PRESENT CONDITIONS IN THE CALIFORNIA OIL-FIELDS.

837

Present Conditions in the California Oil-Fields.

BY MARK L. REQUA, SAN FRANCISCO, CAL.

(San Francisco Meeting, October. 1911.)

DURING the past two years California has developed a new

and important oil-field: I refer to Midway. This field pro-
duced the famous Lake View gusher, whi.ch is credited with a
total production in excess of 8,000,000 barrels. Fortunately
for the oil industry of the State, this well is now a thing of the
past, and nothing save a great crater-like opening marks its
location. The pipe is entirely worn away and gone; and it is
a matter of serious doubt if there can be anything done that
wiI] cause the well to produce again. Fortunately, also, there
have been no other wells in that field or elsewhere throughout
the State that in any way compared with the Lake View.
Midway is noted for large wells, of from 500 to 2,000 barrels
production; but the decline is rapid, and a few months serve
to bring the output down to a few hundred barrels.
In the oil-territory heretofore blocked out as proved and
probable, there have been, during the year, many changes.
Some areas which were expected to be fairly productive have
apparently failed; others, more strictly "wild-cat," have come
in; while in some of the older fields there are properties which
are beginning to show evident signs of exhaustion. The total
area of proved territory will therefore probably sufter but small
838 PRESE~T CONDITIONS IN THE CALIFORNIA OIL-FIELDS.

increase, when balances are struck off. The increase of new

area has come from extensiolls of the Midway field, the de-
velopment of a field in Lost Hills and Belridge, and exten-
sio11s of the Fullerton-Whittier field in southern California.
In these later developments, down to date, the fresh area abso-
lutely proved is not much in excess of 3,000 acres. Recent
developments in Coalinga indicate the possible extension of
that field to the south, but at great depth. Coalinga is still
the most northerly field of any consequence in the State. The
Kettleman Hills have hitherto brought in nothing, although a
depth exceeding 3,500 ft. has been reached. Much of the terri-
tory proved within the year is extremely deep and expensive
to develop and operate.
This, however, is not true as regards a narrow strip in the
Lost Hills and the proved tract in the Belridge fields, located
respeetively 26 and 12 miles NW. and N. of McKittrick. In
these fields it is claimed that at depths varying from 600 to
1,200 ft., 200- to 500-barrel wells are the rule, producing oil
of 23° gravity and higher. So far as can be foreseen at the
moment, this territory is the most disturbing factor in the
State, as regards the future price of oil. It is yet too early to
predict with accuracy the possibilities of these two fields, and
espeeially of the Belridge territory, but that there is oil un-
derlying the locality at comparatively shallow depths, admits
of no question. Thickness of sand, saturation, area proved,
and sundry other factors necessary to be determined before
any estimate can be made, are as yet not obtainable.
Geologically, the ideas as advanced by the U. S. Geological
Survey 1 must be altered, at least as regards the areas through
the Lost Hills, and in the immediate vicinity thereof.
In the above-cited reports it is declared that the Vaqueros
(Lower Miocene) sands become less saturated as they pass
southward, and, although their depth below the surface may
be calculated in the Kettleman Hills, it is impossible to deter-
mine their depth in the Lost Hills with any degree of accuracy.
The inference is that the oil will be here found in the Vaqueros
(Lower Miocene) sands, as at Coalinga, rather than in the Mc-
Kittrick (Upper Miocene) beds, as in the productive fields of
1 Bulletin No. 357, U. S. Geological Survey, pp. 120 to 124 (1908) ; and No. 406,
pp. 206 to 20\1 (1910).
 PRESENT CONDITIONS IN THE CALIFORNIA OIL-FIELDS. 839

the Midway district and other fields to the south, and in smi:tller
quantities.
As is generally understood, the bulk of the oil of the Coa-'
linga field originates in the organic Tejon (Eocene) shales and
passes upward into the overlying sands chiefly of the Vaqueros
{Lower Miocene) series. In the fields further south, the oil
-originates in the Middle and early Upper (?) Miocene shales,
-of similar organic nature, and passes upward to sands of Upper
Miocene and Pliocene deposition included in what is known as
the McKittrick formation. In the Coalinga field the equivalent
-of these Miocene shales is probably what is known as the" Big
Blue," which is made up of clay, sand, and gravel, but is not
-organic in nature, and does not therefore possess the essen-
tials necessary to give rise to commercial oil in this vicinity.
Passing southward, however, this member increases in organic
-contents and thickness, and in the Pyramid Hills gives rise to
.a distinct petroliferous odor on fresh fracture. The thickness
has here been estimated at 1,800 feet.2
The increase in the petroliferous nature of these Miocene
shales as they pass sonthward, and the fact that they dip under
the plain, to be uncomformably covered by McKittrick beds,
indicate a possibility of commercial oil in the latter formation,
as well as possibly in the Vaqueros sands. That. this is all im-
portant condition is shown by the actual development. of oil in
what has proved to be the McKittrick formation in the Lost
Rills.
Aside from the developments in the Lost Hills, Belridge, and
Fullerton-Whittier districts, there has been nothing of great
moment proved, althuugh certain undeveloped localities are
recognized as offering possibilities of production at shallow
·depth.
Natnrally, the sudden increase of production caused by de-
'Velopments in .\lidway has created a large surplus. Consump-
tion has not kept pace with production; and it is highly
improbable that consumption will, at any time in the future,
jncrease in any such proportion as in past years. With com-
paratively few exceptions, home-markets are supplied, and
future increase in consumption must corne from the increased

2 Bulletin No. 406, U. S. Geological SUr'l1ey, p. 63 (1910).

840 PRESENT CO~DITIO~S IN THE CALIFORNIA OIL-FIELD3.

demands due to larger population and shipments to South

I
America.
If we assume present daily production over a period of eight
months ending Sept. 1, 1911, at 211,000 barrels, and surplus at
34,500 barrels, the daily consumption amounts to 176,500 bar-
rels, or 64,422,500 barrels per annum. Compared with 1909, in
which year the actual consumption was about 58,000,000 bar-
rels, the increase is not large.
The annual production of oil in California has been as fol-
lows:
Barrels. Barrels.
1875................. ...... 3,000 1893................... 470,179
1876 ....................... 12,000 1894................... 705,969
1877 ....................... 13,000 1895 ................... 1,208,482
1878 ....................... 15,227 1896 ................... 1,252,777
1879 ....................... 13,543 ] 897 ................... 1,903,411
1880 ....................... 40,552 1898 ................... 2,2·'>7,207
188l.. ..................... 99,862 1899 ................... 2,642,095
1882....................... 128,636 19(10 ................... 4,324,484
1883 ....................... 142,857 1901.. ................. 8,786,330
1884 ...................... 262,000 1902 ................... 13, 984, 268
1885 ....................... 325,000 1903 ................... 24,38:!,472
1886 ...................... 377,145 1904 ................... 29,649,434
1887 ....................... 678,572 1905 ................... 33,427,473
1888 ....................... 690,333 1906 ................... 33,098,598
1889 ....................... 303,2:.10 1907 ................... 39,748,375
1890 ..... , ................. 307,360 1908 .................. .48,300, 758
18111 ....................... 232,600 1909 ................... 58,191,000
1892 ....................... 385,049 1910 (estimated) ... 75,000,OOO

The field-price at present is approximately 30 cents per bar-

rel for fuel-oil and 45 cents per barrel for refining-oil. There
is no real reason why this price should not rule lower, as there
are apparently some producers willing and anxious to sell at
prices considerably below these figures.
Drilling is still aetive, although much of the work is being
done by the Southern Pacific Co., which is reported to be run-
ning over ninety strings of tools. On Jan. 1,1911, the number
of rigs drilling was 567; on J nly 1, 492. For the six months
the total prodnction is approximately 38,000,000 barrels. Con-
sumption has not materially increased for the half year; on the
contrary, a falling off has been the tendency for the past 90
days.
To-day there is above ground a total of approximately
40,000,000 barrels. The average surplus for the eight months
 PRESENT CONDITIONS IN THE CALIFORNIA OIL-FIELDS. 841

ending Aug. 30, 1911, was approximately 32,000 barrels per

day. By months the daily average excess has been, commenc-
ing with January, 21,000, 30,000, 57,000,35,000, 18,000, 33,000,
and 32,000 barrels.
It is exceedingly to be regretted that the oil-producers of
California, as a whole, do not apparently realize the real cost
of production. The older fields cannot hope materially to re-
duce production-costs. On the contrary, as the deeper terri-
tory is drilled, and present producing wells decline, costs must
inevitably advance. From territory of, say, 2,500 ft. depth,
total costs will approximate from 30 to 35 cents per barrel.
For direct production-i.e., pumping, cleaning, and pulling-10
cents per barrel may be safely assumed. For maintenance of
surface-equipment and rigs, 4 cents is a conservative estimate.
For exhaustion of oil-land, and redemption of capital, from 6 to
10 cents, must be reckoned; and for drilling to maintain produc-
tion, 12 cents is not excessive. These figures make a minimum
of 32 cents and a maximum of 36' cents. It is obvious that
for any business in which the risk is as large as in the drilling
of oil-wells, the resultant profit should be in proportion to the
risk involved. Under existing conditions in California, this is
most emphatically not the case_
The recent agitation which has brought about the dissolution
of the Standard Oil Co. has in no way benefited the small pro-
ducer. On the contrary, the situation has been rendered, if
anything, more acute. Because of its self-contained character,
as producer, transporter, refiner, and marketer, the Standard
Oil Co. was able to earn a profit when the small producer was
confronted with a loss. Regulating prices, even within modest
limits, by agreement is apparently to-day a criminal act. Be-
cause of this, it is not possible to reach any agreement with the
great factor in the California oil industry, and we have the spec-
tacle of the Standard Oil Co. of California exerting a stronger
and stronger domination, and the small producer getting deeper
and deeper into financial difficulty.
The utter failure of "trust-busting," so far as the' commer-
cial relief of California oil-producers is concerned, is self-evi-
dent. It would be much more to the point if conditions were
frankly faced as they exist, and regulation of output and prices
permittcd, if necessary, under government supervision. What
 I
842 PRESENT CONDITIONS n THE CALH'ORNIA OlL-FIELDS.

is being aimed at might be accomplished in that way. It is.

certainly not being accomplished at present by the absurd
methods now pursued. The Standard Oil Co. of California,.
o,perating as a strictly local institution purged and purified
from contaminating associations with the parent company, can
quite as effectively dominate the fields as did ever the parent.
And unless we turn anarchists pure and simple, and confiscate
property and ignore vested tights, there is absolutely no way
of curing the trouble save by pools and agrcements recognized
and encouraged by law. What is true of the Standard as to
the cost. of doing business will apply in less degree to the
Union Oil Co., and to the Associated Oil Co. in still less
degree, because the latter company is not in the refining busi-
ness. To the small producer, who depends for his profit on
taking the oil from the ground and selling it to the transport-
ing and marketing companies, the present conditions spell ruin,
unless corrected ill the near future.
The waste of oil is appalliug. Brought to the surface, it is
allowed to lie for months in open earthen sumps. Storage-
tanks of steel, concrete, and earth are full to overflowing; and
yet the daily surplus of from 31,000 to 50,000 barrels accumu-
lates, and is in part dissipated by evaporation. Probably not
less than 4,000,000 barrels, and possibly double this amount,
of oil was lost last year by evaporation and seepage. This
year will see quite as much similarly dissipated. Much of this
loss could be eliminated by agreement among the producer".
Practical conservation would be along lines of restricted pro-
duction, permitting the oil to remain in its natural reservoirs
underground until such time as it can be produced and sold at
prices that will yield a reasonable profit to the small producer.
To improve prices and relieve surplus, suggestions have been
made that large quantities of oil be burned. This would be
an attempt to conserve prices at the expense of natural re-
sources. The mere suggestion of such a remedy for a condi-
tion that need not exist if sane conservation were effective, is
sufficient commentary on the utter inability and ineffectiveness.
of theoretical cures. Thanks to existing laws, it seems that we
must continue recklessly to squander our resources and rob
the State of one of its greatest assets without satisfactory
return.
 PRESENT CONDITIONS IN THE CALIFORNIA OIL-FIELDS. 843

On the Pacific coast of North and South America there

has as yet been developed no deposit of coal equal in quality
to the best eastern Australian or Welsh products. The cost
of the non-uniform article which is found and mined in Wash-
ington and British Columbia is much higher, as must also be
similar products awaiting development in Peru and Alaska.
Excess in these coal-costs and the poor quality of the article
have, heretofore, not only retarded various industrial develop-
ments, but hindered manufacturing enterprises on the Pacific
Coast. This condition, however, paved the way for the intro-
duction, eager use, and marked success of the fuel par excel-
lence in steam-generation-California oil.
A few comparative statements showing its superiority to coal
in point of heat-value and economy in firing boilers follow:
California oil in general use and under identical conditions
gives uniform results. The evaporative' power of the Pacific
Coast coals varies greatly. Under horizontal boilers, 1 lb. of
California oil should evaporate from 13 to 15 lb. of water.
One pound of the best coal in use on the Pacific Coast will
hardly evaporate 9 lb. of water, and 6 lb. is the figure for poorer
grades. Taking the ratio of the two fuels in point of evapora-
tion efficiency as 14 lb. to 8Ib., or 1.75 to 1, we find that 1,280 lb.,
or 3.8 barrels, of fuel-oil is equivalent to one long ton, or 2,240
lb., of coal. In transportation-cost, the advantage in favor of
pipe-line is so great that the cheapest rail-transportation cannot
compete, although water-shipments come nearer to so doing.
Loading- and unloading-costs, losses from wastage and theft,
and the difference in stoking-expenses are to a high degree in
favor of the liquid fuel.

"Probably no more striking way of actually showing the relative commercial

value of coal and oil as a fuel, could be presented than by stating that the Atchison,
Topeka and Santa Fe Railroad Company made the following comparative tests, of
the cost per train mile, of coal costing $6.65 per ton and petroleum costing $1.33
per barrel.
"Twenty-five passenger and freight engines on a thirty-day run, used 2,077 'tons
of oil and traveled 8;,063 miles, or 41.9 miles per ton, or :J,500 miles per month
per engine. Oil at $1.33 per barrel would. at this figure, cost 14.4 cents per mile.
Twenty-five pat>'lenger and freight engines (same days, same track, and same-
condition) burning coal, cost 23.2 cents per mile. The oil was 15° Baume, about
the same as the Kern River oil, which is 14° and liO Baume; this showed a
saving for oil of 38 per cent., and the experiment was tried with coal at $6.65-
per ton.
844 PRESENT CONDITIO~S IN THE CALIFORNIA OIL-FIELDS.

"In this extended and practical test the cost of the oil per barrel was one-fifth
Qf the cost of the coal per ton, while the resulting gain for oil was 38 per cent.
Stated in another form, the value of the two fuels would be the same when the
price of the coal in tons was three and one-half times the price of the oil in
barrels" 3

The following tables, extracted from a report compiled at

my request by George W. Dickie, consulting marine engineer,
of San Francisco, will be of interest in practical1y i1lustrating
the proposition. Oil is figured at $1 per barrel. Indicated
horse-power of steamer, 3,000; steaming speed, 11 knots.

" A."
:=1-<
~~~
~c~ .
>,. .... ~"O ~>. .s~ ~ Cost Per Day (or Several Qualities of
u~
0_"
~~~
,gr..
:=a;~;
as 0 ·0
::IQ~~
~
~'"
. ",,00
Q.I:l.a
:g;c:!
Coal at the Following Prices,
Delivered.
OJ ~ ~p" <~ 54. 86. 18.
12,000 62.70 37.56 $288.36 $413.76 $513.16
.$300 11,000 68.40 37.56 311.16 447.96 584.76
10,000 75.20 37.56 338.36 488.75 639.16
9,OCO 83.60 37.56 371.96 539.16 706.36

" B."
A vessel engaged in coastwise traffic between California ports:
Oil-consumption per trip, 4,000 barrelK, $4,000
Firemen, wages and food, 276

Total cost, $4,275

Coal-consumption per trip:
1,200 tons, at say $4, $4,800
Firemen, wages and food, . 1,000

Total, $5,800
Saving per trip in favor of oil, $1,525
Assuming two voyages per month, the saving is, 3,050
Allowing 11 months' operation per year, yearly saving, 33,500
Or, 6 per cent. on a sum slightly under, . 560,000
This figure of $1 per barrel at San Francisco bay would equal about 65 cents
-net to the producer at the well.

The United States Geological Survey has estimated the con-

tents of the probable oil-lands in the United States as follows:
- - - - - - - - - - - - _.. _ - - - - - - - - - - - - - - - -
3 Report of U. S. Naval "Liquid Fuel" Board, Bureau of Steam Engineering,
.D. S. Navy Department, pp. 390 to 391 (1904).
 PRESENT CONDITIONS IN THE CALIFORNIA OIL-FIELDS. 845

Estimated Quantity of Oil in United Stutes.

Minimum. Maximum.
Barrels. Barrels.
A ppalachian field, 2,000,000,000 5,000,000,000
Lima-Indiana field, 1,000,000,000 3,000,000,000
Illinois field, 350,000,000' 1,000,000,000
Mid-Continent field, 400,000,000 1,000,000,000
Gulf field, 250,000,000 1,000,000,000
California field, 5,000,000,000 8,500,000,000
Minor fields, 1,000,000,000 5,000,000,000
Total, . 10,000,000,000 24,51)0,000,000

In other words, of the minimum of 10,000,000,000 barrels,

California is credited with one-half of the entire possible produc-
tion of the United States, and of the possible maximum, Cali-
fornia may possibly produce one-third.
Personally, I believe that the maximum will unquestion-
ably be in excess of 8,500,000,000 barrels for California. The
total production for the State to Sept. 1 was approximately
434,000,000 barrels, leaving a very large percentage still un-
derground. It is safe to say that California oil will dominate
the fuel-market on the Pacific Coast during the present cen-
tury and probably far into the next century. Unless con-
·sumption is tremendously increased, this is undoubtedly true.
'These figures are, of course, only relative approximations, but
.are sufficiently accurate to warrant the assertion that Califor-
nia oil will dominate the fuel-market of the Pacific at least
through the present century.
Comparing California oil with Alaska coal, it is apparent
-that oil has complete control of the field.
Alaska coal can be landed at Puget sound ports for approxi-
mately $4 per ton.'
Assuming 3.5 barrels of oil as equal to one ton of coal and
oil at 50 cents per barrel at the well, its comparative cost with
coal per ton delivered on Puget sound would be $3.50, and
with oil at 75 cents at the well, this cost should not exceed
:$4.20. At prices even in excess of this, consumers would not
return to coal, owing to the many indirect advantages accru-
ing to the burning of oil. Costs at other points depend
entirely upon distance by sea. Assuming Valparaiso, Chile, as
the southern, and Douglas Island, Alaska, as the northern ex-
• Bulletin No. 442, U. S. Geological Survey, p. 88 (1910).
VOL. XLu.-49
846 PRESENT CONDITIONS IN THE CALIFORNIA OIL-FIELDS.

treme, with oil at 60 cents per barrel at the well, coal must sel!
at $5 per ton at Valparaiso, and $3.50 at Douglas Island, in order
to equal oil in fuel-value. This takes into consideration due
allowance for interest, redemption-funds, depreciation, and
transportation. When the prices of oil are yet higher coal
cannot compete, because the oil is so much more satisfactory in
every way, and has so many advantages, that the cost of coal
would have to be materially less to induce the abandonment of
oil. In view of the above statements, it is fair to assume that
during the life of the fields there will be no fear of competition
from coal until oil is selling above 75 cents per barrel.
Recent experiments indicate the possibility of oil being used
for domestic purposes, even in small dwellings. I am using it
in my home for both cooking and heating, to the entire exclu-
sion of coal; and a more recent device seems to make the
installation-cost so small as to open the entire domestic field to·
oil-competition. If so, the consumption of coal will practically
cease in California, and the public will cut its fuel-biBs more
than 50 per cent.
The action of the government in withdrawing cel·tain terri-
tory is a step in the right direction. Additional drilling at
this time would benefit no one, and would be an additional
menace to an already overburdened situation. There is no
storage so satisfactory as that afforded by the underground
reservoirs from which the oil comes. It is free from costs of
any kind, and seepage and evaporation are entirely eliminated ..
Some plan, however, should be decided upon, whereby the-
land will be available when needed. Leasing nnder certain
restrictions would seem to be a logical solution. At present it
would be folly to open in any way this withdrawn' area.
Territory now producing can care for consumption for an in-
definite period. As a suggestion, I should say that government
land should not be leased so long as oil at the well se11s for
less than from 60 to 70 cents per barrel, and that, on leases so
granted, no new drilling should be permitted when prices rule
below this figure. This ,vould be sane and practical conserva-
tion, as it would permit production only in times of need, and
would conserve a great natural resource that, once exhausted,.
can never be replaced.