CHAPTER III

AMAZING INCREASE IN CONSUMPTION

Fears of the United States

The consumption of oil is rising at a terrific rate. Entire branches of industry are transformed, and it may be said that all modern transport is increasingly dependent upon the use of the new fuel. Automobilism and aviation owe their existence to it. Not only do steam engines tend to give place to the oil motor in a great number of cases, but they themselves begin to use oil instead of coal. Locomotives and the engines of ships more and more seek the source of their energy in oil. No more smoke, no more troublesome ash, and double the calorific power. The work of a fireman, formerly so exhausting, is reduced to the opening and closing of a tap. If coal is replaced by mazut in the furnaces of ships, their radius of action is increased by 50 per cent.; it is more than tripled if the internal-combustion engine is used. Certain British engineers are not afraid to assert that _one ton of mazut, used in a Diesel engine for ships, is equivalent to at least six tons of coal_.

Few countries hesitate in face of such advantages. Since 1885 the railways of Southern Russia have been run on oil; those of Rumania since 1887. The railway companies of the United States consumed 20 million barrels even in 1909--that is, _one-tenth_ of the production at that time. And the last few years have been marked by the conclusion of contracts by the United States Railroad Administration for the delivery of 50 million barrels. The engines of the Southern Pacific Railway have been aptly described as veritable monsters. Their boilers are two metres in diameter and fourteen and a half metres long. Their heating-surface is double that of ordinary locomotives. The driver's place is in front, which allows him to see the track.

Mexico has long since followed the example set by the United States. So also has Austria for her Alpine railways. France has made experiments which have been much talked of; and the Argentine, only a few months ago, has concluded important contracts with the _Shell Transport and Trading Company_ for the supply of oil for her railways. Everywhere the substitution of oil for coal is going on, and consumption is developing with such rapidity that the supply is no longer anything like equal to the demand. Even if Russia recovered, the discrepancy between the needs of the world and the quantity available would be considerable. That is why the price of liquid fuel, which requires little labour in its production, remains so high.

Since North America supplies 80 per cent. of the world production, the dollar has become the standard currency for oil. At the present time, Rumanian oil, delivered in Hungary, is sold at the same price as American oil. _The market-price is therefore fixed for the whole world by New York._

Very few people realize at all clearly what will be the consumption of oil in a few years' time. It is natural enough, for it is only a short time since our great and instructive Press began--very timidly, however--to entertain its readers with this burning topic. There is no one, at present, who does not know that the question of fuel is of supreme importance to the whole industrial life of Europe.

Now, the world-production of coal was, in 1920, about 100 million tons short, compared with the production in 1913. The directors of colliery companies endeavour to increase the output of the mines, but they obtain in general only disappointing results, which is not strange when we observe the increasing number of miners' strikes, the rise in wages, and the fact that laws are continually passed to reduce the hours of labour.

In producing steam, one ton of mazut gives almost the same result as two tons of coal; more than 50 million tons of fuel-oil are therefore required to make good this enormous deficit.

Now, in 1919 the world production of mazut did not exceed 75 million tons. After making good the shortage of coal, this would leave only 25 million tons to satisfy the ordinary demand. This comparison of figures makes clear how great is the need of oil, at a time when the use of oil, in preference to coal, is becoming more and more the order of the day. Now, the great and general increase in consumption is not equalled by the production which, though far from stationary, is none the less much below the needs which are predicted for the future in competent circles. An American oil journal recently published the following figures for the consumption of the United States:--

1907 24 million tons 1918 57 million tons 1919 75 million tons

And even at the beginning of 1920 an increase of 25 per cent. over 1919 was noted. The rate of increase was such that, in January and February 1921, the American consumption was greater by 230,729 barrels _a day_ than the national production. The stock of oil in the United States, both national and Mexican, has recently been considerably reduced, and does not amount to more than 114,000,000 barrels, representing only four months' consumption, although for years past it has always been sufficient to meet the consumption for six months. It must be remarked that motor-cars are terrible gluttons for petrol, and that in the United States every farmer has his car. In a self-respecting family there are generally three--a limousine for use in town, an open car for touring, and a Ford for the servants to fetch provisions. It has been calculated that there is on an average one motor-car to every thirteen inhabitants. The Ford works alone are capable of turning out three million annually.

And, as if that was not enough, America is planning to develop, by motor traction, the means of transport in Asia, the continent without railways. We may predict for this a consumption of 120 million tons in the near future.

_The United States consume twice as much oil as the rest of the world, while their resources do not amount to more than one-seventh of those of the world._

Their consumption increased in 1920 by 25 per cent.; their production only by 11 per cent. And already fears are entertained that it may diminish. Two-thirds of the oil-fields of Oklahoma, which state alone produces nearly one-quarter of the total, have been developed; and the number of borings tends to diminish.

If the increase in world-consumption of oil continues at the rate that it has done during the past few years, the oil reserves of the United States, calculated on the basis of 70 barrels to each inhabitant, without allowing for increase of population, would, according to the Smithsonian Institute, come to an end about the year 1927.

These figures seem to me a little exaggerated, for the reserves contained in the soil of the United States cannot possibly be completely exploited in so short a time. But the figures published by the Geological Survey of the Department of the Interior shows that other countries consume half as much oil as the United States, while their soil contains seven times more.

"These countries consume at the present time two million barrels a year; at this rate, they have reserves sufficient for 250 years. The United States consume 400 million barrels a year; they have only enough for 18 years.[8]

"The total amount of oil which can still be extracted from the soil of the entire world has been computed at 60,000 million barrels--43,000 million have already been brought to the surface by successful borings.

"Of the 60,000 million which remain to be extracted, 7,000 million are to be found in the United States and in Alaska; 53,000 million in the rest of the world."

That is why the American Navy, having in view the treatment of bituminous shale by distillation, has reserved to itself the rights over immense deposits, chiefly in Colorado and Utah. If the United States do not succeed in acquiring new oil-fields in the rest of the world, the position will become so serious that they will only be able to avoid war at the price of economic vassalage.

There is oil in all parts of the world, and yet dominion over oil is one of the most concentrated possible.

From Alaska almost to Tierra del Fuego, every country in the New World possesses some.

Alaska.

Canada: its presence was discovered in 1789 by Sir Alexander Mackenzie.

United States.

Mexico.

Central America.

Venezuela.

Trinidad, Guiana.

Colombia.

Ecuador, Peru, Bolivia.

Chili, the Argentine.

Brazil and Uruguay: it is hoped that oil will be found shortly.

In Europe it is less evenly distributed:

Hanover (Wenigsen).

Alsace.

Italy.

Poland. The Ukraine. Rumania.

Hungary: a subsidiary company of the _Anglo-Persian_, the _D'Arcy Exploration_, found oil deposits in March 1921.

Asia is nearly as rich as America:

The Caucasus.

Persia, Mesopotamia.

Dutch Indies.

Siam, Burma.

China.

Japan and Formosa.

Africa and Oceania, on the contrary, seem to possess only small quantities of the precious oil. There is some in North Africa, in Egypt, and possibly in Madagascar. The great British prospecting group, which I have already mentioned in connection with Hungary, is making a thorough search at this moment in Western Australia and New Zealand.

Now nearly all these oil-fields, scattered in the four corners of the world, and in so many different countries, are at the present moment in the hands of two great trusts--one American, the _Standard Oil_, and the other Anglo-Dutch, the _Royal Dutch-Shell_--and certain companies controlled by the British Government.

FOOTNOTES:

[Footnote 8: Cp. Part III, chap. xiv, _How the United States Lost Supremacy over Oil_.]