TITLE

PETROLEUM CONSERVATION IN THEORY AND PRACTICE

AUTHOR(S)
McKie, James W.; McDonald, Stephen L.
PUB. DATE
February 1962
SOURCE
Quarterly Journal of Economics;Feb62, Vol. 76 Issue 1, p98
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This article focuses on the conservation of petroleum products in the U.S. The waste of oil resources, which led, thirty-odd years ago, to the imposition of conservation controls, was the result of the rule of capture. The owners of the surface rights above oil pools would drill wells in a dense pattern along the edges of their properties and produce as rapidly as possible in order to drain the oil or gas from under neighboring tracts. The resulting exploitation was unrestrained by any consideration of long-run price, demand or cost. Any conservation policy must be adapted to the special technical characteristics of the industry producing the resource. The volume of oil and gas ultimately recoverable from most reservoirs depends on the rate of production over time, among other things. The production controls have prevented a flood of low-cost oil from undermining this price. In effect, the inefficiencies forced upon operators of flush properties have sustained the operation of the unrestricted marginal wells. The allocative system, however, has failed to control two variable elements in crude oil availability. One is the number of wells, which has increased out of proportion to oil reserves owing to the encouragement of unnecessary drilling in the per-well proration formulas.
ACCESSION #
7697891

 

Related Articles

  • Parties Pick Sides In Energy Fight. Hobson, Margaret Kriz // Environmental Forum;May/Jun2012, Vol. 29 Issue 3, p8 

    The article reports on the energy issue in the U.S. particularly in petroleum products. The Department of Interior has opened the door to Alaska's Cook Inlet for oil and gas development wherein oil companies can explore the area. The economists have blamed the gasoline price hikes on the unrest...

  • Iranian threat means U.S. must drill, drill and build pipeline. KUDLOW, LAWRENCE // Human Events;3/5/2012, Vol. 68 Issue 8, p18 

    The article discusses the need of the U.S. to drill oil and build pipelines because of the Iranian threat to close the Strait of Hormuz. It advises the administration of President Barack Obama to expand the country's oil and gas exploration and production. It expects the threat to cause an...

  • CRUDE AWAKENING. Smith, Patricia // New York Times Upfront;9/1/2008, Vol. 141 Issue 1, p6 

    The article focuses on the impact caused by the increase in oil price in the U.S. It says that energy cost is an integral part of the price of everything the consumers buy. Eventually, it leaves less money for the consumers to spend for everything which accordingly damages a slow economy and...

  • Oil prices continue to reach historic heights.  // National Petroleum News;Dec2004, Vol. 96 Issue 13, p15 

    This article reports that winter's approach and concerns about tight heating-oil supplies drove oil prices to a record $55 per barrel on October 15, 2004. United States light crude finished at $54.93 a barrel on the New York Mercantile Exchange, after it hit a new high point of $55 during the...

  • What's driving our new oil reality--supply and demand or rampant speculation? GETTING TO THE BOTTOM OF CRUSHING OIL PRICES. Reid, Keith // National Petroleum News;Jan/Feb2011, Vol. 103 Issue 1, p14 

    The article looks at the changes of the prices of petroleum products along with the details of the two arguments regarding the supply and demand issues in the petroleum industry in the U.S. It mentions that the decline of the world supply of petroleum products which causes the industry to set...

  • Beyond the Gulf Crisis: An Energy Strategy for the '90s. Flavin, Christopher // Challenge (05775132);Nov/Dec90, Vol. 33 Issue 6, p4 

    The article stresses that a strong national energy policy focusing on greater rule efficiency would alone reduce the U.S. oil dependence on Gulf countries. According to the author, the U.S. bears considerable responsibility for the deterioration in the world oil picture. Throughout the 80's,...

  • Oil: the Menaced Resource. Arnold, Ralph // New Republic;4/8/25, Vol. 42 Issue 540, p176 

    Reflects on the rate of consumption of the oil in the U.S. with emphasis on its impact on the economic condition in the U.S. Prediction of a committee of eminent geologists, which indicated that at the present rate of consumption the oil reserves of the United States, amounting, it was believed,...

  • Executive Summary.  // Libya Oil & Gas Report;Q1 2011, Issue 1, p7 

    The article presents an overview of Business Monitor International Ltd.'s (BMI's) forecast on the condition of the oil and gas industry in Libya from 2011-2020. It states that the country will provide about 15.56% of oil supply in Africa by 2015 and 7.56% demand in the same year. It expects an...

  • Facing the Future. Dablain, Damien // Harvard International Review;Nov1985, Vol. 8 Issue 1, p34 

    The article focuses on the Organization of Petroleum Exporting Countries which is struggling to prevent its own collapse. The organization is unable to control prices or enforce member production quotas. Implications related to the decline in the market power of the organization and economic...

Share

Read the Article

Courtesy of NEW JERSEY STATE LIBRARY

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics