Gas Re-cycled

Natural gas is an adaptable agent. It may be used in anesthesia or in the cure of sleeping-sickness, in fueling or fighting fires, in blowing up cities or in dyeing cloth. Its first and perhaps most important use, however, is in supplying the pressure that forces crude oil from the bowels of the earth to the surface. When local gas pressure is exhausted, further working of an oil well is almost prohibitively expensive.

It was, therefore, natural that California, wishing to slow up oil production but unable to do so directly by law, should last month make a law limiting the amount of gas oil companies might allow to go to waste at their wells.* Due to varying conditions in different fields, no general ratio of gas waste to oil production could be specified; instead, the law provided that waste should be limited to a "reasonable amount" to be determined in each case by State Oil and Gas Supervisor R. D. Bush. Waste can be limited by "recycling" the gas into the ground, thereby sustaining the pressure and guaranteeing a long, steady but comparatively slow flow of oil; by capturing the gas and extracting its casing head gasoline contents; by selling the gas to public utility companies. Large companies, like Standard Oil Co. of California, have a number of years engaged in "recycling" and in reclaiming casing-head gasoline. Recently some of them, like Standard of California, have contracted to supply natural gas to public utilities for distribution instead of or in combination with artificial gas. Last week, Standard of California itself entered the public utility business by paying to A. E. Fitkin & Co. $26,801,327 for control of Pacific Public Service Co. which, besides peddling ice, ice cream, water and cold-storage space in southern California, sells gas and electricity to a large population just south of San Francisco Bay. Because by such means they could cut down gas waste and yet maintain oil production, large California oil companies supported the conservation law. Small companies, on the other hand, raised a chorus of howling protest. They could not afford to build casing-head or "recycling" plants; the small amount of gas they wasted would not warrant the expense of pipe-lines and could not, therefore, be sold; the big operators would profit at their expense. To win over the little fellows, California's seven largest producers! offered to form Co-operative Gas Conservation Association which, supported by $230,000 a year from each of the seven, would provide facilities for pooling and recycling excess gas in the large fields.

To the big operator whose large underground oil reserves might be diminished through lack of gas pressure, this is an ideal arrangement; but to the little producer who wants to get his oil just as fast as the gas will push it out of the ground in order to pay off his costs and begin to make money, it seems dubious. At any rate, little operators met in Los Angeles last week, formed the Association of Independent Operators, tried to make up their minds whether to stake everything on proving the conservation law unconstitutional or to sign the contracts sent out by the co-operative association, and take their chances on later smoothing out what they considered its inequalities.

* Such waste at the end of 1928 was estimated at 77,000,000,000 cu. ft., equivalent in heat units to 3,000,000 tons of coal, 14,000,000 barrels of oil.

/- Associated Oil, General Petroleum (S. O. of New York subsidiary), Standard of California, Union of California, Texas, Richfield, Shell.