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 on the global fuel problem, discussing petrol consumption, world supply figures, market dynamics, and pricing.
| Identifier | ExFiles\Box 32\1\ Scan019 | |
| Date | 15th March 1913 | |
| R.R. 235A 'AUTO' MOTOR JOURNAL MARCH 15, 1913. R1555 SYNTHETIC PETROL. THE SOLUTION OF THE FUEL PROBLEM.—II. FACTS AND FIGURES OF THE WORLD'S SUPPLY. The consumption of petrol in England during the past eight years has more than quadrupled. In 1905 the consumption was 18 million gallons, last year it was 80 millions. The intervening annual amounts were as follows: 25, 34, 40, 53, 55 and 70 millions. From 1911 to 1912 the increase was 10 million gallons. If the increase continues at this rate it is self-evident that the competition for supplies must inevitably become so acute as to make the price prohibitive unless new sources of petrol are developed with corresponding rapidity. Professor Vivian Lewes, who has for several years voiced a warning of the danger of a shortage in the liquid fuel supply, said at his recent Cantor Lectures : “I doubt personally if in fifty years’ time it (oil) will be obtainable at a price that will enable us to use it commercially.” According to the same authority, the world's output of petroleum is now nearing 50 million tons per annum, which is made up as follows :— United States .. 63'09 per cent. Mexico .. .. 1'02 per cent. Russia .. .. 21'48 " " Japan .. .. '59 " " Galicia .. .. 3'87 " " Peru .. .. '40 " " Dutch E.{Mr Elliott - Chief Engineer} Indies 3'37 " " Germany .. .. '32 " " Roumania .. 2'97 " " Canada .. .. '10 " " India .. .. 1'87 " " Other sources .. '02 " " Corresponding figures given in the Petroleum Review for January 25th, 1913, are as follows :— 1912. 1911. United States ... 220,000,000 barrels 220,400,000 barrels Russia ... ... 63,000,000 " 62,000,000 " Roumania ... 12,500,000 " 10,800,000 " Galicia ... ... 8,000,000 " 9,000,000 " Netherlands, India 13,000,000 " 11,600,000 " British India ... 7,500,000 " 7,200,000 " Mexico ... ... 16,000,000 " 9,500,000 " Other countries 10,000,000 " 7,000,000 " Totals ... ... 350,000,000 " 337,500,000 " (N.B.—7 barrels = 1 ton approx.) A study of such a table conveys little or nothing to the English motorist, however, for it in no sense indicates the relative importance of these different sources so far as his supply of petrol is concerned. Thus, of the above total, about 1 1/4 million tons of petroleum products of all sorts reached the United Kingdom from the following sources :— United States ... 980,000 tons Russia ... ... 120,000 tons Dutch E.{Mr Elliott - Chief Engineer} Indies 160,000 " Other countries 96,000 " Roumania ... 144,000 " Now compare this table with the following particulars of the sources of England’s supply of petrol, which we also quote from Professor Lewes’ Cantor Lectures :— Dutch E.{Mr Elliott - Chief Engineer} Indies 40 million gals. Russia ... ... 5 million gals. America ... ... 16 " " Roumania ... 4 " " Holland ... ... 6 " " Other countries 9 " " Holland, Russia and Roumania, it will be observed, lie on the eastern route, and most of the spirit that they contribute may for present purposes be regarded as “Shell,” for the transport is mainly in the hands of this company. Carbine and Movril, for example, comes from the east; Mex, however, is a product of Mexico, but the transport facilities from that country are as yet comparatively undeveloped. In the future, it is possible that the products of the Mexican fields may greatly influence the world's markets; so likewise may those of Trinidad. When the Panama Canal is opened the Californian fields will presumably find an outlet by water, which should materially affect their contribution to the world's supplies. The relative importance of these fields lies, of course, primarily in the fact that they are already known and have already interested the capitalist, but their basic significance as new sources of liquid fuel rests, it is evident from what has already been said, on the rate at which the demand for petrol is out-stepping the supply. In dealing with a subject so vast as this, it is impossible to prove anything by figures, but although it has often been affirmed that the present rise in price is merely the result of a “corner,” evidence is not wanting to show that what in principle amounts to a shortage of supplies is really at the bottom of it. Dealing with the current position in the February issue of the Petroleum World, the Editor, Mr. J.{Mr Johnson W.M.} T. Smith writes as follows :— The stocks of the high-grade crude oil in the United States, of which Pennsylvania holds so large a part, dropped at the rate of a million barrels a month. This indicates that, in order to obtain the lighter products, and notably petrol, the above-ground stocks are being depleted at an alarming rate. The position in the Dutch East Indies is in its way just as serious. Every one knows that this country and the Pennsylvania and other high grade divisions of the United States fields are the world's two main sources of petrol; yet we have the Far Eastern fields showing the serious decline of over 195,000 tons, or approaching 12 per cent. Of course the higher prices got for products, and particularly for petrol, have amply compensated the principal producers, the Royal Dutch and Shell groups, for the falling off in the production, but for the world at large which wants immensely more petroleum rather than less, the position is an unsatisfactory one. Again, in the Oil News for January 25th there is the following well-expressed comment :— Concerning price we have few words to say; but they are important. There is a certain part of the increase of prices of oil products which is due solely to the increase in the cost of raw material, i.e., crude oil. There is a further portion of the increase due to rise in freights. And there is a third and final part due to restricted supply and expanded demand. On the first cause no one can make any impression. The second cause enables marketeers of oil products who are at the same time owners of tank steamers to reap the benefit of such ownership, which is denied to other marketers who have to move their oil in vessels belonging to someone else. The third cause is a matter of grave consideration. Intelligent persons who have studied the subject know beyond a doubt that in the British Islands there is not enough of certain petroleum products to meet the demand. Most people are aware of the petrol shortage, for example. This is one of the products the rise in the price of which is due to all the three causes just mentioned. The absolutely controllable portion of the rise in the price of this article in the British Islands is that concerned with the demand of the consumer. Inside opinion is also worth while hearing when it comes from anyone of the standing of Mr. Libby, one of the heads of the Standard Oil business, who is thus quoted in the Petroleum Review for February 8th of this year :— The remarkable increase in the cost of living has been for several years a subject of serious economic and public unrest. It has been especially noticeable that until 1912 petroleum and its products did not participate in the general advance in price applicable to most necessaries of life. The Government tables covering ten years prior to 1911 showed a steady increase in the cost of hundreds of commodities, while oil continued at a low level, and subject only to inconspicuous fluctuations. So clearly was this demonstrated in the defence of the Standard Oil Co. in the Government suits, that neither the Federal trial court nor the Supreme Court of the United States in its findings, allege that the company has acted inequitably as to the prices it establishes. The contention of the Government and the public had been to the contrary. 312 | ||