Petroleum Economy

Said Jersey Standard's President Eugene Holman: "We've got the fuel oil shortage in the East largely licked." Holman and the industry took hope from the fact that more tankers are being put on the Texas-East Coast run. But to New York, which had to borrow oil from the U.S. Navy, and to shivering householders, the shortage seemed far from licked. And even optimistic Mr. Holman conceded that the overall U.S. oil shortage would last for at least another two or three years.

The industry was producing more than ever before. Crude oil production was running at the rate of 5,300,000 barrels a day, an alltime record, well above peak wartime production of 4,700,000 barrels daily.

But in 1947, for the first time in history, the U.S. generated more energy from oil (plus natural gas) than from coal. Per capita consumption was 608 gallons in 1947 v. 367 in 1938. In 1948, demand is estimated at over 6,000,000 barrels a day, some 700,000 barrels more than supply. Some of the factors in the astonishing rise in U.S. use of oil:

P: Farmers, mechanizing at a record rate, were using 3,000,000 tractors last year v. 1,664,000 in 1941.

P: Homeowners installed 820,000 oil burners in 1947, bringing the U.S. total to 3,757,000. Beyond that, 1,500,000 portable kerosene stoves were sold.

P: Railroads were buying more diesel locomotives than any other type. The nation's total diesel capacity has increased from 19.9 million horsepower in 1941 to 51.2 million last year.

P: Motorists, driving 7,000,000 more automobiles than during the war, have stepped up their gas consumption to 800 gallons a year v. 559 in 1944.

The oil industry plans to improve and expand production facilities one-third by a $4 billion investment. But Jersey's Holman pointed out last week that steel was still the big bottleneck. Steel is needed for casings for new wells, for new refineries, for pipelines and for tank cars to haul the product. Until that bottleneck is cracked, the U.S. will have to make do with present production.

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