Shortages Hold Attention of API Λ STAFF REPORT
JLETROLEI'M shortages in sight within the next year and not necessarily of temporary nature wen» the object of great concern anil discussion at the Twentyseventh Annual Meeting of the American Petroleum Institute in Chicago,, Nov. 10 to 13. T h e problem of remedying the situation through future technological and economic moves was dealt with from many angles, often with an eye to con ditions which would exist in a future war emergency. The effects of aid to Euro pean recovery were debated pro and con. More tlian 4,500 registered for the meeting to hear speakers of authority discuss broad problems and to attend group sessions on production, refining, marketing, lubrication, agriculture, trans portation, taxation, public relations, and military problems. A major step in policy on the part of the API was the approval by its board of directors »f plans to raise $1.85 million for an expanded public relations program in 1948. According to William Boyd, president of API, "representatives of all segments of the industry were impressed by the highly favorable public reaction . . . to the fact-telling program which we started a year ago."
Petroleum—National
Security
Bruce K . Brown, president American Petroleum Corp., vice of Standard Oil Co. (Ind.), and of the Military Petroleum Committee of the Oil and Gas Army-Navy Petroleum Board,
of Pan president chairman Advisory Division, addressed
a general session on "Petroleum and Its Relationship to National Security." "Petroleum is a bulwark of our national security," said Mr. Brown, "and our policy about petroleum supplies—our own and those of other nations—can affect the peace of the whole world. Nothing in present technology gives any encouragement to the hope that another war would not require tremendous sup plies of petroleum, and this regardless of the development of atomic energy, atomic bombs, and rockets. "While we can and will synthesize petroleum from natural gas and coal, the possibility of suddenly and substantially augmenting our supplies of liquid fuels by that route in the middle of a war is very slight indeed. In the event of a war, we shall have to place our main reliance for petroleum supply on reserves we have developed at home and close to home." Pointing out that supplying the? es sential civilian demand for petroleum is becoming a bigger job each year, while at the same time the development of jetpowered planes indicates a tremendously increased consumption of petroleum fuels in case of war, Mr. Brown pictured an appalling demand on petroleum resources and processing facilities. Agreeing that chemically propelled missiles and rockets may partially supplant piloted airplanes, he declared that these would present new hydrocarbon supply problems as the logical raw material source for most of the chemicals is petroleum and the type
Under-Secretary of the Interior Oscar Chapman urges cooperation between government and industry in meeting petroleum shortage problems. William W. Burton,, retired president of Standard Oil Co. {Ind.) is presented Gold Medal jor Distinguished Achievement by API President William Boyd, right
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of equipment needed for manufacture is t ho same general type of equipment needed in refineries and synthetic petroleum plants. Mr. Brown listed as potential petroleum supplies, domestic oil, foreign oil, and oil from new synthetic plants. While it m a y be possible to produce synthetically all of the liquid hydrocarbon fuels needed from natural gas and coal, Mr. Brown de clared that this is sound only if t h e prac tical development occurs over a long period of years and on the basis of present estimates the production of only a mil lion barrels a day, less than one fifth of our current peace time needs, would require an investment of multiple billions of dollars. The synthesis of liquid fuels from coal, he contended, cannot be done as rapidly or a s cheaply. Mr. Brown expressed the opinion t h a t even if the dollars for such development could be coined, the manpower, construction materials, and mining problems would remain. On the basis of such evidence, it was his conclusion that if war comes to us again in our time, wc shall have to rely mainly on petroleum from domestic sources plus supplies available t o us in other friendly countries which we can protect and to which we can maintain sea lanes. In the matter of foreign oil, Mr. Brown considered the unfavorable argument that the steel and equipment required from the United States for the development of Middle East wells would increase the shortage of equipment now demanded for domestic operations. "However," he de clared, "when we look a t t h e same question solely from the standpoint of national security, it appears that fore going the immediate development of ad ditional domestic reserves—evil a s it m a y be—is the lesser of the two evils". H e stated that oil is necessary for t h e sur vival of Europe and until it can draw more from the Middle East, it will have to continue to drain the western hemisphere, those very reserves upon which w e have to place our main reliance. Mr. Brown struck sharply at certain government policies, particularly federal control of tideland areas. B. Brewster Jennings, president of Socony-Vacuum Oil Co., Inc., in dis cussing the international petroleum situa tion, said that it is out of the question for the United States to supply in signifi cant amounts the oil vitally needed for European recovery. "With United States oil production running about a t capacity t o meet local demands, one does not h a v e t o be a pes simist as t o the domestic outlook to suggest that the prompt development of foreign sources of production is a 'must* if world
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NEWS
demand for petroleum is to be satisfied," declared Mr. Jennings. H e forecast a 1950 world consumption of petroleum, exclusive of the United States and Russia, of 3.2 million barrels a day, compared with a 1938 consumption of 1 million and a 1947 consumption which he said will approximate 2.7 million. "Both the eastern and western hemispheres are going t o consume petroleum in rapidly growing quantities and both require that supplies be augmented promptly from new sources a t home and abroad/' declared Mr. Jennings. Industry and government must work together to meet the rising problems of petroleum supply, urged Oscar L. Chapman, Under-Secretary of the Interior. "This winter, for the first time in its peacetime history, the oil industry will be unable t o meet the full petroleum needs of the American people/' stated Mr. Chapman. I n all probability most of our people will be able to get most of the petroleum products they need, he said, but a comparatively small percentage will be unable to fill their minimum requirements. "But even 1% of our population is nearly a million and a half people, and a a million and a half people chilly or out of work for lack of fuel oil even for short periods or u n a b S to harvest their crops for lack of gasoline, will expect remedial action. Rightly or wrongly, many of them will demand that the Government do it or see that it is done. The pressure on the Administration and the Congress to institute some sort of government control, whether allocation or rationing or something else, may not easily be brushed aside." Mr. Chapman specifically stated that he is against mandatory controls as a matter of policy and rested his opposition on the grounds of practicality. He admitted, however, that a controlled program would be the temporary solution in an emergency. He set the first objective as the meeting of suppty requirements for the armed forces and for those essential government services which maintain law and order. Other objectives: listed in order were supplying public utilities, heating homes, providing adequate farm fuel, fueling oil-burning and gasoline-consuming industries and transportation equipment, and supplying in so far as possible the pleasure gasoline which is an essential part of the American recreational pattern. He also added another objective, of different character, but given high importance: the preservation of the independent distributor and refiner. The Government, he said, is concerned with the attainment of these objectives and cannot divorce itself from its proper share of responsibility. He mentioned responsibilities imposed by statute, such as export control, administration of the public domain, and guarding against restraint of trade; responsibilities imposed by the constitution, such as provision for
VOLUME
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JBrcwster Jennings, *nillvor-jour*ialist
president Henry J.
of Socony-Vacuum Oil Co.9 chats with Taylor. Both spoke at API meeting
national defense; and responsibilities for the public welfare. These, he said, the Government cannot and must not shirk and in meeting them they seek and value the counsel and advice of the oil industry. "Without surrender of the rights or obligations of either," he declared, "the oil industry and the Government can work together for the common good to advantage of both and of the public." Bur ton
Honored
F o r developing, with his associates, the first commercially successful cracking process t o make more gasoline out of crude oil and thereby becoming the father of modern petroleum refining technology, William M . Burton, retired former presid e n t of the Standard Oil Co. (Ind.), was awarded the American Petroleum Institute Gold Medal for Distinguished Achievement. I n presenting the award to Dr. Burton, William Boyd said "You developed the first commercially successful cracking process, more than doubling the potential yield of gasoline available from crude oil. T h i s process marked the industry's advance from merely separating and purifying the natural ingredients of petroleum to altering its chemical composition so a s t o produce tailor-made molecules for specific purposes." Fuel
Oil
Problems
A. nine-point program was outlined by J o h n W. Boatwright, Standard Oil Co. (Ind.), for increasing the effectiveness of the petroleum industry in combating " a n y possible deficiency" of product supply. His points, briefly summarized were: ( 1 ) Improvement of net import balstnce. (2) Holding of crude oil production east of the Rockies at maximum efficient rates. (3) Rushing all possible taniker facilities into service for equitable e a s t coast distribution. (4) Use of more
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tank cars to maintain present levels of refinery operations in the Midwest. (5) Increased use of truck transports for .short hauls. (6) Composite effort within the industry to ensure that available supplies arc distributed throughout the country in keeping with anticipated market requirements. (7) Acceptance of responsibilities by competitive fuels in carrying their full portion of the heating load. (8) Recognition by the consumer of his responsibilities. (9) Deferment of production of high octane gasoline until the supply and demand relationship is in balance. "Petroleum Planning for Defense" was the subject of an address b y Maj. Gen. T. B. Larkin, Quartermaster General of the U. S. Army. Technical
Papers
The division of refining held a twosession symposium on evaluation and testing of cracking catalysts, with 14 papers covering specialized sections of that field. The same division devoted a half-day's program to sour crudes. Sessions on drilling and production and on secondary recovery were held by the division of production. Group sessions of less technological interest were sponsored by divisions or committee on agriculture, lubrication, taxation, marketing, transportation, and public relations. An extensive schedule of specialized committee sessions began Nov. 5 and continued throughout the meeting. Officers William R. Boyd, Jr., was re-elected president of the institute, while Robert E. Wilson, Standard Oil Co. (Ind.), B . L. Majeweki, Deep Rock Oil Corp., and Jake L. Hamon, Cox and Hamon, Inc., wqre re-elected vice presidents. W. Alton Jones, Cities Service Co., was elected a new vice president.
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