STATEMENT OF H. B. FELL, PRESIDENT, SIMPSON-FELL OIL CO., ARDMORE, OKLA., EXECUTIVE VICE PRESIDENT, INDEPENDENT PETROLEUM ASSOCIATION

Mr. FELL. Mr. Chairman and members of the committee, my name is H. B. Fell. I am president of the Simpson-Fell Oil Co. of Ardmore, Okla. This company is a small oil and gas producing company and practically all of the stock is owned within the family. Since 1929 I have been the executive vice president of the Independent Petroleum Association of America.

I am a graduate civil engineer and have been engaged in natural resource industries my entire business life, having spent the last 32 years in the oil and gas producing business.

There was a question as to what percent of the domestic production was produced by the larger companies and what percent by the independents. The 22 largest companies, all of which are not importing companies, produce about 60 percent of the domestic oil and the thousands of other producers produce about 40 percent. There was also raised the question with reference to the imports from the Middle East. I would like to file for the record, Mr. Chairman, if I may, a table giving the imports of crude petroleum and petroleum products for the years 1948 through '52 and for January and February of 1953, by countries, by products, total imports, et cetera. The table shows that from the Middle East, starting back in 1948, we were imporing into this country from that source 66,000 barrels daily. The figure now, in January 1953 is 199,000 barrels daily, and February 173,000 barrels daily, so that the imports from the Middle East have been increasing substantially.

The CHAIRMAN. Without objection that may be inserted into the record at this point.

Source: All figures from U. S. Department of Commerce. Breakdown by country not shown for all refined products because of small volume (April 1953).

Mr. FELL. There are certain basic facts which must be considered in dealing with the problem of petroleum imports.

1. Our military, industrial, and transportation operations are currently dependent upon an adequate supply of petroleum products. Petroleum furnishes well over 50 percent of all energy utilized in our Nation. During World War II over two-thirds of the entire tonnage shipped overseas for our military operation consisted of petroleum products supplied from within the borders of the United States.

2. During World War II, and particularly in 1942 and 1943, the importing companies were unable to bring any substantial quantities of crude oil or its products into this country because of enemy sub

marines. This demonstrated clearly that there is no security in foreign oil for the defense of our own borders. Our excess domestic productive capacity of approximately 1 million barrels per day at the beginning of World War II made possible an adequate supply of petroleum products to enable ourselves and our allies to win that war.

3. It is the responsibility, accordingly, of the domestic petroleum industry to be able to furnish supplies of petroleum to meet all peacetime requirements and any wartime requirements that may develop. 4. In order to meet its responsibility, the domestic oil industry must find and develop adequate reserves and productive capacity to meet all requirements.

Since we cannot rely on petroleum from foreign lands for the protection of our own borders, we must consider whether there are adequate sources available in the United States. In the Western Hemisphere our second line of defense as to petroleum is Canada, but their production of oil is not yet sufficient to meet their own demands. Beyond that we have no assurance of supply. We know what has happened in Mexico and Iran, and that the same thing may happen in other countries.

In 1929 a program was proposed of importing all of the oil that we could and discouraging of exploration and development in this country, so as to keep our undiscovered oil in reserve. In 1931 the Secretary of the Interior stated, "We must import as much foreign oil as possible to save domestic supply." Fortunately, you Members of Congress did not agree and adopted a policy of encouragement to the domestic industry by the imposition of import taxes in 1932. During the next 8 years imports were discouraged and 16 billion barrels of oil were found in the United States while we were consuming only 9 billion barrels. Had imports been permitted to retard exploration for, and development of, domestic reserves and productive capacity, we could have lost World War II.

Proven ability of the domestic industry: The past performance of the domestic oil industry demonstrates convincingly that it can be depended upon to provide the Nation's oil needs for the foreseeable future.

The following chart, following this page, entitled "Oil Prophecies and Realities" shows the history of United States oil production and emphasizes its vitality and growth ability.

If you will refer to that chart, that heavy black line, going upward continually, practically, since 1860 up to 1950, shows the upward trend in the production of oil in our country. You will note a break in 1929. 1930, 1931, and 1932, during the period of the depression when the demand went down. You will see another slight downward break in 1939, when the first Venezuelan trade agreement was made and imports increased substantially. You will see another break downward in domestic production in 1949, when imports were hurting us so badly and when we at that time appealed to the Tariff Commission for relief. (The chart referred to is herewith inserted.)

Throughout the history of the domestic petroleum industry there have been repeated prophecies that this Nation was running out of oil and that we would be unable to continue to expand domestic produe tion. This same chart demonstrates the falseness of these prophecies You will note on that chart a prophecy made in 1914 when an

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