I would further point out, however, that in my opinion it is most desirable and most important, both for the Federal Government and for the communities or political subdivisions interested, that provision be made, as in section 5 of the pending bill, for time payments on the capital cost of the project, thus constituting in a way these communities or political subdivisions as partners with the Federal Government in the enterprise and greatly reducing the capital outlay required from the Federal Treasury. Mr. BARBOUR. Have you made any estimate of the time when the Government would be fully reimbursed by the sale of power? Professor DURAND. An annual charge of 23 per cent invested on a sinking fund basis at 5 per cent interest would provide for the retirement of the bonds in a period of about 23 years. Section 5 of the pending bill provides for distributed annual paymen's covering capital cost in 25 years. I believe that the territory interested in this project will be eager to take power from this source at figures which will insure the repayment of the capital expenditure in a period of 25 or 30 years, and including as well, all interest charges on the same. Regarding the matter of oil reserves I would like to mention one further point, and that is that there is in that section of the country, immediately tributary to the Colorado River, a consumption of oil annually of something like 13,000,000 barrels by the railroads. That is one item which apparently could be wiped off the slate of consumption, once we bring about the utilization of electrical power by the railroads which, of course, is contemplated as one of the definite features of the market for this power. In addition to that something like 4,000,000 barrels are being burned under boilers in miscellaneous ways, making at the present time an aggregate of 17,000,000 barrels that could be immediately saved. This figure of 23,000,000 barrels per year represents therefore a very definite and important item of saving, having in view our total California reserves of something like 2,000,000,000 barrels. Or again, looking beyond the Boulder Canyon project to the total power possibilities of the Colorado River, we should have a total fuel oil equivalent of some 10 times as much or 230,000,000 barrels per year, which is something more than one-tenth of the entire reserve of fuel oil in the California region at the present time. All these things drive home, it seems to me, the very great importance of realizing at the earliest practicable moment this vast undertaking of national conservation. There are many other points of which mention might be made, but I will not take up the time of the committee further. Mr. SWING. I will ask permission that the statement of the Geological Survey be made a part of the record." Mr. SINNOTT. Without objection, that may be inserted in the record. We are very much obliged to you, Professor, for your very interesting and instructive statement. (The statement of the Geological Survey is as follows:) THE OIL SUPPLY OF THE UNITED STATES-ESTIMATES MADE BY THE COUNTRY'S FOREMOST OIL GEOLOGISTS. A review of the producing, probable, and possible oil-bearing regions in the United States by a joint committee composed of members of the American Association of Petroleum Geologists and of the United States Geological Survey has resulted in an inventory estimate that 9,000,000,000 barrels of oil recoverable by methods now in use remained in the ground in this country January 1, 1922. Unlike our reserves of coal, iron, and copper, which are so large that apprehension of their early exhaustion is not justified, the oil reserves of the country, as the public has frequently been warned, appear adequate to supply the demand for only a limited number of years. The annual production of the country is now almost half a billion barrels, but the annual consumption, already well beyond the half billion mark, is still growing. For some years we have had to import oil, and with the growth in demand, our dependence on foreign oil has become steadily greater, in spite of our own increase in output. It is therefore evident that the people of the United States should be informed as fully as possible as to the reserves now left in this country, for without such information we can not appraise our probable dependence upon foreign supplies of oil, on the expanding use of which so much of modern civilization depends. Fortunately estimates of our oil reserves can be made with far greater completeness and accuracy than ever before. During the last eight years a large part of the territory in the United States that may possibly contain oil has been studied in great detail by oil geologists; wildcatting has spread through "prospective' into many regions of "possible' and locally even into regions of "impossible'' territory; old fields have been definitely outlined and new ones discovered; and finally, improvement in methods and special training in the calculation of oil reserves and of the depletion of oil properties have been developed to meet the requirements of the tax laws. Accordingly, in order that the public may get the fullest benefit of this newly available information, the United States Geological Survey in March, 1921, invited the American Association of Petroleum Geologists to cooperate with it in a review of the producing, probable, and possible oil territory of the United States and in the compilation of an estimate of the petroleum remaining in the ground and recoverable by present methods. This invitation was promptly accepted by the association, which designated a number of its ablest members of well-known wide experience, good judgment, and high professional standing to serve with the oil geologists of the survey as members of a joint committee. The committee responsible for the original preparation of the estimates and finally for the adjustment and revision of the results in joint conference comprised F. W. DeWolf, State geologist of Illinois; W. E. Wrather, of Dallas, Tex.; Roswell H. Johnson, of Pittsburgh, Pa.; Wallace A. Pratt, of Houston, Tex.; Alexander W. McCoy, of Bartlesville, Okla.; Carl H. Beal, of San Francisco, Calif.; C. T. Lupton, of Denver, Colo. Alexander Deussen, of Houston, Tex.: K. C. Heald, of Washington, D. C. and G. C. Matson, of Tulsa, Okla., all representing the American Association of Petroleum Geologists; and, for the Federal Survey, David White, chief geologist, chairman; W. T. Thom, jr., A. E. Fath, Kirtly F. Mather, R. C. Moore, State geologist of Kansas, and K. C. Heald. Mr. Heald represented both the survey and the association. These men were assisted in subcommittees by a large number of the leading oil geologists of the country, including oil-company geologists, directors of State geological surveys, and consulting geologists, who were especially familiar with the regions considered. All these cooperated whole-heartedly in the canvas of our oil reserves, and many oil companies also furnished confidential data for use in the preparation of estimates. The calculations of the oil reserves in the proved and discovered fields are reasonably reliable, and those for regions regarded by the geologists as embracing “probable 'future oil fields are based on all the available data and are entitled to high respect, but the committee wishes it most clearly understood that the estimates of oil in "possible" territory are absolutely speculative and hazardous and that, although they represent the best judgment of the geologists, they nevertheless may be, at least in part, wildly erroneous. The questions involved are not only how much a particular doubtful region will yield, but whether it will furnish any oil whatever. On the whole the estimates are undoubtedly the best that have ever been made for the United States and better than have hitherto been prepared for any oil country or district of the world. The estimates for local areas, fields, or districts have been consolidated by States, groups of States, or broad regions in the case of nonproductive States. sissippi.... Estimated oil reserves of the United States, by States or regions. Kentucky, Tennessee, northern Alabama, and northeastern Mis 175, 000, 000 Missouri, Iowa, North Dakota, Wisconsin, and Minnesota. Eastern Gulf, Coastal Plain, and Atlantic Coast States.. Total.... 40, 000, 000 425, 000, 000 1, 340, 000, 000 525, 000, 000 670, 000, 000 2, 100, 000, 00050, 000, 000 525, 000, 000 100, 000, 000 80, 000, 000 1, 850, 000, 000 10, 000, 000 9, 150, 000, 000 The New England States are regarded as too unpromising to deserve consideration. Most of the northern peninsula of Michigan and the State of Minnesota are placed in the same category. The small quantities allocated to some other States indicate how little hope these geologists have of finding extensive oil fields in them. Some of these very doubtful regions will give no oil, but others will make good the deficiencies. The estimates are as a whole distinctly conservative. Of the total estimated oil reserves of the United States, amounting in round numbers to 9,000,000,000 barrels, 5,000,000,000 barrels may be classified as oil in sight and 4,000,000,000 barrels as prospective and possible. Rather more than 4,000,000,000 barrels should be assigned to the heavy-oil group. These oils will be recovered mainly in the Pacific Coast, Rocky Mountain, and Gulf States. The contents of the Lima-Indiana region, which yields oil of a distinctive type, are estimated at 40,000,000 barrels. In general, the so-called paraffin oils of moderate and high grade, as contrasted with the heavier oils, amount in all to about 5,000,000,000 barrels. The estimated reserves of high-grade oils of the Appalachian States are about 725,000,000 barrels. The estimated reserves are enough to satisfy the present requirements of the United States for only 20 years, if the oil could be taken out of the ground as fast as it is wanted.. Should these estimates fall even so much as 2,000,000,000 barrels short of the actual recovery, that error of 22 per cent would be equivalent to but four years' supply, a. relatively short extension of life. However, the committee expressly decries the too frequent assumption that inasmuch as the estimated reserves appear to be sufficient to meet the needs of the country at the present rate of consumption for 20 years, therefore the reserves will be exhausted at the end of that time or, at most, a few years later. This assumption is absolutely misleading, for the oil pools will not all be found that length of time, drilling will be spread over many years, as the pools are found, and the wells can not be pumped dry so quickly. Individual wells will yield oil for more than a quarter of a century and some of the wells will not have been drilled in 1950. In short, the oil can not all be discovered, much less taken from the earth, in 20 years. The United States is already absolutely dependent on foreign countries to eke out her own production, and if the foreign oil can be procured, this dependence is sure to grow greater and greater as our own fields wane, except as artificial patroleum may be produced by the distillation of oil shales and coals, or some substitute for petroleum may be discovered. 9966 99 66 All the estimates except those for one region, noted below, include only the oil recoverable from the ground by present methods, but it is practically certain that thẹ percentage of oil to be recovered from the American oil fields will be vastly increased by the application of new and improved methods of recovery. At present, however, this phase of production may be regarded as in the experimental stage. Little has benn definitely determined as to the applicability of "air pressure, 'water drive," "gas pressure,' vacuum extraction," and other new methods to different regions, with their variation in conditions, or to the increase in production to be counted on from the use of these methods. The committee therefore feels that at present any estimates of such possible additional recoveries would probably contain errors enormously greater than those inherent in the estimates made on the basis of methods now in use. In only one region are the geologic conditions so well known and the experience with improved methods on a commercial basis so extensive and so long continued as to justify the formulation of estimates based on the results obtained. This is the region in northwestern Pennsylvania and southwestern New York where the "water drive" is now employed to obtain oil from the Bradford sand, which was supposed to be largely exhausted. Under the peculiar conditions there the use of this method will result in the recovery of a large quantity of oil that can not be recovered by ordinary methods of production. Allowance for the additional oil thus recovered has therefore been made in the estimates. It has already been found, however, that this method is not applicable to some other districts, and accordingly no allowance has been made for possible additional recovery through its use where its suitability to the local conditions has not been actually demonstrated. In the light of these estimates as to the extent of our supplies of natural petroleum, the joint committee points out the stern obligation of the citizen, the producer, and the Government to give most serious study to the more complete extraction of the oil. from the ground, as well as to the avoidance of waste, either through direct losses or through misuse of crude oil or its products. (Thereupon the committee adjourned to meet to-morrow, Thursday, June 22, 1922, at 10.30 o'clock.) |