Editorial Comment

August 1999 Vol. 220 No. 8 Editorial Thomas R. Wright, Jr., Editorial Director In perspective As the U.S. active rig count drifted down to

August 1999 Vol. 220 No. 8
Editorial

Thomas R. Wright, Jr.,
Editorial Director

In perspective

As the U.S. active rig count drifted down to record lows last April, we knew it was going to be a terrible year for the industry, but we didn’t realize just how terrible until we began preparation of the special reports that follow in this issue.

How bad is it? Well, it’s so bad that we had to dig back through old issues of World Oil’s predecessor, The Oil Weekly, to find a year when drilling was lower in the U.S. We’ve disregarded outside U.S. drilling since the numbers weren’t readily available that far back. What we found was that drilling hasn’t been as low as currently predicted for 1999 since 1933 when only 12,170 wells were drilled in the U.S.

However, when perusing the 1933 issues of The Oil Weekly, what struck us was how different things are now from then. For example:

	1933	1999
U.S. economy	In midst of Great Depression	Current peace-time expansion is largest ever
January oil price, WTI	$0.50	$10.00
July oil, price, WTI	$0.30	$20.00
Price influences	East Texas field recently discovered; over-production rampant; proration established	Oil traded on commodity markets; OPEC reasserts production quotas
U.S. oil production	2.6 million bpd	5.9 million bpd
Texas oil production	1.1 million bpd	1.5 million bpd
Unreported (illegal) E. Texas field production	100,000 bpd	None (we hope)
Business environment	Standard Oil Trust dissolved 22 years earlier	“Standard” companies re-merging
U.S. petroleum demand	2.5 million bpd	18.4 million bpd
U.S. oil supply
Domestic	2.4 million bpd	5.8 million bpd
From imports	69,000 bpd	8.4 million bpd
World oil production	3.9 million bpd (in 1930)	73 million bpd
Favored international communication method	Telegram	E-mail

The first meeting of the World Petroleum Congress was held in London in 1933 after being conceived and organized by the Petroleum Technologists, a British body of oil scientists incorporated in 1914. Prior to this meeting, the nearest approach to such a gathering took place in Germany in 1912 under the name Internationale Petroleum Kommission. However, it was later derailed by World War I.

During the 1933 confab, a Mr. Kessler, managing director of Royal Dutch Shell, presented his address in the lecture theater of the Royal Institution (which corresponds to the American National Academy of Science). For the speech, "both speaker and audience (were) in formal dress, with decorations, surrounded by the paintings and handiwork and memories of some of the world’s most famous scientists." This sounds substantially different from the Offshore Europe International Conference that will be held next month in Aberdeen.

There is also a substantial difference in humor between then and now. For example, an automobile story included in that 1933 issue of The Oil Weekly went something like this:

"A recent invention by Wendall Fathers, famed for motor car attachments, is the Oral Speedometer, which operates with a phonographic attachment, providing the following warnings:

"At 25 mph — The city speed limit has been passed. Is there a motorcycle policeman behind you?

"At 35 mph — Too fast for city driving. Hope you are in the country.

"At 45 mph — Your car is still under control, but watch the car behind the car ahead of you.

"At 50 mph — Your responsibility is increasing; keep your eyes on the road.

"At 60 mph — Are your insurance premiums paid to date?

"At 70 mph — You drive; this attachment will do the praying.

"At 80 mph — Probably someone will have this car repaired. If so, we thank you for the sale of another speedometer to replace this one, which in a few moments, is going to hell with you."

Obviously, whoever composed that story would be astonished at the speeds we now travel on the Interstates and Autobahns.

Today’s humor, (sent via e-mail, incidentally) might be represented by the following:

Bill Gates reportedly compared the computer industry with the auto industry and said: "If GM had kept up with technology like the computer industry has, we would all be driving $25-cars that got 1,000 miles per gallon."

In response to Gates’ comments, General Motors reportedly issued a press release stating:

"If GM had developed technology like Microsoft, we would all be driving cars with the following characteristics:

"For no reason whatsoever your car would crash twice a day.

"Occasionally your car would die on the freeway for no reason, and you would just accept this, restart and drive on.

"Occasionally, executing a maneuver such as a left turn would cause your car to shut down and refuse to restart, in which case you would have to reinstall the engine.

"Only one person at a time could use the car, unless you bought Car95 or Carnet, but then you would have to buy more seats.

"The oil, water temperature and alternator warning lights would be replaced by a single ‘general car default’ warning light.

"The airbag system would say, ‘Are your sure?’ before going off.

"Occasionally, for no apparent reason, your car would lock you out and refuse to let you in until you simultaneously lifted the door handle, turned the key and grabbed hold of the radio antenna.

"You’d press the start button to shut off the engine."