Vol. XVIII, No. 5 June, 1944 A Monthly Summary of Economic and Business Conditions in Texas lh I he Staff of the Bureau of Bu sine!'~ Research, The University of Texas F. A. Buechel, Editor. i · 0q..Q. ~~i ~~ DALLAM rHERMAN! ~<$-~ -1-~ i q4'0 . . I+'" loc.; ·..J­ -·-·-·-·-T-·-·1·-·-r·-·-!·-·-.>­ HARTLEY ! MOO RE j~~J~NjROBERTe! ~q~ . I . . I~'° ·-·-·-·-·-.·-·-·-+-·-+·-·-·-j·-·-·­ 1 I · · • ._<>­ OLDHAM j POTIER . CARSO N! ORAY ~ ~<;,<;," ·-·-·-·-·-·\-·-IQ---0~~-·-·-t-~z" DEAF SMITH IRAHOALLI ~6,..~ ! OONLEY j -:.-v\_°i:t ·-·-·-·-·-.i.·-·-·-~~._.J___,_. t:'.'~-­ i i I I I PARMER iCASTRO i&WISHER jBRISCOEj HA.LL ic~R~ss ·-·-·f·---·-i·-·-·_,L.-.-.l.-·-"tj.-·-· i ! i ! i BAILEY ·, UM8 ! HALE j FLOYD ~OTLEY.I CO . ! . ! . ~""1 • i .o, ,.r..+fl-+40CKLE~LUBBOCK· CROiBY ! Cl~ l(INQ. "' I I I 1· +~ ·CRUD£· OIL PDO·T)UCTI 0 JJ • Dl5TRICT5 or: TE.XAS • TE xA ':I • IV.I L.1'2 OAI) . co~t.415SI OIJ . ,.,.,._........ ·-·--r·-·-·r·-·-·;·-·-·1·-·-..-~-....-..­ "0"KUMI TERRY j LYHH j GARZA j KENT ___ .L._TL.-·,-i.·-~-,i... QAINE8 iDAWSON ieoRDE,J.8CURRY • j· I ·-·-·-·-·~·-·-·-·-·i·~·­ 1 !-!-'\. .i>> ANDREWS !MARTIN ! "f~O ! Cl..y<'( -...----.----..,..--,,_. ·-1-·-·-j'L.-.TL.-;_+.{-·_.____. j j ' WINKLE~ ECTOR iMIOLANDj # j ~ L U\.lOVINQ! j , ·J · ,t:-"v '! I 0 i,.,.-.L·-·-·-·-#1_.,.._-t;;:___J ; • WARD I I CULBERIM.IN , l......., jCRANE 1 ,,.....t,:··a·.. _,,>?·....·~-," ; _,,. '· . • ,;1·' \IEFF DAVIS ).. PECOS ·-·-,,,.;'· ·,, ·-·-·---:'I ' '·, . i '· i BREWSU:R I i • eu n SAU • OJ:. 9USl l-JE55 . 1'2E5EAnC~. • u~1vans1Tv· OJ:· T&> year. Income from wheat for example is certain to be more than twice that received last year since the latest g wernment esti· mate is more than 60 million bushels, almost twice that of a year ago, and current farm prices are approximately $1.40 per bushel, or well above the price at this time last year. Over a period of years District 1-N has accounted for about three-fourths of the State's production of wheat. At prevailing prices and estimated production in this district, the 1944 farm cash income in district 1-N alone is expected to be approximately $60 million. If this estimate is borne out, it would amount to an average of nearly $5,000 per farm for wheat alon~ in district 1-N. :TREND OF FARM CASH INCOME BY PRODUCTS IN DISTRICTS 8 AND 9 BY PRODUCTS FROM 1927 to 1943 INCLUSIVE In each issue of the REVIEW from January to May, tabulations have been included on the trend of farm cash income in Texas by products from 1927 to 1943 inclusive. In the January issue of the REVIEW these data were given in a tabulation for the State as a whole and in the subsequent issues, through May, similar data were given for each of the following crop reporting districts:-1-N and 1-S in tl}.e February issue; 2 and 3 in the March issue; 4 and 5 in the A,pril issue; 6 and 7 in the May issue. The tabulations on page 23 give corresponding information for districts 8 and 9. A chart delineating the crop reporting districts with the names of the counties included is shown on the outer cover page of the May issue of the REVIEW. In both districts cash income from cotton in the early '40s has been sharply below that of the late '20s while cash income from cottonseed has been relatively well maintained becaus~ of the higher price level for this product during recent years as compared with the late '20s. Both districts show marked increases in cash in­come from calves, poultry, eggs, milk, and milk products. During the past two years a substantial cash return has been received in district 8 from the sale of peanuts, a development in response to the government's needs for fats. The most distinctive characteristic of agriculture in district 9 is the rice industry, the cash incom~ from which has grown from $7 million in 1927 to $28 million in 1943. F. A. BUECHEL. TEXAS BUSINESS REVIEW ,. Subscription: One Dollar per Year. .~· For club rates on five or more subscriptions Address: Bureau of Business Research, The University of Texas, Austin Texas Oil Production In Regional Perspective "The State of Texas owes its huge wealth and modern-day prosperity to sea m11ds. shales. and sandntry. Production there­ after decreased, to as low as 9 million barrels in 1910 with the decline of the piercement-type domes, no new ones having been found in the meantime. Then with the opening up of fields in other sections of Texas, the State's output rose to 25 million barrels, in 1915, al­ though the 100 million barrel annual output was not attained until 1921. WoRLD WAR I AND NoRTH~CENTRAL TEXAS Production from the Pennsylvanian and Lower Ordovicwn It was during the period of World War I that interest in Texas oil resources began to crystallize. In Okla­ homa, the Bartlesville area, discovered in 1904, and such pools as Glenn and Cushing, discovered in 1904 and 1912 respectively, were going· strong in this period. However, the greatly increased demand for oil occa­ sioned by the war was bringing about fears of a shortage. Fortunately, the El Dorado, Kansas, field was brought in in 1917. This is one of the big fields of the United States, having produced 184,851,000 barrels to the end of 1943, and estimated to have a remaining reserve, The Oil and Gas Journal estimate, of 26,449,000 barrels as of January 1, 1944. In this connection fields with a total output of 100 million barrels are relatively rare in the world's oil industry. It might also be noted by way of comparison that the total for the El Dorado field is more than twice the total oil production of Japan to date. In North-central Texas, shallow production at Electra had been discovered in 1911; Burkburnett was dis­covered in 1919 and Electra "deep" production was found in the same year. Both Electra and Burkburnett are "buried hills" structures overlain by lenticular sands, and the early shallow production was from the Cisco formation of the upper Pennsylvanian. It is of impor­-tance to note that the exploration carried on by drilling at Electra and Burkburnett gave to t}:ie geologists by the early 1920's a knowledge of the Red River uplift­a buried series of folds of mountainous proportions­the axis of which parallels the trend of the Arbuckle­Wichita mountains of Oklahoma. The Red River uplift 01 upfold is a broad structure and is approximately 180 miles in length. The arch consists of pre-Cambrian granites iogeiher with Lower Ordovician limestone, broadly upfolded; ihe major structure is characterized by subsidiary domes and anticlines. The oil-bearing rocks occur on these subsidiary structural features (domes and anticlines) and in the sand lenses above and on the flanks of the main upfold. The Ellenburger limestone produces on structural highs in this district; Pennsylvanian production, much of which is from the Cisco and Strawn groups, is largely from lenticular sands. Accumulation of oil is condi­tioned largely by structural features; the structural accumulation is modified, however, by stratigraphic con­ditions, as by the pinching out of beds as they rise on the flanks of the structure. Irn the meantime, Ranger, in Eastland County, was discovered in 1917, producing from the Marble Falls lime~tone in the Bend group of the lower Pennsylvanian. The wells from the Bend Limestone had a high initial prodluction and their decline was very rapid. Other well known fields include Breckenridge, Stephens County, and Desdemonia in Eastland, Erath, and Comanche counties. Recogniiion of the existence of a marked unconformitv between the Bend and the higher Pennsylvanian group~, together with new facts attained by extension of drill­ing, gave increasing knowledge of the prominent struc­tural feature, together with its bearings on the ac­cumulation of oil and gas, in the Pennsylvanian of North-central Texas-the so-called Bend Arch, or Bend Flexure-on which Ranger, Breckenridge, as well as numerous other fields and patches of production are located. The first map of the Bend Arch, as we now know it, was published in the Oil Trade Journal, of Mav, 1918, by M. G. Cheney. The Bend Arch is a broad structural feature which modifies the prevailing westward dip of the Pennsyl­vanian rocks of North-central Texas. It extends for a distance of about 175 miles from just north of the Llano uplift to the central portion of Archer Countv. Its maximum east-west width is in excess of 10() mile'.c;. A summary of the Pennsylvanian in Texas is quoted from the U. S. G. S.: "The Pennsylvanian series in north-central Texas consists of a great succession of limestones, shnles, and sandstones. having a maximum thickness of nearly 6 000 feet; these have heen divided into the 'Bend,' Strawn, Canvon, and Cisco groups, named in order of age from oldest to youngest. These !!ronps have in turn been subdivided into many formations and mem­bers, and many of the oil-hearing beds, whi<'h form onlv small parts of formations or members have rereived special names because of their economic importanre. "Oil has been found in commerr·ial quantities in all four of the groups of the Pennsylvanian series, but the largest produrtion has come from the 'Bend group.' The Pennsvlvanian rorks have yielded oil in notable quantities in three pr(ncipal areas-north Texas, north-central Texas, and the Texas Panhandle. All these areas also yield gas in commerr·ial quantities. In the west Texas area the Pennsylvanian rocks lie deeply buried beneath younger r?cks and do not come to the surface within many miles of the 011 and gas fields; thus far they have not proved to be an im­portant source of oil or gas in that area." The K. M. A. field in Wichita County was discovered in 1931, with production from the Strawn, in the Penn­sylvanian. K. M. A. deep was discovered in 1940 with production from the Ellenburger. The K. M. A. struc­ture is a plunging anticline which branches off from the Red River arch. The K. M. A. field is the outstand­ing development in the entire area during recent years. K. M. A. had produced a total of 51,700,000 barrels to the end of 1943 but the estimated reserves are given as 228 million barrels. Electra and Burkburnett have each produced in excess of 100 million barrels; Electra had produced 146 million barrels and Burkburnett, 138 million barrels to the end of 1943. As to estimated reserves, however, Electra had only 14 million barrels and Burkburnett 12 million, as of January 1, 1944. Although different designations are given this entire district and its two subdivisions, the designations used herein are North-central Texas for the entire area, extending from the Llano uplift to Red River; North Texas for the portion along Red River and West-central Texas for the Bend Arch portion. In the Bend Arch fields all four groups of the Pennsylvanian yield oil, from depths ranging from 250 to 4,200 feet or more. All of the production comes from "minor structural features on the Bend Arch. These minor features in· elude anticlinal folds, anticlinal and monoclinal noses, lenses of porous sand in beds having a monoclinal attitude, and porous sand layers that merge into im­pervious materials up the dip. Oil has been found in this district in hundreds of such structural features." Total production for North Texas to the end of 1943 was 808 million barrels and the estimated reserves, as of January 1, 1944, were placed at 551 million. Total production for West-central Texas was 391 million bar­rels and the estimated reserves were put at 94 million barrels. The combined production for the entire North­central Texas area is almost 15 (14.7) per cent of the Texas total; the combined estimated reserves. however, amount to less than 6 (5.7) per cent of the Texas total. Shallow production preYails over the district at large, but as already noted, deeper production has been attract­ing increasing attention in the Red River area during recent years. AFTER wORLD WAR I Large production of oil in Texas after World War I had been preceded by three decades of fundamental geologic study and by twenty years of rather extensive exploration. Oil had been found at Corsicana in 1894, from shallow production of about 700 feet in the Naca· toch sand of the Navarro irroup, which is in the Upper Cretaceous. The great Balcones displacement had been known since the 1380's, but no one then dreamed of the complementary aspect of this fault zone to the east­ward or of the extension of the fa'.1 It svstem into the nor1heastern sector of the State. ' Furthermore, the sub-surface extension of the Wood· bine formation-the basal portion of the Upper Cre­taceous-which also had been named by Hill prior to 1900, was recognized, and, furthermore, the Woodbine was known to carry fresh water eastward from its out· crops in the Eastern Cross Timbers, even as far east as Corsicana. ·It was thought during the earlier period of its develop­ment that the Woodbine was the producing formation in the large Caddo field, on. the northwestern margin of the Sabine uplift, which had been producing since 1904; however, this has proved not to be the case. The western part of the Caddo field is in the northeastern part of Marion County, Texas; the eastern portion of the field is in Louisiana. The main oil producing hori­zon is now known to be in the Tokio formation, in an anticlinal structure, the Lower Cretaceous beds on which have been truncated by erosion; above the unconformity occur beds of the Upper Cretaceous. Also later knowl­edge showed that the water wells in the Woodbine in the vicinity of Corsicana were west of the great fault line. In 1920, Col. A. E. Humphreys, on the advice of F. Julius Fohs, a geologist, who for years now has been an independent operator, drilled at Mexia what was then a deep well-into the Woodbine sand at 3,100 feet; · The features of the Mexia-Powell fault line together with the associated structures were rapidly developed along this zone--Mexia, Powell, Richland, Currie, and Wortham. This was the period of the early 1920's. Two fields in this district are in the 100 million barrel group­ing. Powell has produced 116 million barrels to date and Mexia, 99 million barrels. The estimated reserves of these fields, however, are low-around 5 million barrels for each one. In 1922 oil was discovered in Luling, along the com­plementary fault line of the Balcones Escarpment, in what is now designated as the southern fault-line fields. The Woodbine sand does not extend this far south, and oil at Luling is produced from the porous (weathered? ) upper portion of the Edwards limestone of the Coman­chean, or Lower Cretaceous. Two wells at Luling encountered a schist bedrock at a depth of about 4, 750 feet. This schist is, of course, barren of oil. Production from Mexia and Powell, combined with the flush production of Smackover, Arkansas, discovered in 1922, and which reached its peak in 1925, together with the large production of Long Beach and Santa Fe Springs, California, both of which were brought in in 1921, gave rise to a considerable excess of production. One result of this new flood of oil was to run down the prices of crude oil in the middle 1920's. Reviewing briefly the trend in oil prices, which had started to climb in 1916, the average for the United States during 1920 was $3.00 a barrel, although an average of quantities of wide range really means but little. Pennsylvanian oil boomed to $6.10 a barrel on March 2, 1920, and Mid-Continent cru~e was selling at $3.50 a barrel. By 1925, however, the average p'i-ice for the United States had fallen to $1 93 a barrel. By 1924 such outstanding fields as Powell, discovered in 1923, and Luling, discovered in 1922 were going strong, and Big Lake was discovered in 1923; Huntington Beach, California, discovered in 1920, Santa Fe Springs, and Long Beach, both discovered in 1921, Salt Creek, Wvo­ming, discovered in 1908, Smackover, Arkansas, in 1922, together with Tonkawa, Oklahoma, discovered in 1921, and Burbank, Oklahoma, in 1920, all were at or near their peaks of production. During the next three years, large production from Spindletop deep, found in 1926, Yates, discovered in 1926, and Seminole, Oklahoma, in 1926, were added, and in 1927 the average price of crude had fallen to $1.30 a barrel. The year 1927 is especially important as it marked the beginnings of restricted pro­ duction, as a general policy in the oil industry. Of these Texas fields, Powell at the end of 1943 had produced 116 million barrels, and Big Lake had almost attained the 100 million barrel mark. Yates has proved to be one of the really big fields of the nation, having produced to the end of 1943 a total of 276 million barrels and with estimated reserves of 375 million bar­ rels as of January l, 1944. It is important to note that although organized pro­ ration was begun in the Seminole district in Oklahoma early in 1927, Seminole production continued, however, to expand; in 1928 Oklahoma City and Kettleman Hills in California were added to the list of big fields of the United States and Van came along in 1929. In that year production in the United States exceeded the bil­ lion barrel mark for the first time, and the average of crude prices stood at $1.27. Summing up Texas production during the decade of the 1920's, production steadily rose from 106 million barrels in 1921 to nearly 300 million barrels in 1930. Then came East Texas in 1930, followed by Conroe in 1931, and Tom Ball and Greta in 1933, and still later the development of deep production in the southern High Plains. All of these developments obviously led to greatly increased production in Texas. The State's output in 1931 was 332 million barrels and in 1937 it ex~eeded the 500 million barrel ~ark. For the past several years until 1943 Texas oil production hovered around 500 million barrels annually; in 1943 it rose to an all-time high of 593 million barrels. Price trends in this period need not be detailed, but the flood of oil from big new fields, together with the concept of potentials built up in connection with re­ stricte_d production ei:igendered a psychology as regards our 011 resources which has largely dominated our na­ tional thinking as to oil until the past year or so. WEST TEXAS AND THE PANHANDLE Production from the Permian and Lower Ordoviciu,n The scattered pattern of Texas oil production is a somewhat curious one, and to this day great belts or blocks of the State are characterized by the absence of o!l _or gas producti?n, whereas other areas are just as distmctly charactenzed by prolific production. This scattered occurrence of oil (and gas) resources conforms to the facts of distribution of minerals, all of which are irregularly distributed in the earth's crust the world over. This scattered pattern of oil occurrences was apparent even in the early days of development of the Texas oil industry. Seepages at S?ur Lake had been known long before the Spmdletop discovery. Gas seepages in the Petrolia field of Clay County seem to have been known as early as 1900. Oil had been found at Corsicana in 1894 and at Electra in 1911-in both cases at shallow depths, and in both cases while in drilling for water. Captain Lucas, following a "hunch," had drilled at Spindletop, but he picked a likely surface location. Oil was found at Caddo in 1904, although seepages in the vicinity of Caddo Lake had been known long prior to this time. But in West Texas and the Panhandle the situation was different indeed. In 1906, Charles N. Gould published "Geology and Water Resources of the Eastern Portion of the Panhandle of Texas,'' and in 1907, the companion paper on the western Panhandle. Although Gould was geologizing for water, he called attention in Water-Supply Paper, 191, U. S. G. S., to an anticline, the Amarillo fold, exposed in the Canadian River lowland in Potter County, north of Amarillo. At the time these papers were published-almost 40 years ago-no one seriously considered that western Texas could have either oil or gas in substantial quantities. But in 1918, under the aegis of the World War search for oil, and in the time of the Ranger boom, a wildcat well was drilled on the anticline which Gould had dis­covered. The location of this well was recommended by Gould at the time-but it did not strike oil. It was only the first gas well in what is now considered the greatest gas field in the world! But at that time it was oil that the drillers were after. The Panhandle gas field, following along the broad structural feature on the crest of the Amarillo uplift or the Amarillo Buried Mountains-apparently a prolonga­tion of the Wichita-Arbuckle mountains-is approxi­mately 120 miles long; the gas occurs in the higher part of the uplift. The gas producing territory, it has been estimated, covers more than a million acres. There is but one other natural gas field of similar production capacity known-the vast Hugoton field also in the Permian of southwest Kansas. And it may be that in time drilling will connect these two gigantic fields. Oil was discovered on the anticlinal structure in Potter County in 1921 although it was not until 1925­26 that intensive development of the field got under way. It is now proven that a large oil field-one of the big oil fields of Texas-occurs along the northern margin of the Panhandle gas field , on the gentle slopes of the gigantic structure. The oil fields extend along the north side of the Panhandle gas field for a distance of about 90 miles. Oil production in the Panhandle field is from the "granite wash" an accumu'lation of water-laid fragments of disintegrated granite, mainly along the flanks of the buried granite ridge, as well as from porous zones of a limestone group and from a dolomite member, mostly in the Permian. The granitic detrital material is considered by some to be Pennsylvanian in age. Normal marine limestones were laid down in late Pennsylvanian and early Permian during submergences, followed by evaporites deposited in desiccating seas. Red Beds with gypsum and anhydrite of the upper Permian were subsequently covered by continental deposits of the late Teritary and the Pleistocene. A still different picture had been painted for the Per­mian basin. The Triassic where it outcrops east of the High Plains is a continental deposit and the Permian section characteristic of west Texas was held to be a series of evaporites and red beds, and furthermore, since the evaporites, laid down in a desiccating interior sea could not possibly have had source beds from which the hydrocarbons could have been supplied in quantities sufficient for accumulation in oil and gas fields. As has been previously noted, Udden began his geologic work in Texas soon after the turn of the century. Udden's studies by microscopic examination of water well samples in Illinois were the first of their kind anywhere. After coming to Texas he was able to continue these studies on a larger scale, and he is now given credit for starting this fruitful and very significant field of subsurface research. Udden's discovery of potash compounds in samples from the deep water well on the Spur ranch near Spur, Texas, in 1917 was but one of the many results of this type of scientific investi· gation. Udden had also been engaged for several years on studies of geologic problems in the Trans-Pecos, as well as of the Glass Mountains and the Marathon Basin. In his "i\'otes on the Geology of the Glass Mountains," 1917, this master geologist wrote the following remark· able statement for the time, for it must be remembered that West Texas subsurface geology twenty-five years ago was a terra incognito. "We have here a geologic problem, the solution of which may be of decided economic importance .. .. The Comanchean lime· stones contain several sharply marked horizons that can be fol. lowed long distances in the southwest part of Pecos County, and in most of Upton, Reagan and Crockett counties. Quite accurate measurements of any structure present can certainly be made. It is, however, a region where very little work has yet been done, and in the absence of any accurate knowledge of the conditions involved, further speculations seem unprofit· able. We can only see that in the buried unconformity which certainly must exist between the lower folded series and the overlying merely gently folded or quite undisturbed sediments, there are natural chances for finding accumulations of gas as well as oil." At this plai:;e a quotation from an appraisal of Udden's studies, by another untiring investigator of Texas geologic problems, Alexander Deussen, is ap· propriate. Deussen, speaking on the campus of The University of Texas in 1925, said : "I am of the im­pression that the results of these studies have had far. reaching results. Casually I should mention that this splendid University plant which it is my privilege to enjoy today is in large measure the direct result of the fruitful labor of this untiring investigator. I seriously question whether The University of Texas has as yet given adequate recognition to the work that he has done." It should be borne in mind that the statements quoted from Udden were published in 1917-at a time when no commercial oil was known in the Permian Basin and a year before the gas discovery well was drilled in the Panhandle. Again it was the wildcatter who took the chance of finding oil in the Permian Basin. Leases were made in R~aqan Count~ on the trend suggested by Udden and dn!lm? began m what is now the Big Lake field in 1921. This. discovery well was completed in May, 1923. Pro· du~tion at Big Lake initiated a new wave of explorations which als_o afforded materials for wider geologic studies, all of which resulted in the bringino-in of a new crop of fields in West Texas-Yates, 1926; Hendricks, 1926; Hobbs, New Mexico, 1928; as well as McCamey, McElroy, Church-Fields, Howard-Glasscock, World-Powell, and others in the same period. The discovery well in West Te:x;as was Big Lake (shallow) in 1923. Deep produc· tion from the Ordovician at Big Lake was not ~evelop.ed until 1928. After a period of exploration and discovenes iii the late '20's and 'early '30's, a new crop of fields, some oi' them in the 100 million barrel class, . has been brougb.t in in the northern portion. of the Perm~an Basin -'whose production in the Permian porous hmestones is largely a function of ?cidiz~ng th.e wel.ls. Seminole, in the southern High Plams, discovered m 1927, has an estimated reserve of more than 102 million . barrels. Wasson, discovered in 1937, covers an area .of. 48,000 acres and has an estimated reserve of 399 milhon bar· rels, ~s of1anuary 1, 1944, as given by The Oil and Gas Journal. Slaughter, discovered in 1927, covers an area of. 72,000 acres (and which is not fully defined as yet), and its estimated reserves have been placed at 445 million barrels. Both Wasson and Slaughter produce from the San Andres formation which is a dolomite, at the top of the Leonard; the lowe~ Leonard _is regarded as the Clear Fork equivalent out m the Basm. · The p;eneral aspects of the Permian series have been summarized by the U. S. G. S. as follows: "The .Per· mian . . . comprises a maximum of over 5,000 feet ?f limestones, dolomites, sandstones, and shales. The mam area of outcrop of these beds is in ~orth-central and northern Texas, but they also appear i!1 wes.tern .Texas and in scattered areas of small to medmm size. In ex· tensive areas in northwestern and western. Texas they lie buried and concealed beneath younger formations, bu:t are accessible to the drill. In central .and northern Texas and in the eastern part of western Texas the Permian rocks have been divided into the Wichita group, Clear Fork formation, and the Double Mountain group, named in order of age, the oldest first. Each of these units has been subdivided into formations or members, and local names have been given to still smaller oil· bearing units." . · Still lower underneath the Permian, is the Ordovi­cian-'-and if folding and structures should occu~ in the Ordovician in these northern fields of the Basm-but that is still another story. ' In this connection, however, it may be noted that there is production from the Ellenburger as well as from the Siinpson, both of Ordovician age, in North-ce~tral Texas'. The Lower Ordovician is the source of prolific produc­tion in Kansas and Oklahoma. · The geology of the Permian Basin, not c?mpletely interpreted as · yet, has nevertheless been sufficiently un­raveled that the general conditions are fairly obvious. The following outline includes only the barest essentials of these conditions: 1. The Permian Basin is a vast geosyncline of Paleo· zoic formations. The Permian beds of the eastern limb of the basin dip westward from off the Pennsylvanian strata; those of the westward flank dip eastward from off the Cordilleran uplifts. ·The Permian basin is divided into northern and south· em sections by the buried Amarillo Mountains the axis of which parallels that of the Wichita Mountains of southwestern Oklahoma. Apparently the buried Arna· rillo range represents a prolongation of the Wichitas. 2. The Permian Basin of West Texas-Southeastern New Mexico here consists of two sections: the Delaware Basin and the Midland Basin, with a platform-the West Texas Platform, or the Central Basin Platform­rising between these basins. Permian depositio~ in this basin was complex, being complicated by strange ad· mixtures of normal marine beds of sandstone sheets, thick limestone formations and dolomites, the peculiar so-called reef limestone and dolomite beds, aiid the various types of evaporite series, laid down in desic­cating seas, and the entire area subsequently blanketed by vast deposits of Continental Red Beds. As summed up by.the U. S. G. S.: "A major structural feature. of the west Texas district is a buried uplifted platform of Paleozoic rocks, having a width of 30 miles or more and extending northwestward from Crockett County into New Mexico, a distance of more than 200 miles. This uplift is known as the 'Central Basin Platform.' West of this uplift is a structural basin 75 miles wide, the Delaware Basin, in which the rocks lie much lower than rocks of corresponding age in the Central Basin uplift; east of the uplift is another basin, the main Per­mian basin, 60 to 75 miles wide, in which the rocks lie some 2,000 feet lower than (the rocks of corresponding age) on the uplift. . . . The east and west flanks of the Central Basin Platform are steep. . .." 3. Accumulations of oil and gas in the Permian lime­stone of these fields are controlled in part at least by so-called reef structures and are influenced to some ex­tent by buried hills · and folds in the formations below the Permian. 4. Beneath the · Permian is an earlier Paleozoic sec­tion, dominantly Lower Paleozoic, and principally Lower Ordovician. The history of development of oil produc­tion from the Ordovician is worthy of considerable at· tention. Production has been attained in the Ellenburger and the Simpson of the Lower Ordovician, which lies unconformably beneath the later formation. Quoting from an article "Permian Basin Pays Are Many-and Deep" in World Petroleum, March, 1944: "Good Per­mian prospects were often somewhat dependent upon the location of and existence of buried reefs; not so with the pre-Permian, where oil is found in intensely folded and faulted and truncated beds, giving rise to avariety of reservoir traps." For comparative purposes it is to be noted that the Arbuckle limestone, the time equivalent of the Ellen­burger limestone, has produced large amounts of oil in the El Dorado, Kansas, field, on the Nemaha buried granite ridge, and in the Oklahoma City field; it is also the chief producing horizon in western Kansas.· The increasing importance of the Ellenburger limestone in North and West Texas is of course attracting consider­able attention. Sandstones of the Simpson group of Oklahoma and their equivalents in Texas, also in the Lower Ordovician, are important producers in Okla­homa, notably in the Oklahoma City field and in the Seminole district, where there is also some production in the Simpson dolomites. There is also production from the Simpson in the Red River district of Texas as well as in Pecos County in West Texas. 5. The distribution of the various ·groups of fields, both the older and newer ones of the Permian Basin, are closely associated with major structural alignments of the basin. From the geologic studies that have been carried on in conjunction with exploration work and drilling cam­paigns it has come to be recognized that West Texas possesses one of the great blocks of oil reserves not only of Texas but of the nation as well; for the estimated reserves of West Texas are placed at 30 per cent of the Texas reserves and 17 per cent of the total reserves of the United States. Total production of West Texas at the end of 194·3 amounted to 1 billion 378 million bar­rels and the estimated reserves, as of January 1, 1941, were put at 2 billion 807 million barrels. Total produc­tion of the Panhandle at the end of 1943 amounted to 469 million barrels, largely in Gray and Hutchinson counties, and the reserves were put at 600 million barrels. Comparison may also be made with the older pro­ducing states of the Appalachian district. Total Estimated Production Reserves to End of 1943 (Barrels) (Barrels) West Texas ------------------------------------2,807,000,000 1,378,000,000 Panhandle ------------------------___________ 600,000,000 469'000,()()() Total ---------------------------------_____ 3,407 ,000,000 1,84 7 ,000,000 Combined total for West Vir­ ginia, Pennsylvania, New York and Ohio -----------------------------------294,419,000 2,201,444,000 Production in the Appalachian district has been going on for more than 80 years; the total output to date of the states noted above amounts to a little less than 8 per cent of the national total. The reserves in these old oil producing states are low. By contrast, the large pro­ duction in West Texas and the Panhandle has grown up rapidly and the reserves of this entire region as com­ pared with those of the old oil producing states are distinctly large. As to current production, West Texas and the Pan­ handle together in 1943 supplied nearly 9 (8.8) per cent of the nation's output of oil and more than 22 per cent of the Texas total. THE EAST TEXAS BASIN Production from the Cretaceous In 1910 G. D. Harris defined the outstanding struc­ tural feature of northwest Louisiana and extreme north­ east Texas which is known as the Sabine uplift. The Sabine uplift is a low dome, with complementary basins to the west-the East Texas Basin-and to the east. South of the Sabine uplift the beds dip gently Gulfward. These conclu.sions by Harris had been preceded, however, by p;eologic studies extending back into the 1890's. In fact, William Kennedy had indicated the existence of the Tyler trough on a map published in 1895. Production on the uplift had begun at Caddo, 1904-08. Then came a period of several years of quietude for the region in general, but during which the fault-line fields at the western margin of the East Texas basin were being developed. In the late 1920's exploration in the region became active. The Van field, in the interior salt dome basin of the East Texas syncline, was discov­ ered in 1929; and a little later a wildcat driller dis­ covered the gip;antic East Texas field. Production at Van is from the Woodbine sand; the structure is a faulted anticline. The cumulative production of Van to the end of 1943 was 139 million barrels and the estimated re­ serves, as of January 1, 1944, were placed at 301 million barrels. Van, therefore, is easily one of the big fields of the United States. The East Texas field originally had, according to Deussen, some five billion barrels of oil. This field simply dwarfs all other fields in the country. Produc­tion in East Texas has been so large and its reserves in sight so enormous that this single field has since its discovery dominated to a considerable degree the entire oil industry of the United States. Production to date plus the estimated reserves of this one field alone are much greater than comparable figures for any state in the United States excepting only California, Oklahoma, and the rest of Texas. Total production of this field at the end of 1943, as given by The Oil and Gas Journal, amounted to 1 billion 980 million barrels, and the esti· mated reserves as of January 1, 1944, as given by the above source, amounted to 2 billion 620 million barrels. To date the East Texas field has produced half as much oil as all the states east of the Mississippi River; and the estimated reserves for the East Texas field are nearly three times those for all the states east of the Mississippi. The reservoir rock of the East Texas field is the Wood· bine sand laid down as a near shore-line deposit on the west flank of the Sabine Uplift. The Woodbine is truncated on the margin of the Sabine uplift; here, dur­ing a time of emergence, it was subjected to erosion, which produced a wedging-out condition up the dip on the west flank of the uplift. The Woodbine is entirely absent on the summit of the uplift at the east and its truncated surface on the west flank was sealed off by overlying impervious beds of later deposition in the Upper Cretaceous. The accumulation of oil in the p;i­gantic East Texas field is considered a splendid example of a stratigraphic trap. Total output of the entire East Texas basin to the end of 1943, according to The Oil and Gas Journal, January 27, 1944, was 2 billion 274 million barrels and the total estimated reserves from the same source amounted to 3 billion 290 million barrels. Including the Mexia zone, the Sabine uplift, and the Southern district, so listed by The Oil and Gas Journal, the cumulative production of the total East Texas re· gion, to the end of 1943, was 2 billion 602 million barrels, and the estimated reserves, as of January 1, 1944, were placed at 3 billion 315 million barrels. The com· bined figure of production to date plus the estimated reserves for this entire area just about equals total pro· duction plus the total reserves of the second Big Three­Louisiana, Kansas, and Pennsylvania. Production in this entire area in Texas is from the Cretaceous, the Woodbine sand of the Upper Cretaceous being the great reservoir for the fields of the East Texas basin. As summarized by the U. S. G. S.: "The Cretaceous rocks of Texas are separable into two great divisions-the Lower CrPtaceous or Comanche series, and the Upper Cretaceous or Gulf series. Each division has a maximum thickness of over 4,000 feet. The rocks are of different kinds and are so distributed that one or another kind predominates throughout a considerable thickness, thus making it possible to subdivide the rocks into formational units. Although consoli· dated in various degrees the Cretaceous rocks are in general softer than the older pre-Cretaceous rocks of the State. Only those formations that are known to carry commercial quantities of oil will be especially described. "The rocks of the Cretaceous system crop out across central Texas in an irregular northeast-southwest helt the main part of which has a length of over 600 miles and a' maximum width in western Texas of over 200 miles. The strata dip to the south· east and south, toward the Gulf of Mexico, at the rate which, though gentle, is greater than the inclination of the surface of the ground. The result is that the formations become buried to greater ·and greater depths toward the coast. Some of the more porous of these formations are important as sources of oil and gas in their buried coastward extensions. The rocks of the Cre­taceous system and of the overlying Tertiary system together form a great monoclinal fold of gentle slope. The uniform dip of the Cretaceous strata is modified locally by structural breaks and deformations, some of which are important as determining the places at which oil and gas are concentrated. LowER CRETACEOUS RocKs (Comanche Series) "The rocks of the .Lower Cretaceous or Comanche series con­ . sist mainly of hard limestones and interbedded soft chalky marls, but shales, sandstones, and sands also make up considerable parts of the series. The series is known to have a maximum thickness of over 4,000 feet, but except in the Rio Grande Basin, is generally less than 3,000 feet thick. The series is divided into numerous formations, but the Edwards limestone, which lies a little above the middle of the series, is the only one that is known to be an important oil bearer. North of the Colorado River the belt of outcrop coincides approximately with the Grand Prairie, and south and west of the Colorado it coincides with the Edwards Plateau. "Edwards limestone.-In . Bastrop, Caldwell, and Guadalupe counties, where the Edwards limestone is the source of oil in the Luling, Salt Flat, Darst Creek, and smaller fields, it is about 700 feet thick, and the oil is found within the upper 150 feet, mainly in faulted beds." · With reference to production from the Lower Cre­taceous, it should be noted that members of the Glen Rose group particularly are important producers on the north and northwest flanks of the Sabine uplift, in the basin area lying between the Sabine uplift and the Ouachita Mountains.· UPPER CRETACEOUS ROCKS (Gulf Series) "The Upper Cretaceous or Gulf series consists of 1,500 to 4,000 feet of clays, shales, marls, chalks, and sands,.which are divisible into formational units. The belt of outcrop of these rocks form the inner or landward portion of the Gulf Coastal Plain. "The Woodbine sand is the basal unit of the Gulf series and has a maximum thickness of 500 feet or more. It is made up mainly of sand and sandstone but includes also considerable bodies of clay. Although limited in its distribution to about .18,000 square miles in the northeastern Texas, the formation is by far the most important oil-bearing formation in the Upper Cretaceous series. It is the source of oil in the great East Texas field; in the Mexia-Powell district, in Navarro, Freestone, and Limestone counties; and in the Van pool in Van Zandt County. . "Other formations in the Gulf Series that have yielded oil are the Austin chalk, which lies rather low in the series; sand members in Taylor marl, which overlies the Austin chalk; the Nacatoch sand of the Navarro group in Navarro County (the Navarro group forms the upper part of the series) ; other sand members of the Navarro group; a sand member of the Escondido formation in Medina County; and bodies of igneous rock con­sisting of serpentine and water-laid igneous detritus, which are interbedded with the Upper Cretaceous rocks. "In the Upper Cretaceous series the oil is found mainly in faulted beds (Mexia-Powell fields), and in monoclines (East Texas field) ; minor quantities are found in anticlines, terraces, and salt domes." THE GULF COAST Production from the Tertiary After having glanced all too briefly at other sections of the State, it is appropriate to return to the scenes where the Texas oil industry got its first important impulses. In the first place, too much emphasis can hardly be placed upon the fact that the entire Gulf Coast of Texas and Louisiana constitutes one of the great oil and natural gas reserves of the United States. Drilling depths have by no means reached the.fr limits in this vast region, nor is it known what deeper drilling exploration will reveal. Tests are proceeding in the Wilcox of the Tertiary. The Cretaceous in this region is untested, and, as yet, it has not been determined whether or not the Jurassic extends under the Gulf Coast country. After the discovery of Spindletop, there had ensued a wave of exploration, the object of which was to find oil fields from such surfac~ indications--mounds, hills, ridges, lakes--as did exist on the flattish, featureless plain. Some thirty of such locations were found in a few years after Spindletop and a few good fields were brought in-Batson, Sour Lake, Saratoga, Barber's Hill, Humble, and others. These, like Spindletop, are salt dome fields of the piercement type. But these types located by surface indications were soon discovered; the production was shallow, and after a period of flush production the inevitable decline set in. Gulf Coast production receded perceptibly before and during the period of World War I. By 1920 the Gulf Coast as a whole was not very active, so far as oil was concerned. Then came two revolutionary developments in ex­ploration technique which were particularly applicable to the Gulf Coast country. One of these is the misco­scopic examination of rock samples and the use of diag­nostic foraminifera in correlation of strata which do not outcrop, such as certain ones, for example, of the Oligocene. Micropaleontology was introduced in the Gulf Coast about 1922. The other remarkable development was the use of the refraction seismograph which was introduced in this region about 1923. The refraction seismograph initiated the second wave of exploration in the Gulf , Coast, and by it exploration to medium depths, of 4,000 to 5,000 feet, was made possible. As a consequence, some thirty new domes were dis­covered in this five-year period, 1923-28. Production in the region, however, was not greatly stepped up from the discovery of these domes--as there were few good producers at these depths in the crop of struc­tures picked up in this wave of exploration. In 1928, the reflection seismograph was introduced; this instrument was capable of picking up deeper-seated domes and gentler structures than was the case of the refraction seismograph. From the use of the reflection seismograph a new wave of exploration was initiated, and in consequence some of the largest and richest of the Gulf Coast fields were discovered. These were the non-piercement type domes, as exemplified by Conroe, Tom Ball, Hastings, Anahuac, and Dickinson. The following is a summary of the Tertiary rocks, particularly of the Coastal Plain, from the U. S. G. S.: "The rocks of the Tertiary system consist of clays, shales, sands, sandstones, and subordinate amounts of marl and lime­stone, of unknown maximum thickness but estimated at 12,000 feet or more. In general these materials are relatively softer than the Cretaceous and pre-Cretaceous rocks, but they are in fact consolidated in varying degrees, and some layers are fairly hard. The Tertiary rocks have been subdivided into series (Eocene, Oligocene, Miocene, and Pliocene) and each series into formations and members, but the materials composing them are as a whole of similar kinds, . and . separate descriptions of the subdivisions are not necessary rn this suml!1ary. "The main body of the Tertiary rocks underlies the part of the Gulf Coastal Plain between the southeastern edge of the belt of outcrop of the Cretaceous rocks and_ the coast of _the Gulf. of Mexico. This tract is nearly 600 miles long and 1.s 270 miles wide at its widest part. Late Tertiary rocks, which cover a tract of wide extent on the high plains in the no_rthem part ~f the State, are too thin to have an important beanng on the 011 geology. d. 1 "The Tertiary rocks, like the Cretaceous, 1p gent Y coast-ward at an inclination somewhat greater than that of the surface of the ground; as a result the older subdivisio~s. ?f the system crop out farthest inland and the younger subd1v1:10ns crop out in belts successively nearer the coast. The buned sands an? sandstones of the system are, under favorable st_ructural _condi­tions the principal reservoirs for the accumulat10n of 011 and gas in the Gulf Coast and southwestern Texas oil ~elds. The type of limestone generally known as cap ro~k, which occurs at the crests of salt domes, is also a source of 011. . "In the Gulf coast fields oil is chiefly found rn structural features of two types-domes and salt domes. I~ the . s~uth­ western Texas fields the oil and gas are found rn anuclmes, monoclines, and terraces, some of which are slightly affected by faulting." Tertiary production in Texas comes from two dis­tricts of the Gulf Coast country and from the Laredo district. (a) The Upper Gulf Coast, or Houston. district, char­acterized primarily by salt domes of the p1ercement type and by deeper structures which are thought to be_ deepl_y buried domes; also, as previously stated, the W1l~ox _is being tested. The Wilcox has given good product10n m two fields in Louisiana-at Eola, discovered in 1939, and at Ville Platte, discovered in 1940. The so-called Wilcox trend is known to extend from the lower part of the Mississippi River to La Salle County, Texas, and it has now been established that productive members may occur throughout the entire section of the Wilcox sands. Salt domes of the piercement type, it may be noted, give fields of rather small producing areas, terri­torially considered. (b) The Lower Gulf Coast, sometimes designated as the Corpus Christi district, in which fields of the struc­tural type too-ether with stratigraphic trap accumulations 0 occur. This district is not characterized by piercement­type salt domes. Oil in these districts is produced from the Eocene to the Pliocene. (c) The Laredo or South Texas district, hitherto char­acterized by somewhat scattered, shallow production from lensinu sands in the Oligocene and Eocene. · Truly lar~e fields in the Upper Gulf Coast district are not numerous. Production in only 4 fields has risen to the 100 million barrel mark: Spindletop, 129 mil­lion; Humble, 126 million; Hull, 98 million, with esti­mated reserves of 17 million barrels; and Conroe, 162 million. Of these fields, the only one with a sizable reserve left is Conroe, the estimated reserves for which are set at 538 million barrels. Six other fields in this district will rise to the 100 million barrel ranking, if their estimated reserves are realized. These are Anahuac, the estimated reserves of which are placed at 257 mil­lion barrels; Webster, 326 million barrels; Thompson, 176 million barrels; Hastings, 306 million barrels; West Ranch in Jackson County, 220 million barrels; and West Columbia, 19 million barrels. Total production of West Columbia amounts to 92 million barrels. Later developments in the Gulf Coast include explora­tion of the so-called trends, such as the Conroe or Cock-field trend, the Wilcox trend, and so on; these trends have been carried across the Texas Gulf Coast into Louisiana. Space does n12t permit more than brief mention of developments in the Lower Gulf Coast or of the La­redo district, in neither of which, as previously noted, is production of the salt-dome type. Production in the Laredo district is from the Eocene and Oligocene from a variety of types of structures. Production in the Lower Gulf Coast is from the Eocene, Oligocene, and Miocene. During the early days of exploration this entire terri­tory of the Laredo and Corpus Christi districts was considered a prolongation geologically of the Upper Gulf Coast country and consequently a search was made for possible salt dome production. Two such domes were found, Palangana and Piedras Pintas, in Duval County; the combined production of these two domes has been small. With the discovery of production at Refugio, which lies just north of this territory and of production from a number of shallow sands in the Miranda area, the search for oil changed to the following of trends and exploration for structural features with which wedging sands are associated. The shallow Mirando sand trend produces mainly from the Jackson group, but along this trend there is also somewhat deeper production, as much as 2,000 feet, from the Frio, Catahoula and Yegua, all of which are in the Eocene. Deeper drilling has resulted in finding some oil in the Cook Mountain group. Exploration has subsequently proceeded coastward in the search for trends. The geologic problems, how· ever, are complicated, involving a multitude of complex factors, including lateral gradation of beds from con· tinental t~ marine, the gradation of sandy members into shales, together with the entering of numerous sand wedges into the geologic column. A succession of trends has since been developed be· tween the Mirando sand trend and the Gulf coast. The Benavides-Pettus trend produces from the same general sand series as the Mirando trend-the Jackson and Cock­field groups-but farther down dip, and therefore deeper, where wedge edges have been formed. Production is from depths ranging from 4,000 to 5,000 feet. The Vicksburg trend produces from a wedging forma· tion occurring between the Jackson and the overlying Frio. Fields on this trend include Alice, East Premont, Ben Bolt, and the Wade City-Orange Grove group. It is believed that the Vicksburg will be found at depths of around 11,000 feet along the coast. The Vicksburg is the source of deep production at Pierce Junction and at Thompson, but is not important elsewhere in the Upper Gulf Coast. Next is the trend in the Frio sands which are con­sidered as the down-dip phase of the outcropping Cata· houla. Down the dip the Frio thickens considerably. The Frio and Vicksburg are considered as lower Oligo­cene. Although Refugio, brought in in 1922, produces from Frio sands, the importance of the Frio did not become appreciated until Saxet and other fields in Nueces County were discovered. Tom O'Connor field also pro· duces from the Frio. The Frio provides prolific pro­duction. The Marginulina, of the upper Oligocene, is the eastern· most of the producing trends, producing along the coast in Flour Bluff, McCampbell and other coastal fields. It is considered that some of these fields may be pro· ducing from the underlying Frio formation. For the sake of a wider perspective of the whole Coastal Plain, it should be mentioned that the Lower Cretaceous (Glen Rose, etc.) produces in the Tri-State, or the Arkansas-Louisiana-Texas district of northeast Texas, southwest Arkansas and northwest Louisiana­this being an expansion of the old Shreveport district. Also, among the geologic surprises of recent develop­ments in this district has been the determination of buried Jurassic formations, such as Cotton Valley and the Smackover lime, as a source of deep production in southwest Arkansas and northeast Louisiana. Whether or not the Jurassic continues under the Gulf Coast coun­try of Texas is another geologic problem that may in time be cleared up by deep drilling. Another question of momentous importance pertains ' to. the state of hydrocarbons at great depths under the Gulf Coast, that is, if hydrocarbons exist at such depths. There is apparently little question but that increased exploration will greatly augment the already proven large gas. reserves of .this region. However that may be, the Texas Tertiary districts of the Gulf Coast, including the Laredo district, have an estimated total of four billion barrels, which is more than a third ( 34.6 per cent) of the total estimated reserves of Texas, and nearly twenty (19.6) per cent of the nation's reserves. In brief, it may be concluded that when engineering equipment is adequate to go to much greater depths satisfactorily, another wave of exploration will take place in this region-in what is now recognized as one of the two or three great oil reserve provinces of the United States. The scope of the oil industry of Texas, owing to the inherent nature of the numerous complex conditions in­volved, cannot be properly appreciated without a com­parative view of the oil industry of the country at large. A comparative study has been prepared for a future issue of the TEXAS BusINESS REVIEW. In addition, it should be noted that the scope of the Texas oil industry cannot be presented with9ut also tying in rather precisely the factors and characteristics of production, as well as conditions of accumulation and reserves, with the geologic conditions concerned­a problem obviously too complex for a short article. A brief outline of some of the main geologic aspects of the three major oil producing states will be presented in a future article. SUMMING UP OF TEXAS GEOLOGIC CONDITIONS AT LARGE As RELATING TO OIL PRODUCTION 1. By far the greater proportion of Texas is under­lain by sedimentary strata which as a rule are but gently inclined, or at most, with certain exceptions, are only gently inclined or moderately folded. Oil and gas accumulations in the State are associated with a variety of structures, some of which, such as the gip;antic East Texas field, are of a rather simple nature. · 2. The distribution of oil and gas accumulations in Texas is closely associated with the general geology and the stratigraphy of the various major regions of the State. 3. Within these regions the strata are affected by local exceptional conditions of a structural or stratigraphic nature, or both, which have proven to be of determining importance in the localization of oil and gas accumu­lations. These local conditions include the following: (a) Areas in which sharper folding of the strata prevail. . ( b) Zones of faulting, in which the strata have suf· fered displacement. . ( c) The occurrence of salt domes . of the piercement type, consisting of salt plugs upthrust through the .va­rious beds underlying portions of the Coastal flain. ( d) Conditions associated with unconformities in which underlying beds have been planed off by erosion during emergent periods and which were subsequently covered over and thereby sealed off by the later deposi­tion of impervious beds. A SUMMARY OF ECONOMIC ASPECTS OF THE OIL INDUSTRY OF TEXAS . 1. Nowhere has the influen·ce oflarge oil fields on oil production been more important than in Texas. Because of the many regions concerned in this development, how­ever, the influence of big fields at first glance is less apparent than it may be, for instance in California or Louisiana. Throughout the history of the oil industry in Texas, the State's production of oil has been char­acterized by the opening up of one large field after another. That is, Texas oil history has been a function of the prolific flush production . of big fields as they have been progressively opened up in the several oil regions of the State. 2. Oil and gas have been and are being produ~ed in Texas at prodigious rates. Both oil and gas are wasting assets; they are irreplaceable resources. Moreover, the oil and gas reserves of Texas are basic resources abso­!utely ~undamental to the future expansion of the State's mdustnal economy. Because of these inescapable facts the problems of oil and gas t:onservation and of th~ highest possible type of utilization of these vital re­sources loom as fundamental issues of the State's econ~ omy in the post-war years. . 3. The rate of growth of Texas oil production . has m general paralleled the growth of the automobile in the Un~ted States. Particularly striking is the fact that the rapid expansion of the Texas oil industry since World War I has paralleled the almost spectacular rise of the automobile industry in the nation at large. · Along with the rate of growth in demand for deriva­tives from _oil,. there . have been the · revolutionary de­velopments m oil refinmg· technology which have resulted in increased yields of desirable products from a barrel of crude oil and at the same tim~ greatly improved the quality of these derivatives. 4. Important to the growth of oil production in Texas and of the oil refining industry in the State as well'. have been the advantages of deep-water transportation to the large markets, particularly those of the upper Atlantic Coast. . Paralleling the revolutionary technologic advances made in oil ~efining are.the ju_s~ as. revolutionary ad­vances made m the chemical utihzat10n of oil and gas hydrocarbons. Upon the further utilization of these advances can be built a vast chemical industry the pro­portions of which from a national or even fro~ a world standpoint virtually stagger the imagination. ELMER H. JoHNSON. Postwar World Demand for Cotton Any worth-while planning for cotton in the postwar period must take into account certain basic facts and developments which have occurred during the period of the war. Immediately following the war the bottleneck of the cotton industry will be capacity to manufacture cotton. The world is bare of cotton goods and the pent up buying power coupled with rehabilitation programs assures the demand for the goods and raw cotton. The problem is how much can be manufactured and where. CONDITIONS OF WORLD COTTON MANCFACTCRI'.\"G EQUIPMENT In 1939, the latest year for which complete statistics are available, there were 145 million cotton spinning spindles in the world, and of these only about 4.S mil­ lion are in countries exempt from war damage. The other 100 million are in countries where they are sub­ jected to destruction by the war and some have already been destroyed and more may be destroyed before the war closes. The 45 million spindles outside the theater of war are now consuming cotton at the rate of about 17.5 million bales per year. This high rate will not be main­ tained after the war especially in the United States. Data available now indicate the British industry with about 36 million spindles has suffered or will suffer very little damage and will be able to manufacture as much cotton as prior to the war, or 2.5 to 3.0 million bales. Continental Europe in the war zone not including Russia has about 35 million spindles. Some of these have doubtless been destroyed and some more will be, depending on where major campaigns are waged. In the main, the textile industries of those countries are not in the cities so far destroyed nor are they closely asso­ciated with industrial centers basic in producing war supplies. It would be a high estimate to say that 10 million of these spindles have or will be destroyed. The area under consideration normally manufactured about 5,500,000 bales a year. It is probable thev could manufacture 4 million bales after the war with some repairs. Russia had 10,350,000 spindles in 1939 engaged al­most entirely in production for home consumption out of Russian grown cotton, or about 3.5 million bales a year. Japan had 11,500,000 cotton spinning spindles in 1939. These are all in place now though in the absence of sufficient raw cotton many of these are operating on rayon or not at all. The industry may be lari 1944<2) 1944 1943 1944 (l) 1944<•> 1944 19~3 MANUFACTURING - All Manufacturing lndustriea....165,673 160,061 3.4 -2.0 5,603,343 5,524,388 1.4 + 9.8 Food Products Baking -· 9,452 10,115 + 7.0 + 25.7 325,582 365,603 + 12.3 + 56.1 .Carbonated Beverages -------3,431 3,562 + 3.8 -1.1 100,897 104,940 + 4.0 + 4.6 - 5.1 +29.6 20,733 19,773 4.6 +57.5 Confectionery -----------1,502 1,426 Flour Milling _____ _ _ _ 2,274 2,233 1.8 + 5.6 68,546 70,334 + 2.6 + 19.8 Ice Cream .J.._____________ 1,461 1,538 + 5.2 + 11.8 38,724 38,724 + (5) + 15.6 6,056 6,345 + 4.8 + 18.5 182,034 202,454 + 11.2 + 15.1 Meat Packing ---------·-··· Textiles 5,272 5,109 3.1 -23.5 118,423 117,600 0.7 -15.4 75,075 + 0.4 Cotton Textile Mills -·----··-···--·-·· Men's Work Clothing --·--·-------·---· 4,332 4,251 1.9 -9.6 74,767 6.0 Forest Products 1,155 1,119 3.1 -32.3 30,454 30,628 + 0.6 9.6 Furniture ---------·------------------­Planing Mills ------------·---------1,803 1,810 + 0.3 -10.7 51,704 52,184 + 0.9 + 2.5 Saw Mills ----------·-------·-14,453 13,847 4.2 -11.5 276,965 240,572 -13.l 8.1 Paper Boxes --------------· 768 772 + 0.5 -10.2 17,667 18,833 + 6.6 2.5 Printing and Publishing Commercial Printing ------------· 2,465 2,494 + 1.2 + 1.8 85,326 86,527 + 1.4 + 4.5 Newspaper Publishing ---·--·-···----3,966 3,854 2.8 8.7 111,885 112,274 + 0.4 3.1 Chemical Products Cotton Oil Mills -----------···---2,930 2,383 -18.7 0.4 47,646 39,360 -17.4 + 12.4 Petroleum Refining ---------------· 24,409 24,662 + 1.0 + 10.l 1,406,383 1,406,303 -(5) + 17.2 Stone and Clay Products Brick and Tile 1,701 1,528 -10.2 -5.4 29,133 26,384 9.4 + 3.8 Cement -------------------·---889 877 1.4 -23.8 34,413 32,755 4.8 -26.3 Tron: and Steel Products Structural and Ornamental Iron __ 2,427 2,456 + 1.2 -14.0 81,374 82,510 1.4 ­ l.l NONMANUFACTURING Crude Petroleum Production.... 26,944 27,002 + 0.2 + 7.0 1,457,108 1,446,660 0.7 +22.0 Quarrying ----------------------------------(3) (3) 1.8 -14.4 (3) (3) 2.8 -1.6 Public Utilities ··"·----------------------(3) (3) + 0.6 + 5.7 (3) (3) + 0.4 + 13.1 Retail Trade --------------------------209,731 206,225 1.7 -5.7 4,811,161 4,791,653 + 0.4 ·5.5 Wholesale Trade ---------------------61,934 61,582 0.6 + 2.3 2,373,608 2,399,470 + 1.1 +13.5Dyeing and Cleaning ----------------2,885 2,981 + 3.3 -1.2 66,063 70,966 + 7.4 + 15.4 Hotels . ---------------------------------------19, 424 19,751 + 1.7 +10.1 337,207 339,517 + 0.7 +27.9 Power Laundries ---------------------14,192 14,507 + 2.2 -3.2 239,501 244,045 + 1.9 + 3.6 CHANGES IN EMPLOYMENT AND PAY ROLLS IN SELECTED CITIES«> Employment Pay Rollo Emp loyment Pay Rolls Percentage Chan·:<' Percentae:o Chan!!e Percentaee Chan!!" Perrrntage Chane:eApr., 1944 May, 1943 Apr., 1944 Apr., 1944 May, 1943 May, 1943 Apr., 1944 May, 1943to to to to to to to to May, 1944 ,Abilene 2.2 1.6 + 3.9 + 18.0 Galveston May, 1944 May, 1944 May, 1944 May, 1944 May, 1944 May, 1944 May, 1944 + l.l + 14.3 + 3.0 + 71.2 Amarillo --------1.8 5.0 + 6.4 + 1.5 Houston + 1.1 2.5 + 6.5 + 18.2 Austin ------------10.0 2.7 3.9 + 0.6 Port Arthur --· + 2.1 + 5.3 0.7 + 8.3 ,Beaumont -----+ 5.6 2.9 + 5.6 + (5) San An.tonio -0.1 + 2.4 + 0.8 + 5.7 Dallas -------+. 0.5 + ' 47.2 + 1.4 + 96.8 Sherman -------0.2 + 3.7 + 0.8 + 24.l El Paso --------+ 2.9 2.6 + 0.9 + 15.1 Waco 2.0 1.2 3.1 + 5.8 Fort Worth 0.6 5.8 + 5.6 + 8.8 Wichita Falls _ 1.7 6.8 + 3.2 + 6.6 STATE + + ------0.8 6.5 + 3.5 + 23.6 ESTIMATED NUMBER OF EMPLOYEES IN NONAGRICULTURAL BUSINESS AND GOVERNMENT ESTABLISHMENTs<•> 1942(1) 1943(]) 1944 1942(1) 1943 January ···------------·----1,170,000 1,385,000 l ,429,000<2> July ------····--------------1,317,000 I , 450, 000 <1> February -----------·----·-1,199,000 1,397,000 1,433,000<2> August ---------------1,352,000 1,441,000(2) March ---·-------------·---_ 1,226,000 1,415,000 1,433,000(2) September _________ 1,373,000 1,448,000<2> April -----·--·----·----·--1,222,000 1,433,000 October ----------------1,384,000 "l,455.000(2) May -------·--------------1,251,000 1,458,000 November ·----------1,389,000 1,461,000<2> June ------------------· 1,291,000 1,478,000 December -----------1,413,700 1,470,000(2) •Does not include proprietors, fi rm members, officers of corporations, or other principal executive1, Factory employment excludei also office. salei, 1echnkal and professional personnel.

Subject lo revision. (3>Not available. <'>Based on unweighted figures. Less than 1/ 10 of one per cent.