U. S. Oil

Since 1920 the Department of the Interior has been freely passing out neat permits, at the rate of about 6,000 per year, which set inquisitive oil drills a-rattling on the public domain. Above most of these drills were "wildcatters," adventurous independent prospectors, sending their small assets down the drill holes on the chance of striking a gusher.

Some 20,000 drilling permits were outstanding last week when President Hoover decreed that no more should be issued, that no new oil leases should be executed, that the undiscovered oil supply of the U. S. Government should remain undiscovered indefinitely. He said:

"There will be no leases or disposal of government oil lands . . . except those which may be made mandatory by Congress.* In other words there will be a complete conservation of government oil for this administration."

Secretary of the Interior Wilbur promptly picked a committee of three to sift outstanding drilling permits. They were: Commissioner of the General Land Office William Spry, Director of the Geological Survey George Otis Smith, Interior Department Solicitor Edward C. Finney. They will revoke permits which have lapsed or under which specified development has not occurred.

Theodore Roosevelt began Conservation in 1907 by withdrawing 16,000,000 acres of forest land from commercial exploitation. William Howard Taft in 1909 withdrew 7,000,000 acres of oil-bearing land. In 1920 Congress passed an oil-leasing act which upset the Roosevelt-Taft policy by permitting the Secretary of the Interior to allow oil prospecting, to grant oil leases. This act spawned the oil corruption of the Harding administration. Now, in the acreage it affects, the Hoover order far outdoes Roosevelt and Taft orders combined.

The oil industry's overproduction, not its underhanded dealings with the U. S., prompted the Hoover decree. As Secretary of Commerce Mr. Hoover was a member of the Federal Oil Conservation Board and heard predictions by fellow engineers that the U.S. oil resources would be exhausted in five, ten or 25 years, unless steps were taken to check the flow. He knew the U.S. possessed only some 15% of the world's oil supply, yet was producing 70% of the world's demand.

Businessmen wondered if the Hoover order would help the oil industry out of the depression it has sunk into through overproducing. Only one-tenth of U. S. oil production comes from government land. The Hoover order will cut this production in half, thus reducing the whole industry's supply by only 5%. But the moral effect of the move may be great.

The only protest against the Hoover oil policy came, ironically enough, from Montana's Senator Walsh, the dynamite who blew the oil scandals above ground. Some of his criticisms were: 1) the "wildcatter" whose enterprise developed the oil industry will be penalized; 2) the State of Montana would be "impoverished" by the loss of its one-third share of royalty oil revenue by the withdrawal of 20,000,000 acres of government land in that State alone from further exploitation. Senator Walsh beheld the "big interests" profiting by the Hoover order, and the small concerns operating on U.S. leases squeezed out.

*By law the U. S. must lease certain Indian oil lands, chiefly of the Osage tribe. Congress recently cut the Osage annual oil development from 100,000 acres to 25,000.