:

}

; By PHILIP

| BOLSOVER

BEFORE the Second World

i } War the deserts of the Mid-

“Ble East produced 100 million
barrels of oil a year. Thirteen

years later, in 1952, the figure
Was 762 million barrels.

__ And in the countries of the
/Middle East — Iran, Iraq,
"Saudi Arabia,.the sheikdoms
Hof the Persian Gulf — ever in-
Pcreasing numbers of people
Phad become aware of two
reat facts: the - fabulous
Wealth beneath the earth they
‘trod and the foreign chains
thet wealth had brought.

: These are the basic reasons
for the swift emergence in a
)1€w years of the Middle East
) a8 the most explosive political
Berea in the world. Oil is in-
flammable. When it is mixed
f With Arab nationalism it soon-
Cr or later produces an explo-
Slon that shakes the very
foundations of imperialism.

' Fundamentally, this is the
Me of the present Suez
Canal crisis in which oil is
Mentioned as frequently as
ethe name of Col Nasser,
‘ Egypt's president,
| The balance of oil has shift-
1 €d. In the 19th century the
Centre was in the United
; States. At the turn of the
century Russia came into the
Bares just before the First
“a War Mexico startled
€ world. After that war the
Move to the Middle East began
—first Iran, then new areas
®Cding more and more weight
until the enormous recent dis-
Ceveries in Arabia and Kuwait.

By 1954 the Middle East was
Beran to have more than half
& world’s proved oil reserves

utside the Soviet Union, com-
Pared with America’s quarter.
est remarkable of all, Am-
Tica herself had become an

f

‘the oil racket

GREAT. 7
STATESMAN
FACADE. |

importer of oil, facing exhaus-
tion of her own wells in 14
years if no new domestic
sources are discovered. Which
is another reason for the po-
teutial explosiveness of the
Middle East under growing
U.S. exploitation.

In the preceding half-cen-
tury seven mammoth oil
corporations — two British,
five American — had emerged
from a jungle warfare of pro-
fiteering to dominate all oil
outside the Soviet Union.

Standard of New Jersey,
greatest of all; Socony-Vac-
uum; Gulf Oil; Texaco; Stand-
ard of California, are the U.S.
firms; Royal Dutch Shell and
British Petroleum the British.
They each have trade turn-

Medierancan sea”

eR es 50
Aalerasceenetattrnana reesei
{STATUTE MAES

nd Suez is

ew

overs exceeding the total bud-
gets of all but the largest coun-
tries. They have the kind of
power that controls and over-
throws. the most powerful of
governments — including the
U.S. government — in the
sphere of the U.S. firms.

Between them, in their
greed for profit, they pillaged
end criminally wasted one of
the greatest assets of mankind.
Their record is set down in
an important new book, The
Empire of Oil, by an American
expert, Harvey  O’Connor,
whose studies of American
economic history are well-
known.

In America the big com-
panies and the many thousands
of-small “wild cat” firms have
drilled between them about
a million wells and only 400,-
000 of these are now produc-
ing oil, mostly in driblets of
a few barrels a day. The loss
in wasted capital for unneces-

sary wells is estimated to be -

at least five thousand million
dollars.

More important, needless
wells, releasing subterranean
gas that forces oil to the sur-
face, have left a great propor-
tion of the oil irrecoverable.
With the gas gone — and itself
wasted — there is nothing to
push up the oil.

Of the first 24,000 wells
drilled in the East Texas oil-
field from 1900 onwards, at
least 21,000 were unecessary,
according to the U.S. Nation-
al Resources Planning Board.

*

In 1915, the U.S. Bureau of
Mines estimated that 80 to
90 percent of the oil was being
left in the ground. Today
about a third of the oil is
brought to the surface by
greater control and improved
drilling methods.

Most of the early wastage
was caused by sheer greed —
by a reckless race for profits
in which companies large and
small bored frantically on the
edge of rival areas to steal
each other’s oil, each trying
to drain the local underground
lake before his competitor.

In the marketing of oil,
waste has been equally great.
Though prices are tightly con-
trolled everywhere and no one
campany may undercut an-
other in this ring of profit-
makers there is considerable
competition in provision of
“services.”

For instance, a survey in
€zlifornia showed that of 12,-
600 gasoline stations 8,600
were unnecessary.

Harry S. Sinclair, leading
oil magnate, said: “We have
overbuilt service stations,
wasted manpower, cross-

PRESIDENT NASSER

hauled millions and millions
cf unnecessary miles and
thrown away hundreds of mil-
lions of dollars in marketing
expenses.”

You pay for the oil men’s
greed and waste every time
you buy a bus ticket. You
pay for it in the cost of goods
transported by road and diesel
locomotives. Somewhere in
everything you buy there is
a charge for the wasteful greed
of the oil men.

The Middle East is at this
moment the world’s greatest
source of oil though untapped
reserves in the Soviet Union
are believed to be even greater.
And production in the Middle
East is quicker, cheaper than
in America; 1952 statistics
showed that while the average
U. S. well dribbled 12 bar-
rels a day the Middle Eastern
wells gave 5,000 barrels. More-
over, Middle East labor is far
cheaper.

Nevertheless, Middle East-
ern oil has never been allowed
to be sold cheaper than U.S.
oil, whether it is produced by
a British or an American com-
pany. And the pricing arrange-
nents are so complicated that
even the British government’s
representatives in.the British
companies cannot calculate
the true cost of production, or
separate dollar from sterling
costs.

Standard of New Jersey had
an income of $585 million in
1954 Royal Dutch Shell made
$377 million. In 1952 the in-
dustry’s profits were the high-

est ever gained by any indus- .

try in any year.

And a growing proportion of
this tide of wealth comes from
the Middle East.

August 17, 1956 —PACIFIC TRIBUNE — PAGE Il

Eut the

Middle
countries want —

Eastern
and are
getting — more and more of
the tide. Most of their share
is at the moment. going into
the pockets of rapacious kings
end sheiks. But not all. Slow-

ly it is affecting more and
raore people.

And quite rapidly the con-
sciousness of this wealth, the
growing “knowledge of the
bonds imposed -by Western
nations for the sake of oil,
is changing the political clim-
ate of the Middle Eastern

» countries. The demand for na-

tional freedom and control of
national wealth grows louder
and fiercer.

But the Western demand for
oil grows more insistent.

And the clash between these
factors is “the Middle East
crisis’ — of which the Suez
Canal crisis is only a part.

pa

DULLES