The Dominion. THURSDAY, APRIL 7, 1921. THE OIL CONTROVERSY

Dominion, Volume 14, Issue 164, 7 April 1921, Page 4

The Dominion. THURSDAY, APRIL 7, 1921. THE OIL CONTROVERSY

Although at the moment the United States is at issue with the Allies over the control of oil measures in Mesopotamia, it ought to bo comparatively easy, to remove this question from the region of debate. Wide publicity has been given in America to assertions that Great Britain is intent on establishing monopolistic control over the World’s .future oil supplies, but apparently no serious attempt has been made to give such charges detailed shape or support them with evidence. The American Government’s latest Note on. the subject (summarised in one of to-day s cablegrams) alleges that Britain and France, in their action regarding the division of Mesopotamian .oil supplies, have “violated the spirit of the mandate principle.” Available information goes to. show that this statement is quite inaccurate. The draft of the British mandate over Mesopotamia, which was published earlv in February, provides that there shall be no discrimination against foreign States in the oil enterprises. Apparently American dissatisfaction rests on the fact that before the war British and French operators had secured extensive oil concessions in Mesopotamia.. These concessions are still recognised by the Allies, and in normal course will remain valid under the operation of the mandate, but the circumstances arc very far from representing a combination by the'French and British Governments to . control oil supplies in Mesopotamia. The-, immediate problem in Mesopotamia is not to tap oil measures, but to set up a stable Government, which will be able to maintain order. The present policy of the British Government is to cut down the. army of occupation, and in the circumstances thus created it may be difficult or impossible to work the oilfields. A special correspondent of the London Times, writing from Bagdad at the end of January, declared that if Great Britain evacuated the territory north of Basra, all British business would leave the country and the oil wells would be abandoned. Commenting on these statements, the- Times observed that the British taxpayers are determined not to pay tffie cost of a garrison in Mesopotamia for the sake of protecting oil wells. The agreements embodying British and other interests in the oilfields of Mesopotamia were drafted before the war. They assumed that the work of development would be undertaken under an indigenous administration, and that assumption must continue to prevail. In other quarters some suggestions have been made that the outlay incurred bV Britain as mandatory, in defending Mesopotamia and setting up a stable form of native government might be met by a tax imposed on the revenue from the oilfields. The outlook from this standpoint is somewhat uncertain, but it seems quite clear that if the United States is in any respect at a disadvantage where Mesopotamian oil supplies are concerned the fact must be attributed to a pre-war failure in commercial enterprise on the part of her own citizens and not to any misuse of power by the Allies. In any case the fact that American oil companies find themselves forestalled in one possibly rich field (the actual scope of the Mesopotamian deposits has not yet been determined) in no way justifies the apprehensions expressed in. the United States. that Britain is intent on monopolising the. world’s oil supplies, and “has utilised the war in order to prepare for exclusive control of oil .reserves”. As Loan Cubzon has pointed out in denying this accusation, the United States herself controls 80 per cent, of the world’s oil. Two-thirds of . the world’s total production is derived from wells within her own territory, and she also obtains large supplies from Mexico, which arc capable of being enormously increased. Dur-

ing 1920, the production of oil in the United States was 445 million barrels, an increase of 67 million barrels over the output of the previous year. When the Mexican output of 155 million barrels is added, the total obtained from all. other sources is comparatively unimportant. Since many of the Mexican companies are American owned or controlled, the United States actually occupies the position of monopolistic control Britain, is accused of b.eing anxious to attain, and she is certainly in no immediate danger of losing this position of. advantage. Geologists estimate that the remaining life of her known oilfields is from 30 to 40 years, and account has to be taken' of the likelihood of new fields being opened, and also of the existence within her territory of rich shale deposits which have yet to bo exploited. The Mexican fields also arc capable of enormously increasing their output. Last year’s output in Mexico doubled that of tJio previous year,. but this is only a beginning. Writing in the annual financial and commercial review published by the London Times in January, a correspondent stated that the daily production from Mexican oil wells in May of last year was 2,177,781 barrels. “If,” he added, “facilities were available for the exploitation of the total production, Mexico could thus already supply the world with 794,890,065 barrels of mineral oil annually.” This is more by sixty per cent, than the whole world produced in 1917. and nearly twice the current annual production in the United States. At a wider view American apprehensions based on the present position in Mesopotamia appear still more groundless. The oil reserves of. the world.are of vast extent and widely distributed. It is stated, for instance, that the shales in America have as big . an oil content as the whole American petroleum resources. Big deposits of oil and shale are now being tapped in many parts of South America, “and Asia is immensely rich in liquid fuels from Japan to Arabia.” Looking ahead, account must bo taken also of the production of power alcohol and of synthetic liquid fuels. According to one recent writer on the subject: “The day assuredly will come when every country will be able to generate its own fuel.” Looking only at ascertained facts it is evident that the United States is bound to dominate the world’s oil industry for many years to come. This is so obvious that it seems necessary to seek some underlying and undisclosed motive for the palapably artificial agitation in regard to the Mesopotamian fields and Britain’s allegedly nefarious designs. This motive is perhaps indicated in the report on motor fuel supplies lately presented by a sub-committee set up by the British Standing Committee on the Inves-. tigation of Prices.’ The sub-com-mittee reported in part that control of supplies was “dangerously concentrated in the hands of two world-wide combines—the Standard Oil and the Royal Dutch Shell groups—” and that nothing less than Government action could affect “this alarming situation.” As remedies. the sub-committee recommended combined action among tbe consuming countries of the world through the Economic Section of the League of Nations, and the production of substitutes and the adoption of alternative sources of power. It seems rather probable that the Mesopotamian agitation in the United States is largely explained by the anxiety of the powerful oil interests. in that country to distract attention from their own operations and the necessity of bringing them under control.