From the Rolls-Royce experimental archive: a quarter of a million communications from Rolls-Royce, 1906 to 1960's. Documents from the Sir Henry Royce Memorial Foundation (SHRMF).
Article from 'The Autocar' magazine discussing petrol prices in the U.S.A., opposition to increases, and the unlikelihood of an oil famine.
| Identifier | ExFiles\Box 4\5\ 05-page261 | |
| Date | 8th February 1924 | |
| X.430 P.T.O 262 THE AUTOCAR, February 8th, 1924. PETROL PRICES IN THE U.S.A. Considerable Opposition to Increased Fuel Prices. No Possibility of an Oil Famine. FOR some weeks past various announcements concerning oil production in the United States, and the price charged for fuel by the various oil companies, have appeared in our American contemporaries, Automobile Topics and Automotive Industries. There is no doubt, in fact, that considerable opposition has been aroused by recent increases in the price of fuel, and it is frankly realised that there is being waged a “War on Gasoline Prices.” It would appear that during the middle of last year there was a considerable over-production of crude oil from the wells, resulting in the accumulation of vast quantities of petrol which, therefore, made a price reduction not only possible, but essential if stocks were to be kept down. This would appear to be borne out by the fact that in this country reductions in the price of petrol were announced in July and September of last year. Increased Profits. That this over-production did not act very adversely on the oil industry may be gathered from the following figures from Automobile Topics of December 1st, 1923 :— “Despite depression in the oil industries this year, cash dividends paid by the Standard Oil Companies for 1923 have reached a record total of $34,952,379 dollars. The previous highest amount was last year when dividends amounted to $20,639,560 dollars.” In the same issue it was stated that the Vacuum Oil Co. had arranged for the erection of a new refining plant with a capacity of 5,000 barrels of petrol daily, which was to be finished in five months. Also in the same issue were given figures for the week ending November 17th, of the daily average crude oil production of the United States, which totalled 2,225,500 barrels—a decrease of 14,450 barrels. The daily average imports of petroleum at the principal ports was 252,229 barrels, compared with 271,419 barrels for the previous week. More oil production figures were given in the same journal of December 29th, for the week ending December 15th, and showed that 1,943,300 barrels were produced, as compared with 2,066,150 barrels for the previous week. Supply Exceeding Demand. It would thus appear that at the end of 1923 the oil production progressively decreased from week to week. Further evidence of this is contained in a report in the same journal of January 12th last, based on statistics collected by the Bureau of Mines. It was there stated that the production of petrol in November amounted to 617,558,021 gallons, a decrease of 3.15 per cent. from the October rate of production. Imports of petrol were 13,423,864 gallons, a decrease of 33 per cent. from the preceding month’s figures. At the same time, the indicated domestic consumption of petrol during November was 538,388,869 gallons, a decrease from the October rate of 12.85 per cent. Exports were 54,496,383 gallons, which was 57 per cent. below the October figures. The demand, foreign and domestic, was 592,808,192 gallons, a decrease of 15.3 per cent. from the previous month. The supply exceeded the demand by 6.44 per cent. These figures make interesting reading in view of the increase in the price of petrol from 1s. 6½d.{John DeLooze - Company Secretary} to 1s. 11d. per gallon which was announced on Friday last and to which we refer elsewhere in this issue. Also interesting is the American view of the position as revealed in Automotive Industries of January 3rd, in an editorial note, entitled “Unmasking the Oil Famine Bugaboo,” which we quote as follows :— “Only two or three years ago there was a constant and insistent din that an oil famine was creeping constantly closer and closer. We were led to believe that the situation was so serious lubricants should almost be measured out with a medicine dropper, and that, unless some substitute were found for gasoline as a fuel for internal combustion engines, all automobiles soon would stop running. We even were given estimates of how many barrels of oil remained under the earth’s surface. “Now comes along H.{Arthur M. Hanbury - Head Complaints} A.{Mr Adams} Haring in the New York Times Analyst with an article captioned, ‘The Oil Industry Unmasked.’ Mr. Haring certainly is an iconoclast. “‘No human being, no geologist and no statistician can do more than make a wild hazard as to the amount of oil in store within the earth,’ he says. ‘All their calculations of the past have been regularly shot to pieces by the explosive shots at the bottom of thousands of fact of steel pipe which usher in the new “gusher,” each new spa adding to the continual outflow from the existing wells.’” No Impending Oil Famine. “But this isn’t all. Taking as his text the tremendous over-production of 1923, he declares:—‘Despite all the vociferation about impending oil shortage, no shortage has ever occurred. Recurrent periods of over-production have, on the other hand, been characteristic of the industry. It is well to remember that few of our oil fields have dried up. Although they have passed their spectacular and bonanza days; the old fields continue to pump to their pipeline connections, day and night, without cessation. Western Pennsylvania, the original field of 64 years ago, continues to give forth the peculiar odour of flowing wells, and, as a matter of fact, the production in barrels exceeds that of the romantic years of fifty and sixty years ago. “‘The fundamental fact, the underlying condition of the American oil industry is that our wells are capable of production vastly beyond what the country has ever used. Instead of impending oil famine, the United States has ahead of it a continuation of all over-production.’ “‘To all of which iconoclastic views the automotive industry probably will utter a hearty amen. It will not soon forget the way in which the users of its products have been gouged on gasoline while the wail has gone up that we must conserve our oil resources to save the nation’s life in the grim days of war as well as in times of peace.’” That energetic action is taken against high fuel prices may be gathered from Automotive Industries of January 12th, when it was stated that the Governor of South Dakota, “following the announcement of an increase of 2 cents per gallon by the Standard Oil Co., sent a car load of motor fuel to the State station with orders to retail it at 16 cents per gallon, the figure he set last summer when he led the fight against high prices. The Standard Oil price is now 22 cents.” MINIATURE RACING CARS. TWO classes of cars, with engines of respectively 500 and 750 c.c. will be admitted in the French cycle car Grand Prix, to be held at Lyons in conjunction with the European Grand Prix. It is most likely that this event will be held on the afternoon of Wednesday, July 30th, following a motor cycle race in the morning. The limits of 500 c.c. and 750 c.c. have been adopted in conformity with the decision to admit the 1,100 c.c. cycle car for speed events, and for the first time in France there will be a speed contest for three-wheelers having motor cycle-sized engines. The weights for the new classes of cycle cars are 384 lb. for the 500 c.c. machines and 551 lb. for the 750 c.c. racers. 9 | ||