CHAPTER TWO

FUELS

The most important mineral products of California are its fuels. This subdivision includes coal, natural gas and petroleum, the combined values of which make up approximately 50 per cent of the State's entire mineral industry. Comparison of values during 1913 and 1914 is shown in the following table:

Reference: State Mineralogist Reports VII, XII, XIII.

Coal has been produced in California since as early as 1860, but the quality is not high, most of it being lignite. In competition with fuelcil, coal of all grades has had to give way, and the low-grade domestic product has suffered severely.

During 1914, there was a production reported from Amador, Contra Costa, Monterey and Siskiyou counties, totaling 11,859 tons, worth $28,806, most of it, however, coming from Amador and Monterey counties.

Since 1887, the annual output of coal has been as follows:

Natural Gas.

Reference: State Mineralogist Reports VII, X, XII. Bulletins 3, 6, 19, 69.

Statistics on the production of natural gas in California are but little better than a guess. The figures here given are certainly far below the actual production, particularly in the six oil-producing counties. It is an exceptional oil property where gas in some quantity does not occur. Many oil producing concerns make no mention of their gas, because they have no method of measuring it, and it is so widely used in the oil fields that it is frequently as lightly regarded as sunshine or fresh air. Doubtless, considerable gas is wasted, but a sweeping condemnation of operators should not be indulged in. It must be remembered that several of our important oil fields are removed many miles from the site of any other industry, and that the gathering of small amounts of gas and transporting it for any considerable distance, may not always be profitable. However, it is undoubtedly a fact that greater saving can frequently be made with profit. Gas traps of various size and design are coming into more frequent use. Some large operators are making commendable efforts to conserve the gas which accompanies oil and is richer than the so-called. "dry gas" occurring in strata which do not produce oil.

It will be noted that several counties produce gas which is not accompanied by oil.

The value of gas as here shown is open to considerable question but is certainly not too high. The average price is about 6¢ per 1,000 cubic feet. Seven thousand cubic feet of gas is about equal to one barrel of oil in heating value, and is so accounted for by many operators.

The annual production of natural gas in California since 1888 is as follows:

Reference: Bulletins 3, 11, 16, 19, 31, 32, 63, 69; State Mineralogist
Reports IV, VII, X, XII, XIII.

Chief of the fuels of California is petroleum. A complete description of the industry is to be found in Bulletin 69, recently issued by the State Mining Bureau.

In preparing the statistics for the year 1914, several sources of information were available for comparison and use. Several marketing concerns issue carefully prepared monthly statements of gross production in each field, and this department gathers figures on price and other matters, directly from oil producers. The figures here given on gross production and monthly operations, are largely those published by the Independent Oil Producers Agency, and the figures showing well operation by fields are from the Standard Oil Company. Segregation of figures by counties can be made directly from field reports in all cases except for Los Angeles and Orange counties, where the fields. cross county lines. Figures on price are open to some question, as it must be remembered that a large portion of the oil does not enter the open market, but is consumed or refined directly by the producers. The prices given are averages for the oil which is actually sold.

The business of producing oil is not so profitable as it should be. Many operators continue to drill wells when there is not a great demand, and the over-production, of course, depresses the price. Just profits and stable conditions are more nearly assured to the producer who is able to refine and retail his product. Realization of this fact is apt to lead to the formation of larger and stronger business units in the future. Doubtless, undue obstacles will not be placed in the way of

such changes, if they are carried out with reasonable regard to public welfare. The fact can not be too strongly emphasized that our oil resources are far from inexhaustible, and that needless production hastens the day when we shall stand stripped of one of our most valuable assets. Raising oil from the ground and selling it at a price too low to return the invested capital with interest, is about the same as drawing gold from a savings account and disposing of it at a discount. As in most lines of human endeavor, some operators have entered the oil business with more thought and preparation for the future than have others.