Legal Planning of Petroleum Production

Abstract

THE heroics of Governor Murray in calling out the troops to close the oil wells of Oklahoma until such time as purchasers would pay one dollar a barrel has dramatized the acute problem of low prices and overproduction which has haunted the petroleum industry in the past few years. The competitive exploitation of oil lands has resulted not only in dissipating huge quantities of both oil and gas through the wasteful rush to market but also in diminishing profits through the production of oil and gas in excess of current demands. It has become imperative that the financial losses of overproduction be checked and that the prodigal physical wastes be eliminated. Until recently, however, in none of the extractive industries has there been any but petty attempts to eliminate such waste, although the conservation of our natural resources has been for decades a campaign cry of a progressive minority. Now conservation, seen as a means of solving this problem of wasteful overproduction, has become endowed with respectability.' But if overproduction has thus given an impetus to the conservation movement, in turn it is to conservation that the petroleum industry now looks for a legal basis for the rationalization of production.