Refiners' Rift

If a Parsee lets his sacred flame die out, he is exceedingly upset, for the Parsee's flame is the Parsee's religion. Last week a great U.S. industry, in which Fire is a vital pillar of the structure of Profit, was horrified by the suggestion that it neglect its flames once a week.

The industry was Oil, in which overproduction of crude has led to overproduction of gasoline. To solve this, the Federal Oil Conservation Board suggested that in Texas, Oklahoma and California, refining schedules be cut down to six days a week. Standard Oil of New Jersey with its subsidiaries was the first to agree to this plan. Other companies were as vexed with Standard for this acquiescence as they were by Standard's recent price cut on crude oil (TIME, Jan. 27). From many an oil refiner came protests against this snuffing of refinery flames.

Most absolute in his refusal was Jacob France, president of huge Mid-Continent Petroleum Corp.: "We refiners are not storekeepers," he argued. "We cannot shut down and lock-up for a day; we cannot possibly cease operations without a great loss. In the last fifteen years our fires have never been out. A refiner must keep his fires going."

Robert Clinton Holmes, president of Texas Corp., objected by saying that such regulation of refinery runs would lead to "almost insurmountable technical and legal difficulties." As a reprimand to Standard of New Jersey, Mr. Holmes went on: "We believe that the general spirit of cooperation within the industry that was and is followed by producers should have influenced the principal purchasing companies to attempt to maintain crude prices until the cooperative movement had received every possible opportunity of succeeding."

While many refining companies took the stand of the Messrs. France and Holmes, others, including Standard of California and Associated Oil, agreed to cut refinery runs. The Mellon-controlled Gulf Refining Co. asserted that their gasoline reserves were low, that there was no need for them to cut distillation. In the same vein, Edward G. Seubert of Standard Oil of Indiana said: "We believe the appeal has merit. . . . We are running only sufficient crude to produce gasoline to take care of our current requirements."

Profits. However harassed the oil industry is by its problems, many a businessman in other lines last week viewed 1929 earnings of oil companies with envy. The duress of last year apparently did not hurt well-managed companies. Notable earnings statements included:

1929 1928

Atlantic Refining ...$17,332,417 $16,848,807 British America .... 3,235,925 3,214,705 California Petroleum. 5,718,734 1,648,919

Continental Oil 9,029,660 *4,987,564

Houston Oil 1,731,469 1,812,517

Independent Oil & Gas 5,822,179 5,092,858 Lion Oil Refining. ... 1,184,478 206,411

Louisiana Oil 1,618,198 1,585,31?

Mid-West Refining .. 9,388,179 5,743,670 Prairie Oil & Gas... 14,331,643 10,541,597 Producers & Refiners. 1,136,627 934,484

Phillips Petroleum .. 13,212,591 5,960,171

Richfield Oil 8,554,494 7,818,000

Rio Grande Oil.... 5,659,943 1,649,600

Standard Oil of

Indiana 7S:, 499, 754 77,337,166

Simms Petroleum ... 2,328,802 334,004

Standard of Kansas.. 1,512,912 292,228

Sun Oil 8,242,491 5,008,027

South Penn Oil 5,139,296 3,911,165

Transcontinental Oil. 4,235,573 899,427

Union Oil of Cal 15,019,635 11,101,935

Universal Cons. .... 1,651,696 /-16,618 Total for 22

companies ....$213,588,696 $156,936,816

Natural Gas. With almost twice the heating capacity of artificial gas, natural gas has long been utilized in many sections of the country, but only recently has it been piped great distances and commenced to play a big part in the revenue of oil companies that previously had allowed it to go to waste. Last week two important natural gas deals were nearing completion. First was the construction of two parallel pipe lines to be laid from the Texas Panhandle to Chicago, 700 miles away. Cooperating in the project are nine companies, with the Insull interests representing the distributing end and Cities Service Co. representing the producers, who will share the $100,000,000 cost of the project. Chief of the producing companies are Texas Corp. and Standard of New Jersey, with Skelly, Phillips, Continental, Colombian Carbon, United Carbon also interested.

The other gas deal pre-reported was a merger between Elertric Power & Light and United Gas. The gas system resulting from such a union would be one of the most potent in the U. S., reaching from the southwest as far east as Memphis, as far north as St. Louis, distributing 125 billion cubic feet of gas annually. Behind the merger would be Electric Bond & Share.

* Net Loss. Reported by Marland Oil Co., absorbed last year into new Continental Oil Co. of Delaware.

/-Net Loss,

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