November 1957

After an average 5.9% raise, annual salaries for all U.S. engineering disciplines now range between $5,400 and $13,100. (Annual salaries have increased 10-20 fold, but the annual raises have remained about the same.) Keeping with statistics, the average service station (Remember them?) in 1956-57 generated $89,265 in revenue, and the average service station operator earned $6,606 per annum. Not content to have their Sputnik satellite sailing over our heads, the Russians now claim to have developed a superfuel not based on oil. (I’m guessing it's vodka related.) Navy threatens to sue the state of California, city of Long Beach, and private oil men over the subsidence damages to the Long Beach naval base resulting from oil withdrawals. They cite as a precedent the successful Goose Creek (near Galveston) subsidence law suit.

East Texas crude oil - $3.25/bbl; U.S. active rig count – 2,432

November 1982

A federal judge in Cheyenne, Wyoming declares the crude oil “windfall profits” tax unconstitutional. (Let’s see…How many other industries have a “windfall profits” tax?) The California state land commission temporarily suspends seismic vessel permitting in state waters off Northern California, citing seismic air guns may hamper whale migrations. Atlantic Richfield reports plans to spud the first American wildcat on the Chinese continental shelf. In the wake of the Penn Square Bank of Oklahoma City fiasco, private and institutional investing in U.S. oil and gas drilling projects is forecasted to shrink to as little as $2 billion in 1982, as compared with $18 billion in 1981.

U.S. active rig count – 2,407

November 1998

Baghdad again bans U.N. weapons inspections until sanctions are lifted. U.S. and U.K. diplomats begin to hint about military strikes. More service company consolidations are in the offing…Parker Drilling and Superior Energy Services agree to merge, and Nabors Industries makes a run at Pool Energy Services. Phillips Petroleum, on the other hand, reports that it is “not seeking a suitor,” and that it remains “fiercely independent.” New business-speak coming out of 1998…”knowledge management” and “e-commerce.” (Meanwhile, “Y2K” threatens everything!)

Light sweet crude oil - $13.57/bbl; Natural gas - $2.44/MMBTU; U.S. active rig count – 684

The Rest of the Yarn

This month we continue with a series of articles describing the indispensability of petroleum in successfully waging World War II.

Not only did the margin of victory in the Pacific theatre swing towards the allies in large part due to their ability to maintain the lifeline of fuel oil for the naval vessels and aviation gasoline for the aircraft, but the same can be said for the Mediterranean and European theatres as well

Shortage of oil was a key factor in limiting the operations of the Italian Navy throughout the war. The Italian war reserve of fuel was exhausted by late summer, 1941. The Navy’s needs were at least 200,000 tons a month for full operations. Rationing reduced the men-of-war to less than 90,000 tons a month, and the situation steadily worsened. By April, 1942, Italian fleet units were reduced to the fuel supply actually on board. In actual fact, they never took part in another war mission after June of that year.

Germany’s oil supply line was maintained longer than that of Italy but not long enough. Germany’s oil position during the war was built in large part upon synthetic fuel, a very precarious position at best. When in June of 1944 it was announced that the primary strategic aim of U.S. air forces was to deny oil to enemy air forces, the handwriting was on the wall for the Germans. With Germany beleaguered on all fronts, consumption of oil products in Germany began to exceed production. Less than 500 tons of aviation gasoline were made during February, 1945, only 40 tons in March, and none at all in April. Germany’s large reserve of military aircraft were forced to stay on the ground with empty tanks, while tanks and armored vehicles were moved to the front by oxen. The defeat of Field Marshal Rommel’s famous Afrika Korps at El Alamein was made possible by the systematic reduction by air-attack of German-Italian oil stores and by the strangulation from an air blockade. It ended for Germany in the dust and ashes of defeat in the spring of 1945 with her war machine grinding to a halt, due in part to its lack of oil.

Next month, some concluding comments regarding the indispensability of petroleum in successfully waging World War II.

Readers are encouraged to submit brief, ostensibly true stories about notable personalities from our industry’s storied past. Submissions should be e-mailed to contest@spe.org.

History Quiz

Name the two _______ (fill in the blanks) Creek fields, both discovered in 1908, one of which opened up major oil production in our own backyard and the other which became the first significant oil field in another western state. Hint: The nearby field was not the Lake Creek field.

If you would like to participate in this month’s quiz, e-mail your answer to contest@spe.org by noon, November 15. The winner, who will be chosen randomly from all correct answers, will receive a $50 gift certificate to a nice restaurant.

Answer to Octobers’s Quiz

In the late 1950’s the C.U.S.S. Group operator consortium was formed to, among other things, cooperate in the development of some novel offshore drilling techniques. The four operators that made up the C.U.S.S. Group were: Continental, Union of California, Shell and Superior.

Answer to Septembers’s Quiz

The Indian word with a French spelling, Piceance, actually means “tall grass,” as describing this particularly rugged and isolated area in Colorado near the Utah state line.

Congratulations to September’s winner – Yvonne Scherz with Citation Oil & Gas