Undersea Oil

Fishermen twelve miles off the Louisiana mainland in Caillou Bay are inclined to swear when they come in sight of what looks like a gigantic harbor buoy sticking up between two scows. A structure they think improper to the high seas, this is no buoy but one of several oil derricks erected in the bay by Texas Co. Called "deep-sea drilling," Texaco's operations are in water no deeper than 25 ft., but geophysical crews mapping off-shore contours often have to take dynamite soundings. The fishermen claim that any fish not killed or scared clean to Cuba by the explosions are certain to be dispersed by oil-polluted water around producing wells.

Seized on by Texas fishermen as a crucial case last March was the application of Humble Oil & Refining Co. for permission from the War Department to drill a well in 18 ft. of water in the Gulf of Mexico about a mile off the mainland of Jefferson County. In the Texas Legislature sportsmen and conservationists joined with fishing interests to fight for State action against the drilling, pass laws to keep Texas oil fields out of the water. This was the first time any oil company had proposed to drill in the Gulf proper and tarpon fishermen envisioned miles of future wells ruining their fun. Last week however, it looked as though Humble? would have its way. At Austin the Legislature adjourned without acting on any of the bills introduced by Humble's opponents, leaving the matter up to the State Railroad Commission, which regulates the oil industry. In Washington Secretary of Agriculture Wallace withdrew his support from the fishing interests, saying he was convinced Humble would leave Texas waters fit for fish.

Meanwhile in California a longer and louder wrangle over off-shore oil wells was settled, at least for several years to come, when Governor Merriam signed a bill for leasing State-owned oil land under the sea near Huntington Beach.* A legislative headache in California for years, this strip of tideland holds natural gas and oil worth about $500,000,000. At one time the State tried leasing it to oil companies which did their drilling from piers built out through the surf. Opposition came not from fishermen but from bathers who found oil scum all over their beaches. They raised such a hullabaloo that a law was passed forbidding all tideland drilling. Then in 1933 oil engineers devised a new method of drilling called "whip-stocking," which enabled oil companies to drill on a slant, tap oil pools as much as 1,000 ft. away.

This almost perfect technique for extracting oil from the State's underwater territory was not neglected by California oil companies. By 1934 about 100 wells had been drilled by independent companies on town lots at Huntington Beach, whip-stocked down through beach property owned by Standard Oil Co. of California and out into the State oil pool. Caught at this, the companies were penalized only by being forced to pay 14% royalties or less on the stolen oil. Next year a special investigating committee found that Standard had also been tapping the State pool with vertical wells. Standard offered to pay $100,000 in back royalties--an offer which the State rejected as absurd.

Last November the Huntington Beach issue became public in one of the most strenuous, expensive and high-powered propaganda campaigns directed at California voters since the defeat of Upton Sinclair's EPIC plan in 1934. Initiative proposition No. 4, drafted to make slant drilling legal and provide a royalty of 14.7% for the State, almost overshadowed the national elections in volume of advertising, all under the slogan "Save Our Beaches!" Few Californians, however, thought it a coincidence that if the measure were passed Standard, richest oil company in the State, stood to get a monopoly on the Huntington Beach pool by virtue of its waterfront holdings. Few Californians voted to save their beaches for Standard Oil. After the proposal had been soundly beaten, Governor Merriam echoed popular opinion when he remarked that unless the State could get adequate royalties from oil companies it might better develop Huntington Beach itself.

Meanwhile Standard made a revised offer of $505,952 as royalty for oil already removed from the tideland. Despite stiff opposition by State Senator Culbert L. Olson of Los Angeles, chairman of the committee which first investigated Standard, this settlement was confirmed last week. Standard's best lobbying, however, was not good enough to beat Senator Olson's own pet bill, which became effective immediately after Governor Merriam's signature. Provisions: 1) all drilling must be vertical from piers or artificial islands; 2) all oil companies will be free to bid on each of eleven sections of the tidelands, but no company may lease; two adjacent sections; 3) State royalty will be a minimum of 30%; 4) rigid precautions must be taken against polluting the beaches.

*U. S. liquormen sighed with relief when, four days later, Governor Merriam vetoed an "antidiscriminatory" liquor bill which would have intensified the interstate liquor tariff war (TIME, May 24).

This file is automatically generated by a robot program, so reader's discretion is required.