Page:EB1922 - Volume 32.djvu/95

Rh service between America, Great Britain, France and Italy was American owned, while 49% was British owned. Because of the increased tonnage at the close of the war the United States was exporting each month for war purposes 2,200,000 bar. of fuel oil, 750,000 of motor gasoline, 500,000 of kerosene and 175,000 of aviation naphtha. The country's exports of fuel oil to Great Britain, France and Italy in 1918 represented an increase of 200% over 1914 and 23% over 1917. At the beginning of 1917 the total requirements of petroleum products for all British services reached a figure of about 3,500,000 tons per annum, nearly double pre-war requirements. By the end of 1918 the figure had increased to nearly 5,500,000 tons per annum. It is estimated that the maximum requirements of the Allies if the war had continued would have occurred in the spring of 1919, when 12,000,000 tons per annum (of which some 8,000,000 tons would have been absorbed by Great Britain) would have been required. During the last 18 months of the war the Inter- Allied Council dealt with between 12,000,000 and 13,000,000 tons of oil.

The British army in France used about 23,000 tons of motor spirit a month during the greater part of the war. The French army's monthly consumption of gasoline was 35,000 tons, of which 30,000 tons came from the United States. In Dec. 1917 the Allies had a scant month's supply of gasoline on hand, and between Dec. 25 1917 and Jan. 31 1918 90,000 tons of petroleum products were shipped to France from the United States, making possible the shifting of troops into threatened areas by motor lorries. Oil stocks in France, before the large shipments early in 1918, had gone down to 25,000 tons, less than the average held in France in normal times. During the days of most active fighting consumption reached as much as 2,000 tons a day. The British Ministry of Shipping was mainly responsible for the transporting of overseas supplies, and the Tanker Division of the Emergency Fleet Corps, U.S. Shipping Board, and a section of the War Trade Board had jurisdiction of the allocation of cargoes and of shipping belonging to the United States. The difficulties of getting production were accentuated by various specifications which each Government required as regards its oil supplies, and steps were taken by the Inter-Allied Council to effect some de- gree of standardization. In the United States the Committee of Standardization of Petroleum Specifications was formed to standardize petroleum products, requirements of the various Government departments, and also to recommend adoption by the states of standard specifications.

The war opened the eyes of all countries to the value of petroleum products. The Allied countries and the Central Powers conducted extensive investigations to provide substitutes. In Great Britain the Alcohol Motor Fuel Committee was formed to consider the fields of production of alcohol fuel, and its utilization either alone or in conjunction with fuels such as petrol and benzol. Efforts were successfully made to extract crude oil from cannel coal on a commercial scale at certain large gas works. The use of coal-tar oils as fuel oil was also considerably increased. Alcohol substitutes for petroleum were extensively experimented with in Germany and in the United States. In the latter country important experiments were made with colloidal fuel. The actual work of petroleum development in the British Is. was undertaken as a war measure, and, as already stated, the drilling of wells was started in Derbyshire, Staffordshire and the Midlothian district of Scotland on behalf of the British Government. Another war achievement was the construction of an 8-in. pipe line, 35 m. long, across Scotland from the vicinity of Glasgow to Grangemouth on the Firth of Forth. This pipe line was built so that tank steamers could discharge fuel oil for the Allied navies at Old Kilpatrick, near Glasgow. The pipe line then conveyed the oil to the Firth of Forth, where it was required by the navies. Tanker transporta- tion to the Firth of Forth was very dangerous. The work of building the stations and ditching for the line was conducted by the British Admiralty, and the line laid by a U.S. naval unit. It was completed shortly before the Armistice was signed. The war also probably hastened the building and completion of the British navy's great oil reservoir at Rosyth. This was con-

structed of reinforced concrete, and is capable of storing 60,000,000 imp. gal. of liquid fuel. Concrete work on the first section began in July 1916, was completed in Aug. 1918, and oil was run into the tanks in Sept. 1918. Construction of the second section began in Aug. 1917, and was completed early in 1919.

Certain important producing and potentially productive oil areas changed nationality as a result of the World War, including parts of Galicia, formerly in the Austro-Hungarian Empire, now a part of Poland ; Alsace, now French; Mesopotamia and Pales- tine, lost by Turkey, and placed under British mandate.

Financial and Industrial Progress. The expansion of petro- leum activity has involved a great increase in financial re- quirements. While the tendency has been toward consolida- tion and the perfecting of organizations of great size, there has also been, particularly in the United States, an extraordinary springing up and expansion of companies embracing one or two branches of the business, or often operating in almost every branch. The chief petroleum companies own or lease oil-bearing properties, work their own production, have pipe-line affiliations, own and operate refineries, own and lease tank cars and other marketing equipment, and own and operate tank steamers.

The nationalization of oil-bearing lands the retention or vesting of ownership of subsoil rights in the hands of the State has been a pronounced tendency in certain countries. In Russia petroleum lands were nationalized and were operated in part of 1919 and in 1920 by the Soviet Government. Argentina's petroleum development has been almost entirely in the hands of the Government since its inception. In May 1917 a new Mexican constitution provided for the nationalization of petroleum, and various decrees have been promulgated attempting to carry out the nationalization principle. In other Latin-American countries nationalization of petroleum lands is generally adhered to in working out new petroleum codes. Direct Government interest in petroleum development was brought about in Great Britain by the action of the British Government in becoming a majority shareholder in an oil company developing the Persian fields and active in other countries.

The importance of petroleum with respect to national security and industrial prosperity became generally recognized during the World War and resulted in intense investment and speculative interest in oil companies. Statistics compiled for 250 repre- sentative American oil companies showed capital invested as of Dec. 31 1919 to be $2,501,939,914. Of this group 142 companies were organized after 191 2. The 108 companies in existence prior to 1912 showed a capital investment of $717,098,563 on Dec. 31 1911. The compilation showed that of the total increase in capitalization between 1912 and 1919, amounting to $1,784,841,- 351, $707,004,521 was added in one year, 1919. New oil com- panies formed in the United States in 1917, 1918, 1919 and 1920 represented an amazing capitalization. The records show that in 1920 1,712 companies were organized with an authorized capitalization of $2,787,000,000; in 1919, 1,629 companies with $3,786,000,000 capital; 1918, 820 companies with $1,430,000,000 capital; and in 1917, 512 companies with $840,000,000 capital.

Capital-borrowing by oil companies in the United Kingdom in 1919 totalled 15,852,600; in 1920 13,004,600. The total capital of oil and kindred companies registered in the United Kingdom during 1920 was 33,105,050.

Four companies in Germany, classified under the head of " Petroleum, Mineral Oil, etc.," increased their capital in 1920 101,850,000 marks. There was a boom in the oil business in Rumania in 1919 and 1920. In the former year 128 new companies were organized with a total capitalization of 449,000,000 lei (nominal value g^d. or $.19, but at that time much depreciated). Up to Oct. 1*920 168 companies had been organized with an issued capital of 1,640,206,900 lei.

Well-drilling and Field Improvements. Production is maintained and increased only by the constant drilling of new wells. A territory becomes " proven " after it has been demonstrated by test wells and by active development to have petroleum deposits. The search for oil in unprpven territory is generally termed " wildcatting." The wildcatter is sometimes a small operator but more often in recent years a large company, for the operation entails large expenditure.