e f f o r t be made t o i n c r e a s e t h e p r o d u c t i o n o f C a l i f o r n i a p e t r o l e u m p r o m p tly a n d t h a t t o t h i s end a d d i t i o n a l d r i l l i n g b e u n d e r t a k e n , as q u i c k l y a s m a t e r i a l a n d l a b o r a r e a v a i l a b l e , on th e l a n d s on w h ic h th e l a r g e s t a d d i t i o n a l p r o d u c t i o n can be d e v e lo p e d i n th e l e a s t tim e a n d w i t h t h e s m a l l e s t e x p e n d i t u r e of m a t e r i a l and l a b o r •* I n c o n c l u s i o n , t h e n , i t i s t o be o b s e r v e d t h a t d u r i n g t h e w ar t h e c o n s e r v a t i o n movement was g i v e n im p e tu s a s a r e s u l t o f t h e s t r e s s p l a c e d upon th e im p o r ta n c e o f raw m a t e r i a l , b u t t h a t no a c t u a l s t e p was made to w a r d p r a c t i c a l c o n s e r v a t i o n . When th e e a r l y w a s t e s o f t h e p e t r o l e u m i n d u s t r y a re r e ­ c a l l e d , i t m ust b e rem em bered t h a t e f f i c i e n t m eth o ds had n o t y e t been d e v e lo p e d .

The i n d u s t r y was i n i t s

i n f a n c y and t h e

p r o d u c e r s w e re u s i n g t h e b e s t m eth o d s w h ic h w e re th e n a v a i l a b l e , l a b o r a t o r y r e s e a r c h a s a means o f o b t a i n i n g b e t t e r p r o d u c t i o n t e c h n i q u e was n o t y e t a t t h e i r d i s p o s a l . p r o d u c e r s w ere s t r i v i n g t o a t t a i n p ro d u c tio n .

On t h e w h o le , t h e

t h e maximum e f f i c i e n c y o f

Much p e t r o l e u m was a l s o l o s t b e c a u s e o f im p r o p e r

m e th o d s o f h a n d l i n g and s t o r a g e , b u t a g a i n i t m u st be remem1 2

C a l i f o r n i a S t a t e C o u n c il o f D e f e n s e , R e p o r t o f th e C om m ittee on P e t r o l e u m , 1 4 8 , I b i d . , 188.

20 b a r e d t h a t su ch m e th o d s w e r e a t t h a t ti m e t h e b e s t m e th o d s w h ic h h ad b e e n d e v i s e d *

I n t h e c o u r s e o f tim e b e t t e r s t o r a g e

f a c i l i t i e s have b e e n d e v e lo p e d and u t i l i z e d , and t h e l o s s e s due t o e v a p o r a t i o n , s e e p a g e , a n d c h a n g e o f s p e c i f i c g r a v i t y h a v e b e e n r e d u c e d u n t i l now ih e y a r e p r a c t i c a l l y n e g l i g i b l e . Such l o s s i s f u r t h e r e x p l a i n e d b y t h e f a c t t h a t i t w ould h a v e c o s t more t o s t o r e t h e o i l 1han s u c h e f f o r t s w ould h a v e p ro fite d

th e p ro d u c e rs .

The r e s i d u e c o u ld n o t b e u t i l i z e d

more c o m p le te ly b e c a u s e t h e t e c h n i q u e f b r d o in g so was l a c k ­ i n g , h e n c e the c o s t would h ave b e e n p r o h i b i t i v e .

One i s n o t

j u s t i f i e d , t h e r e f o r e , i n v o i c i n g to o s e r i o u s a c o n d e m n a tio n o f th e p e tro le u m i n d u s t r y i n i t s e a r l y y e a rs i n C a l i f o r n i a . C o n s e r v a t i o n d id n o t a t t h a t tim e a p p e a r t o be n e c e s s a r y . The f i r s t c o o p e r a t i v e movement i n C a l i f o r n i a r e s u l t i n g i n th e c o n s e r v a t i o n o f th e p e t r o l e u m r e s o u r c e s o c c u r r e d i n 1 1912. T h is was a n a g r e e m e n t b e tw e e n t h e S o u th e r n B a e i f i c Land Company,

th e p r e d e c e s s o r o f t h e P a c i f i c O i l Company,

and t h e A s s o c i a t e d O i l Company.

T hese two com p an ies h e l d

l a n d s i n Buena V i s t a H i l l s i n a n a r e a w h ere a n u p p e r sa n d c a rrie d d ry gas.

A c c o r d in g to

on t h e s e l a n d s was t o

th e a g r e e m e n t , a l l g a s p r o d u c e d

be d i v i d e d on t h e b a fe is o f a c r e a g e

h o l d i n g s a s d e t e r m in e d b y g e o l o g i s t s . e f f e c t iv e in p re v e n tin g

T h is a g re e m e n t p r o v e d

c o m p e titiv e l i n e d r i l l i n g .

How ever,

i t m ust be n o te d t h a t t h i s a g r e e m e n t was n o t i n s t i g a t e d b y a 1

M. E, L o m b a rd i, CrgS C o n s e r v a t i o n and P r o d u c t i o n i n C a l i f o r ­ n ia (M a n u sc rip t), 2.

£1 d e s i r e for* c o n s e rv & ti o n , b ut b y a r e c o g n i t i o n o f i t s i n o r d e r t o b r i n g m u tu a l b e n e f i t t o

n e c e ss ity

t h e p a r t i e s co n c e rn e d #

I n 19E1 a n d f b r two y e a r s f o l l o w i n g t h e g r e a t f l o o d o f o i l i n t h e L o s A n g e le s B a s in o c c u r r e d .

T h is was t h e tim e d u r ­

i n g w h ich th e t h r e e b o n a n z a p o o l s o f C a l i f o r n i a w ere b e i n g opened u p , S i g n a l H i l l , S a n ta Fe S p r i n g s , a n d H u n t i n g t o n Beach fie ld s#

She tr e m e n d o u s o v e r p r o d u c t i o n a s a c o n s e q u e n c e o f

th e f e v e r i s h d r i l l i n g a c t i v i t y w h ic h f o llo w e d t h e d i s c o v e r y o f 1 hese r i c h p o o l s r e s u l t e d i n a d e m o r a l i z a t i o n o f th e m ar­ k e t#

The d r o p i n t h e p r i c e o f c r u d e s r e s u l t e d i n a g r e a t

econom ic l o s s #

O il w as e i t h e r u t i l i z e d a s c r u d e when i t s

v a l u e would h av e b e e n g r e a t l y e n h a n c e d i f i t had b e e n r e f i n e d , o r i t w as d i s p o s e d o f o u t s i d e o f i t s l o g i c a l g e o g r a p h i c a l a re a , o fte n a t a lo s s . c o u ld n o t be s t o r e d ,

The tre m e n d o u s q u a n t i t i e s p r o d u c e d

i b r .s to r a g e f a c i l i t i e s w e re n o t a v a i l a b l e

f o r t h e l a r g e s u p p l y , an d f u r t h e r m o r e th e c o s t o f s t o r a g e w ould have b e e n p r o h i b i t i v e .

U nder t h e s e c o n d i t i o n s c o n s e r ­

v a t i o n became im p e r a t i v e # Due t o

“the f a c t t h a t t h e s e f i e l d s w e re b e i n g d e v e lo p e d

on th e itown l o t p l a n , c o o p e r a t i o n was p r a c t i c a l l y i m p o s s i b l e . I f t h e p o o l s h a d b e e n h e l d b y a s m a l l number o f p r o d u c e r s i t would h a v e b e e n p o s s i b l e to e f f e c t some k in d o f ‘a g r e e m e n t ; b u t u n d e r "the c i r c u m s t a n c e s , w i t h many p r o d u c e r s and many l e s s o r s , w i t h e v e r y p r o d u c e r a t t e m p t i n g t o ferihg o i l to the s u r f a c e b e f o r e a n a d j a c e n t w e l l d r a i n e d t h e o i l zone from w h ic h h i s w e l l a l s o o b t a i n e d i t s o i l , i t was i m p o s s i b l e to e f f e c t c o o p e r a tio n #

22 I n 192 1 an e v e n t t o o k p l a c e w h ic h , a l t h o u g h u n f o r t u n a t e i n some a s p e c t s , fro m t h e s t a n d p o i n t o f c o n s e r v a t i o n p r o v e d to h e a p a r t i a l rem e d y •

T h is w as t h e e x t e n s i v e o i l w o rk e rs*

s t r i k e i n t h e San J o a q u in V a l l e y f i e l d s w hich l a s t e d f o r a b o u t s i x t y d ays*

P r o d u c t i o n was f o r c i b l y r e s t r i c t e d a t th e tim e

when i t was mo*st n e c e s s a r y .

At th e c o n c lu sio n o f th e s t r i k e

a l a r g e p a r t o f th e p r o d u c t i o n o f t h e s e f i e l d s c o n t i n u e d t o be shut in .

T h is w as th e r e s u l t o f t h e p o l i c y o f t h e l a r g e r p r o ­

d u c e r s who h e l d p r o s p e c t i n g r i g h t s i n b o t h t h e V a ll e y f i e l d s a n d t h e Los A n g e le s B a s in f i e l d s , w ho, f i n d i n g a n o v e r p r o d u c t i o n i n th e Los A ngel es B a s i n , v o l u n t a r i l y l i m i t e d p r o d u c t i o n i n t h e V a l l e y f i e l d s t o a b o u t 1 0 0 ,0 0 0 b a r r e l s #

S in c e t h a t d a t e

t h e V a l l e y f i e l d s h a v e n o t b e e n p r o d u c i n g a t t h e i r maximum. I n t h i s c a s e a g a i n c o n s e r v a t i o n was e f f e c t e d , n o t b y th e a d o p t i o n o f a c o n s e r v a t i o n p r o g ra m , b u t b e c a u s e i t became im­ p e r a t i v e fro m t h e s t a n d p o i n t o f t h e i n d i v i d u a l p r o d u c e r * s a d v a n ta g e .

P r o d u c t i o n was l i m i t e d by i n d i v i d u a l s and i n a

Spasm odic m an n er, and a t t e n t i o n was g iv e n t o p e t r o l e u m w h i l e t h e c o n s e r v a t i o n o f n a t u r a l g a s p l a y e d no p a r t .

On th e c o n ­

t r a r y , t h e r a p i d d e v e lo p m e n t o f t h e B a s in f i e l d s i n c r e a s e d th e n a tu r a l g a s s u r p lu s to th e h ig h e s t p o in t in th e h i s t o r y o f th e i n d u s t r y i n C a l i f o r n i a * The n e x t i m p o r t a n t d e v e lo p m e n t o c c u r r e d i n 1927 a t th e V e n tu r a Avenue f i e l d .

I n 1925 t h i s f i e l d b e g a n t o show p r o m is e

o f d e v e lo p in g i n f o one o f ih e m o st p r o d u c t i v e a r e a s i n t h e sta te .

I t was a n i d e a l f i e l d f o r c o o p e r a t i v e e f f o r t b e c a u s e

23 a s m a l l number o f c o m p a n ie s h e l d p r o s p e c t i n g r i g h t s th e r e * The A s s o c i a t e d , th e S h e l l , and t h e G e n e r a l P e t r o l e u m p r a c ­ t i c a l l y c o n t r o l l e d th e p r o d u c t i o n o f t h e f i e l d *

On t h e o t h e r

h a n d , t h i s was an u n f a v o r a b l e one fro m t h e p o i n t o f view o f c o o p e r a t i v e c o n s e r v a t i o n b e c a u s e o f th e h i g h g a s - o i l r a t i o , w h ic h made t h e m a n i p u l a t i o n o f f l o w i n g w e l l s e x p e n s iv e and d i f f i c u l t , and t h e f u r t h e r f a c t t h a t i t was a p r o l i f i c f i e l d * The g a s - o i l r a t i o may b e d e f i n e d a s Ht h e number o f c u b i c f e e t o f g a s p r o d u c e d p e r b a r r e l o f o i l by a w e l l . ”1

A h ig h g a s - o i l

r a t i o m eans t h a t a r e l a t i v e l y l a r g e amount o f g a s i s p r o d u c e d i n t h e p r o d u c t i o n o f a g iv e n q u a n t i t y o f o i l .

When t h e g a s -

o i l r a t i o i s h i g h th e m a n i p u l a t i o n o f w e l l s i s b o th d i f f i c u l t and e x p e n s i v e b e c a u s e o f 1he g r e a t e r p r e s s u r e w h ic h m ust be brought u n d e r c o n t r o l . E a r l y i n 1927 i t w as e v i d e n t t h a t th e V e n tu r a f i e l d was p r o d u c i n g a g r e a t e x c e s s of n a t u r a l g a s , a n amount o v e r and a b o v e t h a t v h ic h c o u l d be u t i l i z e d f o r f i e l d n e e d s and a l s o beyond t h e c a p a c i t y o f t h e t r a n s m i s s i o n s y s te m o f t h e g a s com­ p a n ie s.

An a p p r e c i a t i o n of the v a l u e o f t h i s e x c e s s g a s and

a d e s i r e to o b t a i n more e f f i c i e n t o i l p r o d u c t i o n by c o n t r o l l i n g th e g a s - o i l r a t i o s l e d t h e o p e r a t o r s i n t h i s r e g i o n t o o r g a n ­ i z e t h e " V e n tu r a C o n s e r v a t i o n B o a rd ” #

T h is b o a r d was made up

c h i e f l y o f t h e e n g i n e e r s o f t h e m a jo r c o m p a n ie s h a v in g i n ­ t e r e s t s i n th e f i e l d .

I n F e b r u a r y , 1927 t h e f i r s t g as c o n ­

s e r v a t i o n p ro g ra m was e f f e c t e d b y t h i s b o a r d by t h e 1

P e t r o l e u m F a c t s an d F i g u r e s (Second E d i t i o n ) , 74 .

"p in c h in g

24 in " of c e r t a in w e lls ,

■i

th u s m a t e r i a l l y d e c re a s in g th e e x c e ss

p ro d u c tio n o f n a tu ra l g a s .

T h is p ro g ra m became e f f e c t i v e i n

May of t h a t y e a r and c o n t i n u e d u n t i l S e p te m b e r, when t h e Con­ s e r v a t i o n B oard p u t i n t o e f f e c t a se c o n d p ro g ra m o f p r o d u c t i o n c u r t a i l m e n t w h ich w as more f a r r e a c h i n g i n i t s

e ffe c ts.

T h is

p ro g ra m c o n t i n u e d u n t i l M arch, 1 9 2 8 , w hen i t was s u p e r c e d e d by th e

t h i r d p ro g ra m w h ic h c a l l e d f o r th e p i n c h i n g i n o f

4 0 ,0 0 0 ,0 0 0 c u b i c f e e t o f g a s d a i l y . A s e c o n d c o n s e r v a t i o n p ro g ra m was a d o p t e d a t th e Domin­ guez f i e l d .

T h is was l i k e w i s e a n i d e a l f i e l d f o r c o o p e r a t i v e

e f f o r t due to t h e f a c t t h a t t h e f i e l d w as p r a c t i c a l l y c o n ­ t r o l l e d by t h r e e co m p an ie s* The S h e l l Company o f C a l i f o r n i a , The U nion O il Company, a n d The A s s o c i a t e d O il Company.

Of

t h e s e t h r e e c o m p a n ie s , h o w e v e r, t h e S h e l l an d th e U nion w ere th e p r i n c i p a l p ro d u c e rs ,

la te

i n the

summer o f 1926 r e p r e ­

s e n t a t i v e s o f t h e S h e l l and t h e U nion c o m p a n ie s m et and a g r e e d to p u t i n t o e f f e c t a c o o p e r a t i v e g a s s t o r a g e p ro g ra m . I n S e p te m b e r , 1926 b o t h com panies b eg a n a p ro g ra m o f g a s i n ­ j e c t i o n i n Dominguez f i e l d .

T h is p ro g ra m c o n t i n u e d u n t i l

May, 1 9 2 7 , a t which tim e t h e s e c o m p a n ie s w e r e i n j e c t i n g a b o u t 1 , 5 0 0 , 0 0 0 c u b ic f e e t o f g a s d a i l y .

I n A p r i l i t was d e c i d e d

t o i n j e c t even a l a r g e r q u a n t i t y o f g a s .

R e p re se n ta tiv e s

fro m th e tw o co m p anies a g a i n m et and a g r e e d t h a t e a c h company w ould t h e r e a f t e r i n j e c t 1 0 ,0 0 0 ,0 0 0 c u b ic f e e t d a i l y . 1

T h is

" P in c h i n g i n " may be d e f i n e d a s t h e m a n i p u l a t i o n o f th e ~ flo w o r i f i c e o f a f lo w in g w e l l i n o r d e r to r e s t r i c t t h e p r o d u c t i o n o f g a s an d o i l .

25 p ro g ra m was p u t i n t o e f f e c t d u r i n g the f i r s t w eek o f May a n d was c o n t in u e d w i t h s l i g h t m o d i f i c a t i o n s u n t i l “th e f i r s t s t a t e ­ w id e c o & p e r a tiv e a t t e m p t i n 1 9 2 9 , The s u c c e s s o f t h i s c o o p e r a t i v e p rogram i s i n d i c a t e d by t h e f o l l o w i n g s t a t e m e n t made by Mr. E . W* M a s t e r s , P r o d u c t i o n E n g i n e e r o f th e S h e l l Company of C a l i f o r n i a , i n an a d d r e s s b e f o r e th e C a l i f o r n i a D i s t r i c t m e e t i n g o f th e D i v i s i o n o f D evelopm ent and E n g i n e e r i n g o f t h e A m e ric a n P e t r o l e u m I n s t i t u t e w h ic h w as h e l d i n Dos A n g e le s on S e p te m b e r 2 8 , 1 9 2 8 . As a p a r t o f th e s t a t e p ro g ra m t o c o n s e r v e g a s , t h e S h e l l Company o f C a l i f o r n i a and t h e Union O i l Company, rahich a r e p r i n c i p a l ow ners o f Dominguez f i e l d , a g r e e d t o c o n s i d e r t h e s t o r a g e o f g a s i n th e o i l s a n d s o f t h a t a r e a . T hrough t h e c o o p e r a t i o n o f t h e s e two co m p a n ie s and t h e i r l e s s o r s , t h i s p r o j e c t h a s a c t u a l l y d e v e lo p e d t o one o f m a jo r i m p o r t a n c e , so t h a t a t th e p r e s e n t tim e from 1 6 ,0 0 0 ,0 0 0 t o 1 8 , 0 0 0 ,0 0 0 c u b i c f e e t p e r d a y of g a s i s b e i n g s t o r e d . 1 On a c c o u n t o f th e s m a l l number o f p r o d u c e r s c o n t r o l l i n g Dominguez f i e l d , t h i s c o o p e r a t i v e g a s s t o r a g e p ro g ra m c o u l d be c a r r i e d o u t w i t h s u c h s u c c e s s t h a t v a l u a b l e c o n c l u s i o n s c o u l d b e draw n from t h e r e s u l t s o b t a i n e d .

The s u c c e s s o f g a s

s t o r a g e h a d b e e n more o r l e s s d u b i o u s , b u t a f t e r t h e Dominguez p ro g ra m h ad b e e n i n e f f e c t ,

some o f th e b e n e f i t s o f s u c h a

p r o c e d u r e w e re made c l e a r .

A n o th e r q u o t a t i o n fro m the a d d r e s s

o f Mr. M a s t e r s w i l l s u f f i c e t o i n d i c a t e th e 'e x c e l l e n t r e s u l t s w h ic h w e r e o b t a i n e d . Gas s t o r a g e h a s h a d a p r o n o u n c e d e f f e c t on th e m a j o r i t y o f p r o d u c i n g w e l l s i n th e f i e l d and t h e te n d e n c y o f g a s - l i f t 1

E . W. M a s t e r s , "Gas S t o r a g e B e n e f i t s O il P r o d u c t i o n i n Dominguez P i e l d " , The Q jl W e e k ly , O c to b e r 5 , 1 9 2 8 , V o l. 5 1 , No. 3 , p . 4 1 .

26 w e l l s t o f lo w n a t u r a l l y a f t e r g a s i n j e c t i o n was s t a r t e d h a s been © sp e c ia lly n o tic e a b le , T h ir ty -s e v e n w e lls w ere b e in g flo w e d b y g a s l i f t b e f o r e th e t e s t b eg a n an d r e q u i r e d a t o t a l d a i l y d r y g a s c i r c u l a t i o n o f 9 ,2 2 0 ,0 0 0 c u b i c f e e t . On Septem b e r 1 th e t o t a l number o f w e l l s on g as l i f t had b e e n r e d u c e d t o 1 9 , so t h a t 18 w e l l s a r e now f lo w in g n a t u r a l l y a g a in w i t h ­ o u t th e a s s i s t a n c e o f d r y g as c i r c u l a t i o n . The volume o f d r y g a s c i r c u l a t i o n h a s a l s o b e e n r e d u c e d t o 4 , 2 6 8 ,0 0 0 c u b i c f e e t by th e l a t t e r d a t e , r e p r e s e n t i n g a p ro n o u n c e d s a v in g i n o p e r ­ a t i n g c o s t s . M o re o v e r, o b s e r v a t i o n s i n d i c a t e t h a t s e v e r a l o f t h e r e m a in in g g a s - l i f t w e l l s w i l l so o n be f l o w i n g n a t u r a l l y an d t h i s w i l l f u r t h e r r e d u c e o p e r a t i n g c o s t s . The a g r e e m e n t s o f t h e p r o d u c e r s i n t h e Dominguez f i e l d h av e a ls o . r e s u l t e d i n c o n s e r v a t i o n a s shown b y t h e o r d e r l y m anner i n w h ic h i h i s f i e l d fie ld

has been d e v e lo p e d .

Dominguez

i s made up o f a number o f z o n e s o f o i l h e a r i n g s a n d s .

O th e r f i e l d s o f a s i m i l a r g e o l o g i c a l s t r u c t u r e h a v e b e e n e x ­ p l o i t e d w i t h a tr e m e n d o u s w a s t e o f g a s and o i l a s a r e s u l t o f c o m p e titiv e d r i l l i n g .

Lower o i l b e a r i n g zo n e s h a v e b een

t a p p e d b e f o r e t h e u p p e r zone o r zo n e s have b e e n d e p l e t e d . H ow ever, i n Dominguez f i e l d zone wduH

th e p r o d u c e r s a g r e e d t h a t a l o w e r

n o t be t o u c h e d by t h e d r i l l u n t i l t h e maximum r e ­

c o v e r y o f the u p p e r zone had b e e n a t t a i n e d .

T e s t w e l l s h av e

o c c a s i o n a l l y b e e n d r i l l e d to lo w e r z o n e s , b u t th e p r o v i s i o n s o f th e a g r e e m e n t s h av e b e e n s t r i c t l y a d h e r e d t o ; h e n c e t h e r e h a s b e e n no w a ste o f n a t u r a l g a s , no d i s s i p a t i o n o f g a s p r e s s u r e , a n d no p h y s i c a l w a s te o f o i l . D u rin g t h e tim e a t w h ic h t h e s e c o o p e r a t i v e movements to o k p l a c e , t h e g a s c o n s e r v a t i o n movement w as g i v e n im p e tu s by th e a c t i o n o f t h e G o v e rn o r. 1

E . W. M a s t e r s , Loc * O i t . , 44#

On O c to b e r 1 9 , 1927 G overnor

27

Young i s s u e d a s t a t e m e n t c a l l i n g th e a t t e n t i o n o f th e p e o p l e o f th e s t a t e t o t h e c o n d i t i o n s e x i s t i n g i n t h e o i l f i e l d s i n r e g a r d t o th e w a s t i n g o f n a t u r a l g a s .

F u r t h e r m o r e , he a p p o i n t e d

a c o m m itte e t o i n v e s t i g a t e th e o i l p r o d u c t i o n s i t u a t i o n and to d e v i s e a p la n f o r g a s c o n s e r v a tio n .

T h is c o m m itte e c o n ­

s i s t e d o f t h e f o l l o w i n g s t a t e o f f i c i a l s : A l e x a n d e r B* H e ro n , S t a t e D i r e c t o r o f F i n a n e e ; B e r t B. Meek* S t a t e D i r e c t o r o f P u b l i c W o rks; F r e d G. S t e v e n o t , S t a t e D i r e c t o r o f P u b l i c Re­ s o u r c e s ; U. S. Webb, A t t o r n e y - G e n e r a l ; a n d fm , J . C a r r , If em ber o f t h e S t a t e R a i l r o a d Commission* The c o m m itte e t h e n m et w ith a g r o u p o f o i l ceompany e x e c u t i v e s r e p r e s e n t i n g p r a c t i c a l l y th e e n t i r e C a l i f o r n i a p e tro le u m in d u s t r y .

On J a n u a r y 6* 1928 t h i s g ro u p an n o u n c e d

t h e a p p o in tm e n t of t h e " O p e r a t o r s ’ G e n e r a l C om m ittee on Gas C o n s e r v a t i o n ’?, w i t h Mr* M* 32* D o m b ard i, D i r e c t o r o f t h e S ta n d a r d O i l Company a s c h a ir m a n .

The O p e r a to r s * G e n e ra l

C o m m ittee, m e e tin g i n Dos A n g e le s on J a n u a r y 2 3 , 1 9 2 8 , o r ­ g a n i z e d f o u r s u b - c o m m itte e s t o c o l l e c t d a t a *

A v a s t am ount

o f d a t a w as a s s e m b le d by t h e s e s u b - c o m m i t t e e s and p r e s e n t e d a t a m e e t i n g o f t h e O p e r a to r s * G e n e ra l C om m ittee w h ic h was h e l d i n Dos A n g e le s on March f o u r t e e n t h a n d f i f t e e n t h *

T h is

m a t e r i a l was d i g e s t e d a n d : r e - o r g a n i z e d b y a s u b - c o m m itte e and was t h e n p r e s e n t e d t o

th e G e n e ra l C o m m itte e .

On A p r i l 1 0 ,

1928 t h e O p e r a to r s * C om m ittee p r e s e n t e d t h e f i r s t

co m p lete

p i c t u r e o f g a s p r o d u c t i o n and u t i l i z a t i o n i n C a l i f o r n i a . R e a l i z i n g t h e n e c e s s i t y o f a c q u a i n t i n g th e o p e r a t o r s

28 t h r o u g h o u t the s t a t e w i t h t h e f a c t s r e g a r d i n g th e f u n c t i o n o f n a t u r a l g a s i n t h e p r o d u c t i o n of o i l ,

th e G p s e r a to rs 1 C om m ittee

h a d p u b l i s h e d s e v e r a l p a p e r s on t h i s s u b j e c t an d c i r c u l a t e d them among th e p r o d u c e r s .

I n th e m eantim e th e O p e r a t o r s 1

G e n e r a l C om m ittee h a d come t o a r e a l i z a t i o n o f t h e f a c t t h a t e x c e s s p r o d u c t i o n ceould n o t b e e n t i r e l y r e g u l a t e d by means o f p in c h in g i n w e l l s .

A t t e n t i o n mas t h e r e f o r e g i v e n t o t h e u n d e r ­

g ro u n d s t o r a g e o f s u c h g a s a s w ould o t h e r w i s e be w a s t e d .

Con­

s e q u e n t l y a n o t h e r s u b - c o m m itte e was a p p o i n t e d w i t h Mr. A. 0 . Rub e l o f th e U nion O il Gompany a s c h a ir m a n .

T h is e o n m i t t e e

was made up o f e n g i n e e r s r e p r e s e n t i n g t h e c o m p a n ie s en g ag ed i n g a s s t o r a g e vsork.

The r e g i o n a l s u b - c o m m itte e s p r e v i o u s l y

a p p o i n t e d c o n t i n u e d to wark f o r i h e c o r e s e r v a tio n o f n a t u r a l g a s i n the f i e l d .

Mr. Reed B ush, C a l i f o r n i a S t a t e O il and Gas

S u p e r v i s o r , was p u t i n c h a rg e o f t h e s e c o m m i t t e e s . Some o f th e f a c t o r s r e t a r d i n g t h e p r o g r e s s o f c o n s e r v a ­ t i o n h ave b e e n n o t e d , b u t t h e r e i s a n o t h e r f a c t o r w h ic h (ex­ p l a i n s th e l a c k o f c o o p e r a t i o n i n t h e p a s t . e ra l fe e lin g

T h is i s t h e g e n ­

■which e x i s t e d among p r o d u c e r s and p e t r o l e u m e n ­

g in e e r s t h a t ag ree m en ts a f f e c t i n g c u r ta ilm e n t o f p ro d u c tio n w o u ld be i n v i o l a t i o n o f th e a n t i - t r u s t a c t s . t i v e movements d e v e lo p e d s l o w l y an d c a u t i o u s l y .

H ence c o o p e r a ­ I t w as b e ­

l i e v e d t h a t a n y c u r t a i l m e n t a g r e e m e n t w ould b e i l l e g a l , and t h a t i f t h e a n t i - t r u s t la w s w ere s t r i c t l y

enforced a la r g e

number o f o p e r a t o r s w ould be l i a b l e t o h e a v y f i n e s o r i m p r i s o n ­ m e n t.

Thus th e a t t i t u d e d e v e lo p e d i n t h e o i l i n d u s t r y t h a t

£9 th e a n t i - t r u s t l e g i s l a t i o n

^ io u ld be am ended i n th e i n t e r e s t

o f c o n s e r v a tio n in th e p e tro le u m in d u s t r y .

But a s a g r e e m e n t s

w ere e f f e c t e d an d w e re n o t q u e s t i o n e d by t h e c o u r t s ,

the p r o ­

d u c e r s came t o b e l i e v e t h a t t h e i r a c t i o n s w e re n o t lo o k e d upon w i t h d i ; s f a v o r , and t h a t f u r t h e r a g r e e m e n ts m ig h t b e e n t e r e d in to

w ith some d e g r e e of s a f e t y .

How ever, t h e

e a r ly co o p era­

t i v e movements w ere n o t on so l a r g e a s c a l e a s t o a r o u s e p u b ­ l i c p r o t e s t , h en c e t h e a g r e e m e n t s w e re n o t p u t t o a t e s t . I n m aking a s tu d y o f th e h i s t o r y o f c o n s e r v a t i o n i n C a l ­ i f o r n i a an d i n l e a d i n g up t o t h e Gas C o n s e r v a t i o n la w o f 19£9 i t i s i n p l a c e t o c o n s i d e r t h e e a r l y la w s p e r t a i n i n g t o c o n ­ s e r v a t i o n w h ic h h ave b e e n p a s s e d b y the C a l i f o r n i a S t a t e le g isla tu re .

The f i r s t l e g i s l a t i v e e n a c tm e n t i n t h i s c o n n e c t i o n

was t h e A c t o f March £5* 1 9 1 1 .

f h i s w as " a n a c t p r o h i b i t i n g

t h e u n n e c e s s a r y w a s tin g o f n a t u r a l g a s i n t o t h e a tm o s p h e r e ; p r o v i d i n g f o r t h e c a p p i n g o r o t h e r w i s e c l o s i n g o f w e l l s from w h ic h n a t u r a l g a s f l o w s ; and p r o v i d i r ^ p e n a l t i e s f o r v i o l a t i n g th e p r o v i s i o n s o f t h i s a c t . "

More s p e c i f i c a l l y ,

th e a c t

p r o h i b i t e d th e w i l l f u l p e r m i t t i n g o f n a t u r a l gas to escap e i n t o t h e a tm o s p h e r e b y a n y p e r s o n s , f i r m s , c o r p o r a t i o n s , or o th e r a s s o c ia tio n s .

F u r t h e r m o r e , t h a t upon t h e abandonm ent o f

an y w e l l , t h e owner s h o u ld ca p t h e mouth o f th e w e l l i n o r d e r to p r e v e n t t h e u n n e c e s s a r y w a s t e o f n a t u r a l g a s ,

V io la tio n

o f t h i s la w w as t o be p u n i s h a b l e by a f i n e o f n o t more t h a n 1

C a_l i f o r n i a Laws f o r t h e C o n s e r v a t i o n o f P e t r o l e u m and G as,

30 one th o u s a n d d o l l a r s , o r im p riso n m e n t f o r n ot more t h a n one y ea r, or b o th .

I n e f f e c t t h i s law w as n u l l an d v o i d , f o r

no a t t e m p t was made to e n f o r c e i t . On M arch 2 0 , 1909 t h e C a l i f o r n i a S t a t e L e g i s l a t u r e had p a s s e d a law w h ic h had a s i t s o b j e c t t h e p r e v e n t i o n o f i n ­ j u r y t o o i l an d g as b e a r i n g f o r m a t i o n s b y t h e i n f i l t r a t i o n o f w a te r.

T h is l a w , l i k e

th e A c t o f 1 9 1 1 , h ad l i t t l e

b e c a u s e i t was n o t e n f o r c e d .

e ffe c t,

On Ju n e 1 0 , 1915 t h e S t a t e

L e g i s l a t u r e ' r e p e a l e d th e A c t o f 1909 by th e p a s s a g e o f a sim ­ i l a r lav ;; t h i s la w , h o w e v e r, i n c l u d e d m e a s u r e s p r o v i d i n g f o r its

e n fo rc em e n t.

I t was "an a c t . e s t a b l i s h i n g an d c r e a t i n g

a d e p a r tm e n t o f t h e s t a t e m in in g b u r e a u f o r th e p r o t e c t i o n of

n a t u r a l r e s o u r c e s o f p e t r o l e u m a n d g a s f ro m w a s t e a n d

d e s t r u c t i o n t h r o u g h im p r o p e r o p e r a t i o n s i n p r o d u c t i o n ; p r o ­ v i d i n g f o r the a p p o in tm e n t o f a s t a t e o i l and g as s u p e r v i s o r ; p r e s c r i b i n g h i s d u t i e s and p o w e r s ; f i x i n g h i s c o m p e n s a tio n ; p ro v id in g

f b r th e a p p o i n t m e n t o f d e p u t i e s and e m p lo y e e s ;

p r o v i d i n g f o r t h e i r d u t i e s and c o m p e n s a tio n ; p r o v i d i n g f o r th e i n s p e c t i o n o f p e t r o l e u m and g a s w e l l s ; r e q u i r i n g a l l p e r ­ s o n s o p e r a t i n g p e t r o l e u m an d g as w e l l s t o maks c e r t a i n r e p o r t s ; p r o v i d i n g p r o c e d u r e f o r a r b i t r a t i o n of d e p a r t m e n t a l r u l i n g s ; c r e a t i n g a fu n d f o r t h e p u r p o s e s o f t h e a c t ; p r o v i d i n g f o r a s s e s s m e n t s o f c h a r g e s to be p a i d b y o p e r a t o r s and p r o v i d i n g f o r th e c o l l e c t i o n t h e r e o f ; and m ak in g an a p p r o p r i a t i o n f o r th e p u r p o s e s o f t h i s 1

a c t . ”^

The S t a t u t e s o f C a l i f o r n i a a n d Amendments to p . 1 4 04 .

th e C odes

1915,

31 T h is la w was a p p r o v e d on June 1 0 , 1915 a u l became e f f e c ­ t i v e on A u g u s t 9 , 1 9 1 5 .

The p r i n c i p a l o b j e c t o f t h e la w was

tJne p r e v e n t i o n o f i n j u r y to p e t r o l e u m a n d g a s b e a r i n g s t r a t a by w a t e r .

I t p r o v id e d f o r th e e s t a b l i s h m e n t o f a s e p a r a t e

d e p a r t m e n t o f t h e S t a t e M ining B u re a u known a s th e "D ep a rtm en t o f P e tr o le u m an d G a s " ,

IP u rth erm o ib , i t p r o v i d e d j b r the

a p p o in tm e n t o f a S t a t e O i l and Gas S u p e r v i s o r whose d u t i e s w ere t o s u p e r v i s e t h e d r i l l i n g , o p e r a t i o n , m a i n t e n a n c e , a n d abandonm ent of w e l l s i n C a l i f o r n i a , a l s o

to p r e v e n t damage

t o o i l and gas b y i n f i l t r a t i i ^ w a t e r s and th e l o s s o f o i l and g a s , so f h r a s t h i s q u i r e d to f i l e

was p o s s i b l e .

P r o d u c e r s w e re r e ­

n o t i c e of i n t e n t i o n s t o d r i l l and to k e e p a

d r i l l i n g l o g , show ing th e

d e p th o f o i l s t r a t a a n d t h e d e p t h

and l o c a t i o n o f w a t e r s t r a t a .

On t h e f a i l u r e

o f o p e ra to rs

to f u r n i s h s u c h r e p o r t s , t h e y were t o be s e r v e d n o t i c e by th e O il an d Gas S u p e r v i s o r , and i f fou nd g u i l t y , a f t e r a r ­ b i t r a t i o n o f t h e c a s e i f n e c e s s a r y , w ere l i a b l e t o a f i n e o f n o t l e s s t h a n $ 3 0 0 ,0 0 and n o t e x c e e d in g $ 1 ,0 0 0 . 0 0 f o r e a c h o ffen se.

The D e p a rtm e n t o f P e t r o l e u m and Gas was t o f u r n i s h

maps t o t h e p r o d u c e r s an d t o a s s i s t

th a n i n p r e v e n t i n g th e

d am aging o f p e t r o l e u m b e a r i n g s t r a t a a n d t h e l o s s o f o i l and gas. T h is la w w as e f f e c t i v e i n p r e v e n t i n g t h e i n j u r y o f p e t r o l e u m a n d g as b y w a t e r , b u t i t d i d n o t go f a r enough i n t h a t i t d id n o t p r e v e n t th e w a s tin g o f n a t u r a l g a s a n d p e tro le u m .

I t s p r o v i s i o n s r e g a r d i n g w a t e r w ere c a r r i e d o u t ,

32

■but o t h e r w i s e no a t t e m p t was made to p r e v e n t p e tro le u m an d n a t u r a l g a s .

th e l o s s o f

T h is law was am ended i n 1 9 1 7 ,

1 9 19 , and 1 9 2 1 , h u t t h e s e am endm ents d i d n o t m a t e r i a l l y a f f e c t i t s c o n te n t. Mr. Edwin H i g g i n s , S e c r e t a r y o f t h e C a l i f o r n i a O i l and Gas A s s o c i a t i o n , i n t h e o p e n in g a d d r e s s o f t h e D i s t r i c t Meet** i n g o f t h e P e tr o le u m D i v i s i o n o f t h e A m e ric a n I n s t i t u t e o f M in in g and M e t a l l u r g i c a l E n g i n e e r s , h e l d i n l o s A n g e le s on O c to b e r 3, 1 9 2 9 , s t a t e d t h a t no c o n s e r v a t i o n movement e x i s t e d i n C a lif o r n ia p re v io u s t o 1929. tru e .

To a l a r g e e x t e n t t h i s

is

The c o o p e r a t i v e p r o g r a m s w h ic h w e r e p u t i n t o e f f e c t

w ere s i g n i f i c a n t and t h e i r r e s u l t s c a n n o t be i g n o r e d .

How­

e v e r , a s t a t e - w i d e c o n s e r v a t i o n p ro g ra m on s u c h a s c a l e a s t o be b o t h p r a c t i c a l and e f f e c t i v e m ust mahe t h e s e e a r l y a t t e m p t s seem u n i m p o r t a n t .

These b e g i n n i n g s , h o w e v e r, w ere

i m p o r t a n t i n t h a t t h e y p a v e d t h e way f o r a more e f f e c t i v e p ro g ra m o f c o n s e r v a t i o n . I n a g e n e r a l way t h e e a r l y c o n s e r v a t i o n movement, s u c h a s i t w a s , was m a n i f e s t e d b y t h e v o l u n t a r y a c t i o n o f p r o d u c e r s i n a r r i v i n g a t some form o f c o o p e r a t i o n , by t h e

a c tio n o f th e

S t a t e l e g i s l a t u r e , and b y th e d ev e lo p m e n t o f a c o n s e r v a t i o n a t t i t u d e among b o t h p r o d u c e r s and c o n s u m e rs .

E ach o f t h e s e

f a c t o r s h a s c o n t r i b u t e d t o t h e movement a n d a t p r e s e n t t h e y a r e v i t a l f a c t o r s i n b r i n g i n g a b o u t a more e f f e c t i v e m ethod o f c o n s e r v in g t h e p e t r o l e u m r e s o u r c e s o f t h e s t a t e t h a n h a s h e r e to f o r e been p o s s i b l e .

D u rin g t h e p a s t two y e a r s p e t r o l e u m

33

c o n s e r v a t i o n lias r e c e i v e d ad d e d i m p e t u s , and c o n s e r v a t i o n to d a y i s one o f 1he p r e s s i n g p ro b le m s o f t h e p e t r o l e u m i n ­ d u stry ,

The d e v e lo p m e n ts w h ic h have more r e c e n t l y ta la s n p l a c e

m e rit d e t a il e d c o n s id e r a tio n .

CHAPTEH V THE METHODS OP COHSEBVATIOH

E ffe c tiv e

c o n s e r v a t i o n o f p e t r o l e u m a n d n a t u r a l gas i n ­

v o l v e s two g r o u p s of i n d i v i d u a l s , t h e p r o d u c e r s a n d t h e c o n ­ sum ers*

Of t h e s e tw o , h o w e v e r, th e g r e a t e r r e s p o n s i b i l i t y f a l l s

upon t h e p r o d u c e r s , an d c o n s e q u e n t l y a t t h e p r e s e n t tim e t h e g r e a t e r e f f o r t to w a rd c o n s e r v a t i o n i s b e i n g made by t h a t group*

The r e s e a r c h o f t h e p e t r o l e u m g e o l o g i s t s and t h e

p e t r o l e u m e n g i n e e r s com bined w i t h th e r e s u l t s o b t a i n e d by t h e o p e r a t o r s i n t h e f i e l d h av e made a v a i l a b l e a g r e a t d e a l o f i n f o r m a t i o n w h ic h i s now b e i n g p u t t o p r a c t i c a l u s e i n a t t e m p t s t o -co n serv e p e t r o l e u m and n a t u r a l g a s * D e s p i t e th e f a c t t h a t o i l and g as o c c u r t o g e t h e r i n m ost o f t h e C a l i f o r n i a f i e l d s , t h e m e th o d s em ployed i n e f f e c t i n g th e c o n s e r v a t i o n of t h e s e tw o r e s o u r c e s d i f f e r .

In r e g a r d to

th e c o n s e r v a t i o n o f n a t u r a l g a s , two g e n e r a l f a c t s h av e b e e n d e f in ite ly e sta b lish e d .

I n t h e f i r s t p l a c e , t h e m ost e f f e c ­

t i v e p ro g ra m o f g a s c o n s e r v a t i o n c a n n o t be a c c o m p l is h e d by th e e f f o r t s of th e

o p e r a t o r s i n a s i n g l e f i e l d n o r by means

o f i n d i v i d u a l c o n s e r v a t i o n p ro g ra m s i n t h e v a r i o u s f i e l d s * The good e f f e c t s o f c o n s e r v a t i o n i n one f i e l d o f f s e t by a n o v e r p r o d u c t i o n i n a n o t h e r f i e l d *

c a n e a s i l y be Gas c o n s e r v a ­

t i o n i n C a l i f o r n i a can b e t t e r b e a c c o m p l is h e d by means o f a s t a t e - w i d e p r o g ra m .

In t h e s e c o n d p l a c e , c o n s e r v a t i o n d e -

35 mands th e c o o p e r a t i o n o f a number o f g r o u p s .

Hot o n ly th e

o p e r a t o r s , bub a l s o th e l e s s o r s a r e i n v o l v e d , b e c a u s e c u r ­ t a i l m e n t p ro g ra m s a f f e c t b o t h g r o u p s .

'F u r th e r m o r e , th e c o o p e r ­

a t i o n o f t h e p i p e l i n e co m p an ie s i s n e c e s s a r y .

T h ese f a c t s

have b e e n w e l l e s t a b l i s h e d by p a s t e x p e r i e n c e . T h ere a r e two g e n e r a l m e th o d s of e f f e c t i n g g a s c o n s e r ­ v a tio n .

Gras may b e c o n s e r v e d by " r e s t r i c t i o n ” , w h ic h con­

s i s t s o f r e s t r i c t i n g t h e p r o d u c t i o n o f n a t u r a l g a s a t th e w e l l fro m t h e o i l and g a s zo n e s fro m w h ic h i t i s o b t a i n e d . S e c o n d , c o n s e r v a t i o n may be a c c o m p l is h e d by means o f " s t o r a g e ” , w h ich c o n s i s t s o f r e i n j e c t i n g th e s u r p l u s g a s p r o d u c e d , i n t o s a n d s fro m w h ic h i t c a n u l t i m a t e l y b e r e c o v e r e d . t h e s e m ethods h a v e b e e n p r a c t i c e d ,

B oth o f

and t h e y a r e a t p r e s e n t

t h e commonly u s e d f i e l d m e th o d s o f g a s c o n s e r v a t i o n . C o n s e r v a t i o n by r e s t r i c t i o n may b e a c c o m p l is h e d by s e v ­ e r a l d i f f e r e n t m e th o d s .

I n the f i r s t p l a c e , r e s t r i c t i o n o f

p r o d u c t i o n i s i n some c a s e s p o s s i b l e by c o m p l e t e l y c l o s i n g dry gas w e ll s .

T h is method c a n n o t be c a r r i e d o u t to an y g r e a t

e x t e n t b e c a u s e o f the s m a ll number o f d r y g as f i e l d s i n C a l­ i f o r n i a ; b u t in th e

i n t e r e s t s of c o n s e rv a tio n th e e x i s t e n t

d r y gas f i e l d s s h o u ld n o t b e p e r m i t t e d t o p r o d u c e g a s a s lo n g a s t h e r e i s a s u r p l u s p r o d u c t i o n o f gas i n o t h e r s e c t i o n s o f th e s t a t e .

An -ex ce p tio n t o t h i s r u l e m ig h t b e made i n t h e

case of a dry g as f i e l d lo c a te d n ea r a la r g e c e n te r o f con­ su m p tio n when w et g a s f i e l d s a r e l o e a t d d a t a c o n s i d e r a b l e d ista n c e .

W ith ihe p r e s e n t s y s t e m o f p i p e l i n e s ,

gas c a n

36

u s u a l l y be s u p p l i e d e a s i l y fro m some o t h e r f i e l d ,

T h is i n ­

d i c a t e s th e n e c e s s i t y o f o b t a i n i n g th e no O p e r a ti o n o f t h e p i p e l i n e c o m p a n ie s . A seco n d m ethod o f r e s t r i c t i o n i s b y th e m a n i p u l a t i o n o f flo w o z i f i c e s on f lo w in g w e l l s , or by w hat i s known a s ,fp i n c h i n g b a c k 11,

T h is i s

th e m ethod em ployed i n o r d e r t o o b ­

t a i n w hat i s known a s a d e s i r a b l e g a s - o i l r a t i o .

In a d e s i r ­

a b l e g a s - o i l r a t i o a r e l a t i v e l y s m a l l p r o d u c t i o n o f g a s accom­ p a n i e s th e p r o d u c t i o n o f a g i v e n q u a n t i t y o f o i l .

The d e t e r ­

m i n a t i o n o f d e s i r a b l e g a s - o i l r a t i o s p l a y s a p r o m in e n t p a r t I n b o th gas and o i l c o n s e r v a t i o n i n t h a t i t l i m i t s t h e p r o d u c t i o n o f b o t h o i l an d g a s .

T h is m ethod o f r e s t r i c t i o n was

em ployed a t V e n tu r a Avenue f i e l d

i n t h e c o o p e r a t i v e movement

w h ic h was p u t i n t o p r a c t i c e t h e r e .

In t h i s in s ta n c e a gas

flo w r e d u c t i o n o f t h i r t y - f i v e p e r c e n t r e s u l t e d i n an o i l flo w r e d u c t i o n o f t w e n t y p e r c e n t .

1

Uot o n ly i s t h i s m e th o d

e f f e c t i v e in c u r t a i l i n g g a s p r o d u c tio n , but i t a l s o r e s u l t s in a g re a te r u ltim a te reco v ery .

The e x c e l l e n t r e s u l t o b t a i n e d

b y t h i s m ethod o f r e s t r i c t i o n i s i n d i c a t e d b y t h e f o l l o w i n g s t a t e m e n t o f Mr. Brown made i n J u n e , 1 9 2 9 : I n a s i m i l a r m an n er o t h e r f i e l d s w e re p in c h e d i n so t h a t a t t h e p r e s e n t tim e t h e t o t a l n a t u r a l g a s p r o d u c t i o n th u s c u r t a i l e d or p in c h e d i n , a m o u n ts to 1 4 5 ,0 0 0 ,0 0 0 c u b ic f e e t p e r d a y , or 14*5 $ o f th e t o t a l d a i l y p r o d u c t i o n o f th e . s t a t e . * A t h i r d method o f r e s t r i c t i o n i s 1 2

a c c o m p lis h e d by t h e

M. B. L o m b a rd i, Qas C o n s e r v a t i o n a n d P r o d u c t i o n i n C a l i f o r ­ n i a ( M a n u s c r i p t ) , 16 • C. 0 . Brown, N a t u r a l Gras i n C a l i f o r n i a ( M a n u s c r i p t ) , 1 0 .

37 c o m p le te s h u t t i n g i n o f h i g h g a s - o i l r a t i o w e l l s . was a l s o

T h is m eth o d

employed i n t h e V e n tu r a Avenue c o o p e r a t i v e p r o g ra m .

Suceh w e l l s p r o d u c e a l a r g e q u a n t i t y o f g a s a n d a s m a l l q u a n t i t y of o il.

?/hen t h e r e i s no a v a i l a b l e m a r k e t t h e

blow n i n t o t h e a i r and t h u s w a s t e d .

s u r p l u s g as i s

C o n se rv a tio n of n a t u r a l

g a s demands t h a t isuvCh w e l l s be c l o s e d i n , t h e demand f o r n a t u r a l g a s b e in g s a t i s f i e d b y th e w e l l s w ith a low g a s - o i l r a t i o * T h is method and t h e p r e v i o u s method h a v e o f t e n b e e n u n s u c c e s s ­ f u l b e c a u s e a v e r y h i g h d e g r e e o f c o o p e r a t i o n on th© p a r t of th e p r o d u c e r s i s n e c e s s a r y .

The p r a c t i c e o f t h e s e m eth o d s

h a s g e n e r a l l y r e s u l t e d i n a d e c r e a s e i n p r e s e n t r e v e n u e to t h e p ro d u c e rs concerned as a r e s u l t o f t h e i r d e c re a s e d p r o d u c tio n o f b o t h o i l an d n a t u r a l g a s o l i n e .

I f t h e s e m e th o d s w ere em­

p lo y e d on a l a r g e s c a l e , t h e d e c r e a s e d s u p p l y w ould r e s u l t i n a h i g h e r v a l u e ; b u t w i t h th e -usual c o n d i t i o n o f a g e n e r a l o v e r ­ s u p p l y and t h e f a c t t h a t th e m e th o d s a r e em ployed on a s m a ll s c a l e , an i n c r e a s e i n v a lu e i s not l i k e l y to ta k e p la c e .

Such

m e th o d s a r e t h e r e f o r e c o n t r a r y t o th e p e c u n i a r y i n t e r e s t s o f t h e p r o d u c e r s who p r a c t i c e th e m . The f o u r t h m e th o d o f r e s t r i c t i n g p r o d u c t i o n i s by th e h o l d i n g o f b a c k p r e s s u r e on t h e c a s i n g h e a d s o f pum ping w e l l s . T h is m ethod a l s o r e q u i r e s c o n s i d e r a b l e c o o p e r a t i o n on th e p a r t o f t h e p r o d u c e r s , b e c a u s e i t so m e tim e s r e s u l t s i n a te m p o ra ry d ec re ase in th e p ro d u c tio n of o i l .

T h is m etho d h a s b e e n em­

p lo y e d t o a d v a n ta g e i n t h e Kern O ounty f i e l d s . The s e c o n d g e n e r a l m ethod o f e f f e c t i n g g a s c o n s e r v a t i o n

38 i s by ^ s to ra g e .

The s i m p l e s t m eth od o f s t o r i n g n a t u r a l g a s i s

by r e i n j e c t i n g t h e e x h a u ste d .

s u r p l u s gas i n t o g a s s a n d s v h ic h h a r e b e e n

T h is m ethod i s l i m i t e d b y th e f e e t t h a t e x h a u s t e d

g a s s a n d s a r e n o t a lw a y s a v a i l a b l e i n f i e l d s w h e re t h e r e i s a la rg e su rp lu s.

A tr e m e n d o u s am ount o f n a t u r a l g a s i s i n e v -

i t a b l y p r o d u c e d when a new and r i c h c o v e r e d and d e v e l o p e d .

f i e l d i s s u d d e n ly d i s ­

I n :such a e a s e g a s r e s e r v o i r s i n th e

form o f e x h a u s t e d s a n d s a r e n o t a v a i l a b l e .

The p r a c t i c e o f

t h i s m ethod i s f u r t h e r r e s t r i c t e d by th e .f e e t t h a t t h e c o s t o f t r a n s m i s s i o n o f th e g a s , when t h i s becom es n e c e s s a r y , i s ad d e d t o th e c o s t o f s t o r a g e . tic e d s u c c e ssfu lly .

Y et t h i s m ethod h a s b e e n p r a c ­

The o u t s t a n d i n g exam ple i s t h e e a s e o f

Buena V i s t a H i l l s i n Hern C o u n ty .

In f e is s tr u c t u r e a dry

g a s zone i s l o e a t e d ab o v e th e o i l h o r i z o n ,

and i n t h e p a s t a

l a r g e amount o f n a t u r a l g as h as b e e n p r o d u c e d fro m - t h i s d r y g as zone.

Under th e p r e s e n t a r r a n g e m e n t , no g as i s b e i n g ob­

t a i n e d from t h e d r y g a s z o n e , w h i l e on t h e c o n t r a r y a l a r g e amount o f s u r p l u s g a s i s b e i n g i n j e c t e d i n t o

th is n a tu ra l

re se rv o ir* The se c o n d m ethod o f g a s s t o r a g e i s t h e i n j e c t i n g o f n a t u r a l g as in f o p a r t l y e x h a u ste d o i l zo n es.

T h is m ethod h a s

t h e a d v a n ta g e o v e r t h e p r e v i o u s m ethod o f b e in g p r a c t i c a l i n a l a r g e r number o f o i l f i e l d s .

I t was em ployed i n Dominguez

f i e l d by t h e c o o p e r a t i v e a g r e e m e n t o f t h e S h e l l Company o f C a l i f o r n i a , th e U nion O il Company a n d t h e A s s o c i a t e d O il Com­ pany.

In t h i s c a se a g a in a v ery h ig h d eg ree o f c o o p e ra tio n

39 i s e s s e n t i a l , becau^se t h e i n j e c t i o n o f g a s b y one p r o d u c e r may h av e l i t t l e

e f f e c t upon t h e p r o d u c t i v i t y o f h i s w e l l , b u t

may h a v e a d e c i d e d e f f e c t upon some b t h e r w e l l *

Thus' o n ly b y

m u tu a l e f f o r t can e a c h o p e r a t o r be a s s u r e d t h a t he w i l l s h a r e i n t h e a d v a n ta g e d e r i v e d by t h e p r a c t i c e o f t h i s method* I t i s s i g n i f i c a n t t o n o t e t h a t t h e e n t i r e am ount o f g a s w h ich i s r e i n j e c t e d i n t o th e s a n d s c a n n o t be r e c o v e r e d *

A

c e r t a i n am ount o f l o s s i s i n e v i t a b l e , b u t t h e l o s s , p r o v i d e d t h e m ethods a r e p z o p e r l y u s e d , n ee d n o t b e so g r e a t a s t o make such s to r a g e u n p r o f it a b l e .

I t m ust a l s o b e rem em bered t h a t

n o t o n l y i s a l a r g e amount o f g a s s a v e d , b u t a l s o a g r e a t e r u l t i m a t e r e c o v e r y i s made p o s s i b l e b e c a u s e t h e i n j e c t e d g a s i n th e c a s e o f p a r t l y ex h a u ste d san d s s e rv e s to in c r e a s e th e p r e s s u r e and th e re b y in c re a s e th e y i e l d o f p e tro le u m . B oth o f t h e s e m e th o d s o f g a s c o n s e r v a t i o n , r e s t r i c t i o n and s t o r a g e , w ere t h o r o u g h l y .s tu d i e d b y th e O p e r a to r s * G e n e ra l Com m ittee on Gas C o n s e r v a t i o n and b o t h h ave b e e n p r a c t i s e d s u c c e s s f u l l y s i n c e t h a t tim e *

I t was t h e o p i n i o n o f t h e

c o m m itte e t h a t t h e r e s t r i c t i o n m ethod was p r a c t i c a l i n a l m o s t every l i g h t o i l f i e l d commended gas.

i n th e s t a t e ; th e

co m m ittee f u r t h e r r e ­

t h i s a s t h e m o st e f f e c t i v e m e th o d o f c o n s e r v i n g

The r e s t r i c t i o n m ethod i s

th e s i m p l e r m e th o d o f th e tw o ,

b u t i t p r e s e n t s a number o f d i f f i c u l t i e s .

Such d i f f i c u l t i e s

a r i s e o u t o f t h e ifh e t th a t* r e s t r i c t i o n m e th o d s mean a d e c r e a s e i n p r e s e n t in c o m e , a f a c t w h ic h makes b o t h o p e r a t o r s and l e s s o r s r e l u c t a n t to

ado pt th e m .

The s t a t e ,

i n a n a t t e m p t t o accom -

40 p l i s h th e has been

a d o p t i o n o f e o n s e r v a t i o n m e th o d s by the o p e r a t o r s , c o n d u c t i n g a n e d u c a t i o n a l p ro g ra m b y means o f b o o k ­

l e t s , and m a g azin e and n ew sp a p er a r t i c l e s . The

r e s t r i c t i o n m ethod h a s p r o v e n t o be t h e

more s u c c e s s ­

f u l and g i v e s t h e g r e a t e r p r o m is e o f f u t u r e s u c c e s s .

S to r a g e

i s n o t a s s u c c e s s f u l a s r e s t r i c t i o n b e c a u s e t h e am ount o f g a s a v a ila b le

f o r sto ra g e is

c o m p a ra tiv e ly s m a ll, n a t u r a l r e s e r ­

v o i r s a r e n o t a b u n d a n t , an d f i n a l l y b e c a u s e th e n e c e s s i t y o f t r a n s m i s s i o n a n d c o m p re s s io n a d d s a f u r t h e r c o s t i t e m w h ic h i s u l t i m a t e l y r e f l e c t e d by a h i g h e r m a rk e t p r i c e *

The s u c c e s s o f

r e s t r i c t i o n o v e r s t o r a g e i s in& iccated b y t h e f o l l o w i n g * s ta te m-ent o f Mr* L o m b a rd i: TTWe a r e c o n s e r v i n g by r e s t r i c t i o n

(w ith ­

o u t t a k i n g i n t o a c c o u n t s h u t i n d r y gas w e l l s ) some 180 m i l l i o n c u b ic f e e t p e r d a y , and b y s t o r a g e , some 35 o r 40 m i l l i o n f e e t p e r d a y . n^

A c c o rd in g to

the A m e ric a n P e tr o le u m I n s t i t u t e ,

,Tth e

i m p o r ta n c e o f g a s i n j e c t i o n , i n one o r more o f i t s v a r i o u s p h a s e s , i s r e c o g n i z e d a s p e r h a p s th e o u t s t a n d i n g f e a t u r e o f th e moment i n o i l p r o d u c t i o n . n

p

Uo a c c o u n t o f g a s c o n s e r v a t i o n i n C a l i f o r n i a i s c o m p le te w i t h o u t c a l l i n g a t t e n t i o n to th e i m p o r t a n t p a r t w h ic h i s p l a y e d by th e g a s co m pan ies o f S o u t h e r n C a l i f o r n i a .

T hese com­

p a n i e s a r e v i t a l l y i n t e r e s t e d i n g as c o n s e r v a t i o n , b e c a u s e s u c h c o n s e r v a t i o n w i l l i n s u r e them a n a d e q u a t e s u p p l y o f n a tu ra l g as. 1 2

O b t a i n i n g an a d e q u a t e s u p p l y lia s p r e s e n t e d many

M* E* L o m b a rd i, Ojo. P i t . , 20. P e t r o l e u m P a c t s and F i g u r e s fS econ d E d i t i o n ) , 83*

41 p ro b le m s t o t h e

c o m p a n ie s .

In t h i s c o n n e c tio n th e f o llo w ­

in g w ords o f Mr. A* F . B r i d g e , V i c e - P r e s i d e n t o f t h e S o u th e r n C o u n ti es Gas Company, a re t o

th e p o i n t *

The s u p p l y o f n a t u r a l g a s a v a i l a b l e t o d i s t r i b u t i n g com­ p a n i e s i n S o u t h e r n C a l i f o r n i a v a r i e s o v e r a w id e r a n g e , t h e f l u c t u a t i o n s b e i n g w h o l l y u n r e l a t e d to t h e m a r k e t f o r g a s . T h ese f l u c t u a t i o n s r e s u l t fro m t i e d i s c o v e r y o f new o i l f i e l d s , t h e i n c r e a s e or d e c l i n e o f e x i s t i n g s o u r c e s , t h e c u r t a i l m e n t o r s h u t t i n g i n o f o i l p r o d u c t i o n , and c h a n g e s i n g a s f u e l r e ­ q u ir e m e n ts o f o i l o p e r a t o r s f o r d r i l l i n g , r e f i n i n g , e t c f , t h e l a t t e r u s e s h a v i n g p z i o r i t y o v e r g a s s o l d t o d i s t r i b u t i n g com­ p a n i e s . 3* The econom ic d i s a d v a n t a g e o f a n u n c e r t a i n s u p p ly i s i l l u s ­ t r a t e d i n t h e c a s e o f S a n t a We S p r i n g s f i e l d w here g a s p r o d u c t i o n d e c l i n e d fro m 5 1 0 ,0 0 0 ,0 0 0 c u b ic f e e t t o 5 0 ,0 0 0 ,0 0 0 c u b i c f e e t i n e l e v e n m o n th s , a n d i n t h e c a s e o f A l a m i t o s H e i g h t s f i e l d w h ere p r o d u c t i o n d e c l i n e d from 1 0 2 ,0 0 0 ,0 0 0 c u b i c f e e t t o 2 9 ,0 0 0 ,0 0 0 c u b i c f e e t i n t h r e e m o n t h s . 2

The i n v e s t m e n t i n com­

p r e s s o r e q u ip m en t and p i p e l i n e s n e c e s s a r y f o r t h e t r a n s m i s s i o n o f g as fro m t h e f i e l d t o t h e c e n t e r s o f c o n s u m p tio n i s v e r y heavy.

Thus th e s e v e n t y - f i v e m ile p i p e l i n e s y s te m fro m t h e

V e n tu r a Avenue f i e l d t o Los A n g e le s r e p r e s e n t s a n i n v e s t m e n t . o f # 5 ,4 0 0 ,0 0 0 ? On th e demand s i d e t h e r e i s a s i m i l a r p r o b le m .

Both

th e d a l l y an d th e s e a s o n a l demand f o r gas f l u c t u a t e w i d e l y . F l u c t u a t i o n s i n t h e i n d u s t r i a l demand a r e l a r g e l y e x p l a i n e d by c h a n g e s i n t h e volum e o f b u s i n e s s and t h e c l o s i n g o f i n 1 2 3

A. F . B r i d g e , V a r i a b l e s o f H a t u r a l Gas P r o d u c t i o n and U t i l ­ i z a t i o n i n C a lif o r n i a (M a n u sc rip t), 1 . I b i d . , 2. I b i d . , 2.

42 d u s t r i a l p l a n t s on S un d ays an d t o some e x t e n t on S a t u r d a y a fte rn o o n s,

The f l u c t u a t i o n s i n th e d o m e s tic demand a r e a l ­

m o st e n t i r e l y e x p l a i n e d b y th e c h a n g e s i n t h e s p a c e h e a t i n g r e q u i r e m e n t s w h ic h f l u c t u a t e w i d e l y , from h o u r t o h o u r , d a i l y , an d from m onth t o m on th ,

T h is f l u c t u a t i o n h a s b e e n as g r e a t

a s 1 0 0 ,0 0 0 ,0 0 0 c u b i c f e e t d a i l y d u r i n g a s i n g l e m o n th f o r S o u th e r n C a l i f or n i a .

W ith su c h a w ide f l u c t u a t i o n t h e g as

c o m p an ie s m ust be p r e p a r e d to m eet t h e i r p e a k l o a d r e q u i r e ­ m e n ts . Thus w i t h a n u n c e r t a i n s u p p l y a n d a n u n c e r t a i n demand a n d t h e f u r t h e r f a c t t h a t t r a n s m i s s i o n e q u ip m e n t i n v o l v e s a h e a v y c o s t , t h e g a s co m p an ies a r e v i t a l l y c o n c e r n e d i n g a s c o n s e rv a tio n ,

Any m e asu re w h ic h w i l l i n s u r e a r e g u l a r an d a

p r o l o n g e d s u p p ly o f n a t u r a l g a s w i l l m e et w i t h t h e i r a p p r o v a l and c o B p e ra tio n .

I n t h e p a s t some p i p e l i n e s h av e b e e n b u i l t

w h ic h , ow ing t o t h e r a p i d d e c l i n e i n t h e p r o d u c t i o n o f n a t u r a l g a s w h ic h f o l l o w e d t h e r a p i d d e v e lo p m e n t o f th e f i e l d , have been in o p e r a tiv e b e fo re c o m p le tio n .

The g a s co m p a n ie s

o f S o u t h e r n C a l i f o r n i a have c o o p e r a t e d i n a l l a t t e m p t s t o c o n s e r v e n a t u r a l ^ . s , a n d f u r t h e i m o r e t h e y have made i n d e ­ p e n d e n t s t u d i e s o f g a s c o n s e r v a t i o n m e th o d s . The c o n s e r v a t i o n o f o i l i s d i r e c t e d to w a r d t h e e l i m i n a ­ t i o n o f two k i n d s o f w a s te w h ic h ta k e p l a c e i n t h e p e t r o l e u m in d u stry .

P i r s t , t h e r e i s th e econom ic w a s te w h ic h r e s u l t s

from t h e p r o d u c t i o n o f o i l i n g r e a t e x c e s s o f c u r r e n t n e e d s . T h is r e s u l t s i n w a s t e in a sm u c h a s t h e s u r p l u s o i l m ust be

43 s t o r e d u n t i l i t o a n toe m a r k e te d .

C o n seq u en tly e i t h e r th e

c o s t o f s t o r a g e c o n t a i n e r s and t h e c o s t o f l a b o r and o t h e r e x p e n s e s n e c e s s a r y to s t o r i n g t h e o i l m u st u l t i m a t e l y toe added t o t h e c o s t o f the o i l , co rre sp o n d in g l o s s .

o r t h e p r o d u c e r s m u st s u f f e r a

I t i s a w a s t e in asm u ch a s m a t e r i a l s and

l a b o r a r e u t i l i z e d f o r a p u r p o s e f o r which thcere n ee d toe no a c tu a l n e c e ss ity .

The rem ed y f o r o v e r p r o d u c t i o n l i e s i n

c o o p e r a t i o n an d c u r t a i l m e n t .

I n a number o f the i m p o r t a n t

p r o d u c i n g f i e l d s o f C a l i f o r n i a c o o p e r a t i v e movements have r e c e n t l y been a d o p te d .

T hese w i l l toe t a k e n up i n g r e a t e r

d e ta il la te r . I n th e se c o n d p l a c e , c o n s e r v a t i o n i s e f f e c t e d toy d e ­ c r e a s i n g t h e p h y s i c a l w a s t e w h ic h t a k e s p l a c e i n th e p r o d u c ­ tio n of o il.

The tre m e n d o u s p h y s i c a l w a s t e o f o i l w h ic h

to o k p l a c e d u r i n g th e e a r l y d a y s o f t h e i n d u s t r y h a s b e e n o v e r ­ come t o a l a r g e e x t e n t b e c a u s e o f t h e p r e s e n t a v a i l a b i l i t y of sto ra g e f a c i l i t i e s .

O i l i s no l o n g e r p e r m i t t e d to flo w

away, b e c a u s e i t c a n toe r u n i n t o s t o r a g e a l m o s t im m e d i a t e l y . L i k e w i s e , p h y s i c a l w a ste h a s a l s o b e e n overcom e t o some e x ­ t e n t toy t h e im provem ent o f s t o r a g e m e th o d s ,

The e a r l y t a n k s

w ere w a s t e f u l i n t h a t t h e y p e r m i t t e d a h i g h l o s s o f o i l due to seepage, e v a p o ra tio n ,

and c h a n g e s i n s p e c i f i c g r a v i t y .

The p r e s e n t t a n k s h av e r e d u c e d t h i s l o s s t o a minimum.

F ur­

t h e r m o r e , t h e e a r l y l o s s e s due t o im p r o p e r h a n d l i n g an d t r a n s ­ p o r t a t i o n o f o i l h av e l i k e w i s e b e e n d e c r e a s e d a p p r e c i a b l y . A t p r e s e n t t h e p h y s i c a l w a s t e o f o i l i s a p ro b le m f o r

44 th e p r o d u c t i o n e n g i n e e r .

I n o t h e r w ,ords, th e s o l u t i o n to t h e

p h y s i c a l w a s t e l i e s i n im p ro v in g p r o d u c t i o n m e th o d s .

D e sp ite

th e im p ro v e m e n ts w h ic h h av e h e e n m ade, t h e r e i s s t i l l a g r e a t need f o r f u r t h e r im p ro v e m e n t.

T h is i s i n d i c a t e d by t h e f o l l o w ­

in g s t a t e m e n t o f P r o f e s s o r L e s t e r 0 . U ren o f t h e U n i v e r s i t y o f C a l i f o r n i a i n h i s r e p o r t to

the F e d e r a l O i l C o n s e r v a t i o n

B oard i n 19 26: I t i s now g e n e r a l l y a d m i t t e d t h a t t h e p r e s e n t commonly u s e d m eth od s o f p r o d u c t i o n a r e s e c u r i n g l e s s t h a n 26 p e r c e n t o f the o i l t h a t i s a c t u a l l y p r e s e n t i n tir e r e s e r v o i r s a n d s . Some a u t h o r i t i e s h av e p l a c e d 13jie e x t r a c t i o n a s low a s 10 o r 15 p e r c e n t i n c e r t a i n f i e l d s . One of th e r e a s o n s f o r a p h y s i c a l w a ste o f o i l i s t h a t w a t e r , e i t h e r c o n f i n e d i n t h e o i l zone i t s e l f o r o c c u r r i n g i n s t r a t a s e p a r a t e fro m th e o i l z o n e , so m etim es f l o o d s t h e o i l s a n d s , n e c e s s i t a t i n g t h e abandonment o f w e l l s wi t h much o i l r e m a in in g i n t h e s a n d s w h ic h i s n o t e c o n o m i c a l l y r e c o v e r a b l e . Such l o s s e s when due t o s e c o n d a r y w a t e r s , o r w a t e r s o c c u r r i n g i n s t r a t a s e p a r a t e fro m t h e o i l zone b u t e n t e r i n g i t by a r t i ­ f i c i a l m e an s, c a n be o b v i a t e d ; h o w e v e r, i t i s more d i f f i c u l t t o overcome t h e w a t e r p ro b le m s w h ich r e s u l t fro m p r i m a r y w a te r s , or w a te rs o r i g i n a l l y c o n fin e d in th e o i l zone,

never­

t h e l e s s , a c o n s i d e r a b l e p r o p o r t i o n o f f l o o d i n g can be e n t i r e l y p r e v e n t e d b y th e u s e o f p r o p e r m e th o d s , w h i l e i n some c a s e s ev e n f l o o d e d w e l l s c a n be so t r e a t e d a s t o r e s t o r e p r o d u c t i v ­ ity . 1

The o u t p u t o f w e l l s s u f f e r i n g fro m w a t e r h a s i n many

F e d e r a l O il G o n s e r v a t i o n B o a r d ; C o m p lete R e co rd o f P u b l i c H e a r i n g s , 143•

45 c a s e s b e e n d o u b le d and q u a d r u p le d by th e u s e o f p r o p e r m e th o d s . A n o th e r m e th o d o f im p ro v in g p r o d u c t i o n l i e s i n t h e o r ­ d e r l y d ev e lo p m e n t o f o i l method, o f d r i l l i n g .

f i e l d s a s op posed t o th e town l o t

The tow n l o t m ethod h a s b e e n one o f t h e

g r e a t e s t c u r s e s o f t h e o i l i n d u s t r y , f o r i t h a s c a u s e d th e w a s t e o f n a t u r a l g a s and l o s s e s due t o u n n e c e s s a r y d r i l l i n g , o v e r p r o d u c t i o n o f o i l , an d d e c r e a s e d p r e s s u r e .

In t h i s connec­

t i o n Mr. I . ¥ . M a rc o sso n s a y s : I t i s e s tim a te d t h a t th e t h r e e bonanza p o o ls in S o u th e rn C a lif o r n ia w i l l cau se th e in d u s try an u ltim a te l o s s of ap p ro x ­ i m a t e l y $ 5 0 0 ,0 0 0 ,0 0 0 b e c a u s e o f u n n e c e s s a r y d r i l l i n g , s h r i n k ­ a g e o f p r i c e due t o e x c e s s s u p p l y , a n d d i s s i p a t i o n o f g a s p re s s u re .1 I n a n o r d e r l y d e v e lo p e d o i l f i e l d t h e w e l l s a r e p r o p e r l y sp a c e d , i n o th e r w ords, th e w e l l s a r e

so s p a c e d t h a t o n ly one

w e l l i s d r i l l e d i f one i s s u f f i c i e n t t o o b t a i n a goo d r e c o v e r y of o il.

The a d v a n t a g e s o b t a i n e d fro m s u c h d e v e lo p m e n t a r e i n ­

d i c a t e d b y a c o n s i d e r a t i o n o f th e s i t u a t i o n a t th e S i g n a l H i l l f i e l d w h e re i n some p l a c e s a s many as f i f t e e n w e l l s h a v e b e e n d r i l l e d w here one w ould h a v e b e e n s u f f i c i e n t .

Hot o n ly i s th e

c o s t o f e q u ip m e n t i n c r e a s e d f i f t e e n t i m e s , b u t a l s o th e l a r g e number o f w e l l s r e s u l t s i n a d e d r e a s e o f t h e p r e s s u r e w h ic h b r in g s th e o i l to th e s u r f a c e . a lo w e r u lti m a t e r e c o v e r y .

D ecreased p r e s s u r e r e s u l t s i n

Town l o t d r i l l i n g r e s u l t s i n b o t h

a p h y s i c a l and a n econ om ic w a s t e o f o i l ,

i n a d d i t i o n t o th e

w aste o f n a t u r a l ^ .s . 1

I . F . M a rc o s s o n , The B l a c k G o lc o n d a , 3 39 .

46 I t i s now q u i t e w e l l e s t a b l i s h e d t h a t t h e r i c h e s t p o o l s in C a l i f o r n i a have been d is c o v e r e d ,

and p e r h a p s th e g r e a t e s t

damage a s a r e s u l t o f town l o t d r i l l i n g h a s a l r e a d y t a k e n p la c e .

As a r e s u l t o f t h e Gas C o n s e r v a t i o n Law and th e p r o ­

d u c t i o n c u r t a i l m e n t p r o g ra m s w h ic h h a v e r e c e n t l y been a d o p t e d t h e l o s s e s due t o th e tow n l o t method a r e now b e i n g d e c r e a s e d . C o o p e r a t i o n i s a g a i n th e s o l u t i o n t o t h e p r o b le m . C l o s e l y c o n n e c te d w i t h g a s c o n s e r v a t i o n i s a n o t h e r o i l p r o d u c t i o n m ethod w h ic h l e a d s to c o n s e r v a t i o n . m e th o d o f r e p r e s s u r i n g b y t h e i n j e c t i o n o f g a s .

T h is i s t h e T h e o re tic a lly

r e p r e s s u r i n g i n d i c a t e d an i n c r e a s e d p r o d u c t i v i t y ; h o w e v e r, th e e a r l y a t t e m p t s a t r e p r e s s u r i n g d id n o t a c c o m p l i s h th© r e s u l t s t h a t w e re hoped f o r *

T h is w as due t o t h e f a c t t h a t t h e m ethod

was n o t em ployed on a l a r g e eno u gh s c a l e t o make a s a t i s f a c ­ to ry t e s t .

When t h e o p e r a t o r s c o o p e r a t e d on a r e p r e s s u r i n g

p ro g ra m e x c e l l e n t r e s u l t s w ere o b t a i n e d .

T h is was d i s c o v e r e d

i n c o n n e c t i o n w i t h some o f th e g a s i n j e c t i o n p ro g ra m s w h ic h have been a d o p ted r e c e n t l y .

I t i s now d e f i n i t e l y e s t a b l i s h e d

th a t re p r e s s u r in g does r e s u l t in a g r e a te r p r o d u c tiv ity .

The

f o l l o w i n g s t a t e m e n t o f Mr. Brown i s t o t h e p o i n t 4 The r e s u l t s a c c o m p l is h e d b y t h i s i n j e c t i o n are th e p h y s i ­ c a l s t o r a g e o f g a s t h a t would o t h e r w i s e be l o s t and t h e r e ­ p r e s s u r i n g o f o i l s a n d s from vfoieh t h e o r i g i n a l gas had b e e n d ra w n , w i t h t h e c o n s e q u e n t i n c r e a s e d o i l p r o d u c t i o n from s u c h sands. I t i s n o t f e a s i b l e to t h u s r e - p r e s s u r e a l l f i e l d s due t o t h e f a c t t h a t i n some o a s e s t h e m e c h a n i c a l c o n d i t i o n o f th e w e l l s w i l l n o t p e r m i t i t an d t h e u n d e r g r o u n d s t r u c t u r e s a r e n o t a lw a y s tig h t. H ow ever, i n C a l i f o r n i a we a r e f o r t u n a t e i n h a v in g a num­ b e r o f f i e l j d s i n w h ic h i n j e c t i o n i s n o t o n ly f e a s i b l e , b u t a d ­ v an tag eo u s. 1

C. C. Brown, n a t u r a l Gas i n C a l i f o r n i a ( M a n u s c r ip t) , 1 0 .

47 T here a r e

a number o f o t h e r ways o f p r e v e n t i n g th e

p h y s i c a l w a s t e o f p e t r o l e u m by im p ro v e m e n ts i n m e th o d , b u t t h e s e a r e p ro b le m s f o r the e n g i n e e r , a n d th e r e s e a r c h and e x p te r im e n ta l a c t i v i t i e s a r e m aking e x c e l l e n t p r o g r e s s *

A few

w o rd s m ig h t be s a i d r e g a r d i n g t h e a c t i v i t i e s o f C a l i f o r n i a s c h o o l s i n f u r t h e r i n g r e s e a r c h u n d e r t h e d i r e c t i o n o f th e A m eric an P e t r o l e u m I n s t i t u t e *

P u r in g th e p r e s e n t p e r i o d ,

e n d in g June 3 0 , 1 93 0 , t h e A m erican P e t r o l e u m I n s t i t u t e i s f o s t e r i n g and f i n a n c i n g t h i r t y r e s e a r c h p r o j e c t s i n p e t r o l ­ eum.

Of t h e s e t h i r t y p r o j e c t s , e l e v e n a r e b e i n g c o n d u c t e d

i n C a l i f o r n i a , b ein g d i s t r i b u t e d a s f o llo w s ;

seven a t th e

C a l i f o r n i a I n s t i t u t e o f T e c h n o lo g y , t h r e e a t Icelan d S t a n f o r d J u n i o r U n i v e r s i t y , an d one a t t h e U n i v e r s i t y o f C a l i f o r n i a i n c o n n e c t i o n w i t h the U n i v e r s i t y o f Oklahoma and t h e U n i v e r ­ s i t y o f T exas*

I n r e g a r d to t h e im provem ent i n m e th o d s w h ic h

h a s b e e n a c c o m p l i s h e d , i t i s i n o r d e r t o p o i n t o u t one o f t h e o u t s t a n d i n g d e v e lo p m e n ts w hich h a s g r e a t l y f u r t h e r e d c o n s e r ­ v a tio n .

T h is i s t h e © ra c k in g p r o c e s s f o r th e p r o d u c t i o n o f

g a s o l i n e , w h ic h h a s made p o s s i b l e a tre m e n d o u s i n c r e a s e i n t h e p r o d u c t i o n o f g a s o l i n e from a g i v e n q u a n t i t y o f c r u d e o il. I n r e g a r d t o t h e m eth o d s o f c o n s e r v a t i o n , i t

i s in order

to p o in t out th e d i f f i c u l t i e s in v o lv e d in th e s to r a g e o f g a s and o i l .

I n e i t h e r c a s e t h e c o s t o f s t o r a g e i s g r e a t and m u st

e v e n t u a l l y e i t h e r r e s u l t i n a h i g h e r p i i c e o f t h e com m odity t o t h e co n su m er o r c o n s t i t u t e a l o s s t o th e i n d u s t r y .

Mr. L.

48 P . S t . C l a i r , E x e c u t i v e V i e e - P r e s i d e n t o f t h e U nion O il Com­ p a n y and one o f t h e f o r e m o s t c o n s e r v a t i o n l e a d e r s i n t h e c o u n t r y , i n a n a d d r e s s a t t h e p u b l i c m e e tin g o f b u s i n e s s men and o i l company r e p r e s e n t a t i v e s w h ic h w as h e l d a t L o s A n g e le s on F e b r u a r y 1 4 , 1930 s t a t e d t h a t i t was c o s t i n g th e p e t r o l e u m i n d u s t r y t h i r t y m i l l i o n d o l l a r s p e r y e a r to c a r r y t h e 1 8 4 ,0 0 0 ,0 0 0 b a r r e l s o f p e t r o l e u m p r o d u c t s w h ic h w e re th e n b e i n g h e ld i n s t o r a g e . '* ’ The c o s t o f s t o r i n g g a s above g r o u n d i s e v e n g r e a t e r . Mr. B r id g e g i v e s t h e f o l l o w i n g f i g u r e s t o i n d i c a t e th e c o s t o f gas sto ra g e : COST OP GAS AMD O i l STOKAGE2 Commodity

Volume U n it

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B a tio o f S to ra g e C ost t o V alue o f Commodity 750 0 .2 9

I t i s t h e r e f o r e e v i d e n t t h a t c o n s e r v a t i o n m u st t a k e p l a c e i n some o f th e ways e n u m e r a te d , f o r i m m e d ia te l y a f t e r t h e g a s or o i l comes t o t h e s u r f a c e a c o s t i t e m d u e t o s t o r a g e m u st b e a d d e d . A n o th e r m ethod o f c o n s e r v a t i o n h a s r e c e n t l y r e c e i v e d 1 2

B rad M i l l s , " C a l i f o r n i a O i l L e a d e r s t a k e P u b l i c i n t o Con­ f i d e n c e " , The O il W e e k ly , F e b r u a r y 2 1 , 1 9 3 0 , V o l. 56, Ho. 1 0 , - p . 28. A. F . B r i d g e , V a r i a b l e s o f n a t u r a l Gras P r o d u c t i o n and U t i l i z a t i o n i n C a l i f o r n i a ( M a n u s c r i p t ) , 6.

49 c o n sid e ra b le a tte n tio n *

T h is i s t h e u n i t p l a n o f d e v e lo p m e n t

w h ic h i s d i r e c t e d to w a r d t h e c o n s e r v a t i o n o f o i l , b u t ifihich w ould a l s o r e s u l t i n th e c o n s e r v a t i o n o f n a t u r a l g a s .

The

u n i t p l a n d i f f e r s fro m th© p l a n s p r e v i o u s l y c o n s i d e r e d i n t h a t i t i s a p r e v e n t i v e r a t h e r th a n a c o r r e c t i v e m e a s u r e .

The

u n i t p l a n w ould p r e v e n t o v e r p r o d u c t i o n b y o r d e r l y d e v e lo p m e n t, r a t h e r t h a n c o r r e c t o v e r p r o d u c t i o n by p ro r a t i o n .

The u n i t

p l a n was f i r s t a d v o c a t e d by Mr. H enry S. D o h e r ty a number o f y e a rs ago, but i t re c e iv e d l i t t l e

a t t e n t i o n a t t h a t tim e due

t o t h e f a c t t h a t o v e r p r o d u e t i o n h ad n o t t h e n t a k e n on a s e r ­ io u s asp ect*

W ith t h e p r e s e n t c o n s t a n t d a n g e r o f o v e r p r o d u c ­

t i o n th e u n i t p l a n h a s a g a i n come t o a t t e n t i o n .

A ty p ic a l

u n i t o p e r a t i o n p ro g ra m i s w e l l d e s c r i b e d i n t h e f o l l o w i n g w o rd s o f Mr. B o b e r t E . A l l e n , A s s i s t a n t t o H. P . Grimm, th e Umpire f o r S a n t a Fe S p r i n g s , Elw ood, an d V e n tu r a Avenue f i e l d s : I t i s s u g g e s t e d t h a t p r i o r t o th e d r i l l i n g o f a w i l d ­ c a t on a b l o c k o f a c r e a g e c o v e r i n g t h e e n t i r e p r o s p e c t i v e a r e a a d e f i n i t e v a lu e be a r b i t r a r i l y p l a c e d on th e a r e a and t h a t t h i s amount o f s t o c k be d i s t r i b u t e d p r o r a t a among a l l t h e in te r e s ts c o n trib u tin g acreag e. The s t o c k d i s t r i b u t e d i n p a y ­ m ent f o r i n d i v i d u a l l e a s e s s h o u l d be e q u i t a b l y d i s t r i b u t e d , p r o b a b l y f i f t y - f i f t y , b e tw e e n l e s s o r and l e s s e e . Then a f t e r p o o l i n g a l l o f the l a n d and i s s u i n g s t o c k i n p aym ent t h e r e f o r e , a n o t h e r i s s u e o f ©took somewhat more t h a n s u f f i c i e n t t o f i n a n c e t h e f i r s t w e l l w ould b e made; t h i s i s s u e t o b e p r o r a t e d among and p a i d f o r by th e o p e r a t o r - c o n t r i b u t o r s t o th e p o o l . A f t e r t h e c o m p le tio n o f a w e l l a bonus d i s t r i b u t i o n o f s t o c k b a s e d on a r e v a l u a t i o n o f c o n t i g u o u s l a n d s m ig h t be made, and l a t e r , o n , a f t e r p r o v i n g th e a c t u a l e x ­ t e n t o f t h e f i e l d , s t i l l a n o t h e r b on us d i s t r i b u t i o n m ig h t b e made t o t h o s e c o n t r i b u t o r s d e s e r v i n g i t . I n t h e m eantim e t h e d e v e lo p m e n t o f t h e f i e l d m ig h t be f i n a n c e d by t h e p r o r a t a s a l e o f th e n e c e ss a ry s to c k to th e o p e r a t o r - c o n t r i b u t o r s . Under s u c h a p l a n , s e v e r a l e s t a b l i s h e d p u r c h a s i n g and m a r k e tin g c o m p a n ie s m ig h t b e r e p r e s e n t e d i n s u c h a n o p e r a t i n g p o o l and e a c h w ould p r o b a b l y w a n t t o b u y i t s s h a r e o f t h e p r o -

50

duction* T h is e o u l d be e q u i t a b l y a r r a n g e d so t h a t t h e o i l f r o m the f i e l d c o u l d be s o l d r a t a b l y t o tho.se c o m p a n ie s d e ­ s i r i n g i t and e n t i t l e d t o i t * E verything c o n s id e re d , i t i s b e l i e v e d t h a t t h e o p e r a t i o n o f a n o i l f i e l d by a c o m p o s i t e c o r p o r a t i o n i n c l u d i n g a l l l a n d - o w n e r and o p e r a t o r i n t e r e s t s o f f e r s t h e m o st f e a s i b l e method o f c o o p e r a t i v e c o n t r o l . Mr. A l l e n b r i e f l y su m m arize s t h e a d v a n t a g e s o f t h e u n i t p l a n as f o l l o w s : 1.

2.

3.

*

U n i t o p e r a t i o n o f s i n g l e f i e l d s w i l l r e s u l t i n more e f f i c i e n t and o r d e r l y d e v e l o p m e n t an d l o w e r p r o d u c t i o n c o s t s th r o u g h th e absence o f w a s t e f u l c o m p e titio n , n e e d l e s s p r o d u c t i o n and d u p l i c a t i o n o f e f f o r t . The u n i f o r m p r o d u c t i o n r e s u l t i n g f r o m u n i t d e v e l o p m e n t w i l l t e n d t o s t a b i l i z e t h e p r i c e s t r u c t u r e by c o n s t a n t l y b a l a n c i n g s u p p l y a g a i n s t demand, t h e r e b y a v o i d i n g t h e lo s s e s th a t a tte n d a l l f lu c tu a tio n s of the b alance. U nit o p e r a tio n of f i e l d s w i l l le a d to c o o p e ra tio n be­ tw e e n f i e l d s , t h e r e b y t e n d i n g t o p r e v e n t one f i e l d from p r e j u d i c i n g t h e i n t e r e s t o f o t h e r f i e l d s a s i s now so o f t e n t h e c a s e . *

To t h e s e a d v a n t a g e s m ig h t w e l l b e a d d e d t h e f u r t h e r a d v a n t a g e , a tr e m e n d o u s r e d u c t i o n i n a b o v e - g r o u n d s t o r a g e f a c i l i t i e s . The n e c e s s i t y o f b u i l d i n g a d e q u a t e s t o r a g e

f e ,c i l i t i e s to p ro ­

vide f o r p e r io d s o f g r e a t o v erp ro d u ctio n i s p o in te d out as one o f t h e f a c t o r s r e s p o n s i b l e f o r t h e p r e s e n t (economic j e o p a r d y of th e petroleum in d u s try . C a p ta in J . F. Lueey i n a r e c e n t a d d r e s s b e f o r e th e D a lla s P etro leu m G e o lo g is ts , l i s t e d the fo llo w in g advantages t o be d e r i v e d from t h e u n i t p l a n and c o o p e r a t i v e m e a s u r e s : Lower c o s t o f p r o d u c t i o n t h r o u g h s a v i n g s in pipe l i n e , investm ent, s to ra g e ta n k s, and w a t e r d e v e l o p m e n t . G reater u ltim a te y ie ld . C onservation of gas. 1 2

R o b e r t E. A l l e n , " F i r s t S t e p s Toward U n i t O p e r a t i o n o f O i l F i e l d s 11, O i l B u l l e t i n , F e b r u a r y , 1 9 3 0 , V ol. XVI, Do. 2, p . 127. ~ I b i d . , 126.

51 Produce o i l as needed. P ro p e r sp a cin g of w ells# L e s s e v a p o r a t i o n "because o f f e w e r storage tan k s. R o y a l t y ow ners w i l l r e c e i v e a g r e a t e r r e t u r n on t h e i r i n v e s t m e n t , a l t h o u g h t h e im m e d ia te r e t u r n s w ould n o t be as g r e a t as in the c o m p etitiv e p la n . S t a n d a r d i z e on m a c h i n e r y an d e q u i p m e n t . R i g s c a n be c o n s t r u c t e d and s k i d d e d , w i t h o u t t e a r i n g down a n d r i g g i n g u p . O p p o s i t i o n t o the u n i t p l a n comes f ro m t h r e e g r o u p s o f in te re ste d p arties*

The l a n d - o w n e r o r l e s s o r o p p o s e s s u c h

a p l a n b e c a u s e he i s g e n e r a l l y i n t e r e s t e d i n o b t a i n i n g t h e g r e a t e s t r e t u r n i n the s h o r t e s t p o s s i b l e t im e .

The s m a l l

o p e r a t o r , a n x i o u s t o make a " s t r i k e " , o p p o s e s t h e u n i t p l a n , s t a t i n g th a t h is chances fo r la rg e p r o f i t s a re l e s s under t h e u n i t p l a n t h a n t h e y would be u n d e r u n r e s t r i c t e d d e v e l o p ­ m e n t.

The t h i r d g r o u p c o n s i s t s o f the o i l w o r k e r s who b e ­

l i e v e t h a t t h e u n i t p l a n w i l l d e c r e a s e employment and r e n d e r l i v i n g c o n d i t i o n s more d i f f i c u l t . T here i s a g r e a t d e a l t o b e s a i d t o s u b s t a n t i a t e t h e c l a i m s o f t h e s e t h r e e g r o u p s an d t h e y m u st t h e r e f o r e be c o n ­ s id e re d in th e adoption of a u n it p la n .

I t i s ag ain a case o f

some i n j u r y t o i n d i v i d u a l s i n o r d e r to a c c o m p l i s h a b e n e f i t for

the s o c i a l g r o u p , t h e i n d u s t r y , t h e s t a t e , a n d t h e n a t i o n .

Mr. 1# B# R e e s e r , P r e s i d e n t of t h e A m e r ic a n P e t r o l e u m I n s t i t u t e , h a s b e e n u r g i n g some f o rm o f o r g a n i z a t i o n which w i l l b r i n g a b o u t c o n s e r v a t i o n , w h i l e t h e I n s t i t u t e a s a body b a s gone 1

C a p t a i n J . S1. L u e e y , " U n i t i z a t i o n 1 means C o - o p e r a t i o n " , The O i l Weekly, F e b r u a r y 7, 19 3 0 , V o l . 56, No. 8, p . £2.

52 on r e c o r d a s f a v o r i n g t h e a d o p t i o n o f a u n i t p l a n w h e n e v e r feasib le*

At t h e p r e s e n t t i m e t h e A* I . M* E. i s m ak ing a

com prehensive s tu d y of th e u n i t p l a n .

I t has been used ad­

v a n t a g e o u s l y i n P e n n s y l v a n i a and i n West V i r g i n i a , and i n more r e o e n t y e a r s i n Oklahoma, i n c o n n e c t i o n w i t h r e p r e s s u r ­ i n g ; t h e r e seems l i t t l e

r e a s o n Thy i t s h o u l d n o t w ork a s

s u c c e s s f u l l y i n t h e e n t i r e d e v e lo p m e n t o f a g a s and o i l r e g i o n . The p l a n i s r e c e i v i n g s e r i o u s c o n s i d e r a t i o n i n t h e Mid-Cont i n e n t and O u l f f i e l d s , and c o n s e r v a t i o n l e a d e r s i n C a l i f o r ­ n i a a r e l i k e w i s e g i v i n g i t s e r i o u s c o n s i d e r a t i o n , many o f them h o p i n g t o a d o p t i t e n t i r e l y o r w i t h m o d i f i c a t i o n s a s t h e b e s t method o f c o n s e r v a t i o n . o f the p l a n ,

Mr. D o h e r t y , th e o r i g i n a t o r

is ag a in a g i t a t i n g fo r i t s adoption.

In re g a rd to

the u t i l i z a t i o n o f p e t r o l e u m t h e r e a r e

l i k e w i s e a number o f m e th o d s w h e r e b y t h i s r e s o u r c e may be conserved.

However, a t t h e p r e s e n t t i m e t h e s e a r e n o t o f t h e

im p o rtan ce o f the p r e v io u s m ethods, f o r c o n s e r v a t i o n i n p r o ­ d u c t i o n i s more e s s e n t i a l ,

n e v e r t h e l e s s , t h e o b l i g a t i o n to

c o n s e r v e f a l l s upon t h e c o n s u m e r a s w e l l as upon t h e p r o d u c e r , and i n o r d e r t o b e e f f e c t i v e i t m ust a l s o th e consumer.

be p r a c t i c e d by

Such m e th o d s a r e t h e r e f o r e w o r t h y o f some

atten tio n* I n t h e p a s t a l a r g e amount o f c r u d e o i l h a s b ee n b u r n e d u n d e r b o i l e r s when o t h e r f u e l f i , e s p e c i a l l y n a t u r a l g a s , w ould have b e e n more e c o n o m i c a l .

T h is h a s t a k e n p l a c e t o a l a r g e

e x t e n t w i t h i n 1he p e t r o l e u m i n d u s t r y i t s e l f .

I t would h a v e

53

been b e t t e r to b u rn th e

s u r p l u s g a s r a t h e r t h a n p e r m i t i t to

go t o i s a s t e by b e i n g blow n i n t o

the a i r * t h e r e b y a l l o w i n g t h e

u t i l i z a t i o n of t h e c r u d e o i l f o r o t h e r p u r p o s e s .

At t h e

p r e s e n t tim e t h e o p e r a t o r s are i n c l i n e d t o u s e n a t u r a l g a s i n s t e a d o f o i l , a n d h e n c e t h i s method o f c o n s e r v a t i o n i s b e i n g p racticed . A g r e a t d e a l o f c o n s e r v a t i o n may b e e f f e c t e d by the u s e o f econom ical e n g in e s .

The o u t s t a n d i n g e n g i n e s o f t h i s k i n d

a r e t h e D i e s e l s and t h e s e m i - D i e s e l s . i n s u c c e s s f u l u s e i n pow er p l a n t s ,

Such e n g i n e s a r e now

i n l o c o m o t i v e s , and i n

ships* w h ile w i th i n th e p e tro le u m i n d u s t r y th e y a re being used i n d r i l l i n g o i l w e l l s and i n m o st o f t h e pumping s t a t i o n s along petroleum p ip e l i n e s .

E xperim ents a re a t p r e s e n t being

c o n d u c t e d upon D i e s e l s s u i t a b l e

f o r a u t o m o b i l e s and a i r p l a n e s .

Of a l l f o r m s o f e n g i n e t h e D i e s e l seems t o h av e t h e g r e a t e s t f u t u r e a s a s u c c e s s f u l an d e c o n o m i c a l t y p e o f e n g i n e . A n o t h e r tr e m e n d o u s l o s s i s b e i n g o c c a s i o n e d b e c a u s e o f im proper c a r b u r e t i o n .

By m e a s u r i n g and a n a l y z i n g t h e e x h a u s t

g a s e s fro m a u t o m o b i l e s i t h a s b e e n e s t i m a t e d fro m a number o f t e s t s by t h e U n i t e d S t a t e s B u rea u o f Mines t h a t t h e a v e r a g e m o t o r c a r w a s t e s a p p r o x i m a t e l y 30$ o f t h e h e a t v a l u e o f t h e f u e l a s a r e s u l t of i n c o m p l e t e c o m b u s t i o n p r o d u c t s . " 1"

G asoline

economy c a n be a f f e c t e d n o t o n l y by means o f more e f f i c i e n t c a r b u r e t i o n , b u t a l s o by t h e u s e o f e n g i n e s w h i c h c o n s e r v e f u e l and b y t h e u s e o f t h e s m a l l , l i g h t t y p e o f c a r . 1

P e t r o l e u m F a c t s and E i g u r e s ( E i r s t E d i t i o n ) ,

2 00.

54

Th© u t i l i z a t i o n o f o i l s h a l e s h a s f r e q u e n t l y b e e n c o n ­ s i d e r e d a s a means o f c o n s e r v i n g t h e p e t r o l e u m r e s o u r c e s # C a l i f o r n i a h a s a c o n s i d e r a b l e amount o f o i l s h a l e s , b u t t h e s e h a v e n e v e r b e e n s e r i o u s l y ^developed. p roduction of o il

As a m a t t e r o f f a c t ,

the

from s h a l e s i s i m p r a c t i c a l w i t h t h e p r e s e n t -

p r i c e of p e t r o l e u m .

The g r e a t e s t o b s t a c l e t o t h e d e v e lo p m e n t

o f an o i l s h a l e i n d u s t r y i s i t s t r e m e n d o u s c o s t . d e v e lo p m e n t o f a huge m i n i n g i n d u s t r y ,

I t means t h e

com parable t o th e c o a l

m in i n g i n d u s t r y , w i t h a l a r g e c a p i t a l i n v e s t m e n t f o r e q u i p m e n t . I t w o u ld i n v o l v e a l a b o r i t e m much l a r g e r t h a n i s now i n v o l v e d in the p r o d u c tio n o f p e tro le u m .

At t h e p r e s e n t t i m e , t h e o i l

s h a le s o l u t i o n i s n o t b e in g s e r i o u s l y (considered. A g r e a t v a r i e t y o f s u b s t i t u t e s f o r p e t r o l e u m have b een

v

s u g g e s t e d from time t o

tim e.

Among t h e s e a r e t h e v a r i o u s s y n ­

th e tic g a s o lin e s , kerosene, alcohol f u e ls , c o a l, e l e c t r i c power.

and h y d r o ­

B e c a u s e o f t h e l a r g e demand f o r g a s o l i n e a t

t h e p r e s e n t t i m e and th e h i g h e r c o s t o f s y n t h e t i c g a s o l i n e s , i t i s u n li k e l y t h a t th e l a t t e r can rep la ce the m o to r f u e l .

fo rm e r a s a

K e r o s e n e i s a good f u e l f o x some t y p e s o f e n g i n e ,

e s p e c i a l l y t h e s t a t i o n e r y e n g i n e , and i t i s b e i n g u t i l i z e d t o a large e x te n t.

However, k e r o s e n e c a n n e v e r be s u b s t i t u t e d

fox g a s o lin e , f o r i t

i s a d i f f e r e n t k i n d of f u e l , and f u r t h e r ­

more i t i s m e r e l y a p a r t i a l s u b s t i t u t e , f o r i t o f petroleum *

is a product

A l c o h o l f u e l s were u s e d t o some e x t e n t i n a

number o f c o u n t r i e s d u r i n g the World War a s a . r e s u l t o f t h e p .e tro le u m s c a r c i t y .

The w i d e u s e o f a l c o h o l i s i m p r a c t i c a l

55 b e c a u s e o f t h e tr e m e n d o u s a r e a r e q u i r e d f o r i t s p r o d u c t i o n and b e c a u s e o f t h e l a r g e r l a b o r c o s t w h ic h would b e r e q u i r e d . Hence t h e s e s u b s t i t u t e s can be u t i l i z e d o n l y t o a v e r y l i m i t e d ex ten t.

Coal i s a p o o r s u b s t i t u t e s o f a r a s C a l i f o r n i a i s

concerned because o f the v e r y l i m i t e d d e p o s i t s of c o a l i n th e sta te.

On t h e o t h e r h a n d , t h e w a t e r p o w er f a c i l i t i e s o f

S o u t h e r n C a l i f o r n i a a r e more f a v o r a b l e .

A c o n s i d e r a b l e amount

o f c o n s e r v a tio n i s p o s s i b l e by the s u b s t i t u t i o n of h y d ro ­ e l e c t r i c p o w er when t h i s i s p o s s i b l e . On th e whole t h e s u g g e s t e d s u b s t i t u t e s #a r e o f l i t t l e im portance a t th e p r e s e n t tim e. lim ited ,

QJheir c o n s e r v a t i o n v a l u e i s

a l t h o u g h t h e y w i l l become o f g r e a t e r i m p o r t a n c e i f a

f u t u r e i n c r e a s e i n t h e p r i c e o f p e t r o l earn malsss t h e i r d e v e l o p ­ ment e c o n o m i c a l l y p o s s i b l e . As h a s b e e n n o t e d , c o n s e r v a t i o n a t p r e s e n t i s b e i n g d i ­ r e c t e d tow ard t h e e l i m i n a t i o n of th e w a s te s o f p r o d u c tio n . A c c o r d i n g l y t h e g r e a t e s t p r o g r e s s i n . c o n s e r v a t i o n i s now b e i n g made i n t h i s f i e l d .

!Fhis p r o g r e s s i s m a n i f e s t e d by t h e p a s s a g e

o f t h e Gas C o n s e r v a t i o n Law o f 1929 and by t h e v a r i o u s c o o p e r a ­ t i v e p r o g ra m s w h ic h have b e e n a d o p t e d r e c e n t l y . be t a k e n up i n g r e a t e r d e t a i l .

Ihese w ill

CHAPTER VI THE LEGAL ASPECTS OP CONSERVATION

As h a s b e e n n o t e d , a n a t t i t u d e o f c o n s e r v a t i o n so f a r a s p e t r o l e u m and n a t u r a l g a s a r e c o n c e r n e d was v e r y slow i n developing.

However, b y t h e y e a r 1928 c o n s e r v a t i o n was r e ­

ceiv in g g r e a te r a t te n t i o n th an ever b e fo re .

The a t t e m p t s a t

c o n s e r v a t i o n which had b e e n made had b e e n e f f e c t i v e t o a l i m i t e d e x t e n t , b u t i t was a p p a r e n t t h a t a more f a r r e a c h i n g p r o g r a m w as n e c e s s a r y .

O verproduction not only c o n tin u ed

b u t even i n c r e a s e d , a s i n d i c a t e d by th e c o n t i n u a l i n c r e a s e in th e sto c k s of crude o i l h eld in s to r a g e . D uring the p a s t t h r e e or f o u r y e a rs p l a n s whereby e f f e c t i v e c o n s e r v a t i o n c o u l d b e . a c c o m p l i s h e d w ere made by the l a r g e r p r o d u c e r s , b u t such p la n s f a i l e d to m a t e r i a l i z e due t o

the o p p o s i t i o n o f t h e s m a l l e r p r o d u c e r s who r e f u s e d

to e n t e r i n t o s u c h a g r e e m e n t s on t h e g r o u n d s t h a t c u r t a i l m