Development of the Natural Gas Industry

October 5, 1931

Report Outline
Recent Evolution of Super Gas Systems
Early History of Natural Gas Industry
Uses and Advantages of Natural Gas
Natural Gas Production, Resources, and Reserves
Development of Natural Gas Pipelines
“Big Business” and Natural Gas
Regulation of Pipelines: Conservation of Resources
Special Focus

Recent Evolution of Super Gas Systems

Characterized by phenomenal growth during recent years, the exploitation of natural gas in the United States has been rapidly taking its place as a major economic activity, comparable in its potential importance with the development, since 1920 of the great electric super-power system. Discovery of vast additional reserves in the Southwest and in California and improvements in pipeline construction, making possible transmission of natural gas over greatly extended distances, have combined to step up production and consumption by leaps and bounds. While the consumption of natural gas increased only slightly during the depression year 1930, last year's consumption was about 725 billion cubic feet in excess of that of 1925, an increase of more than 60 per cent. The consumption of manufactured gas, after having shown a steady increase up to and including 1928, is now back nearly to its 1925 level.

A network of natural gas pipelines stretches hundreds of miles north east, south, and west from the chief producing areas of Texas, Oklahoma, and Louisiana, while other networks embrace the Appalachian region and the state of California. Distribution of natural gas to almost all the principal cities of the country and to many smaller localities is fast becoming a reality. A pipeline 926 miles long from the Texas Panhandle to Chicago and another of about the same length from the Panhandle to Indianapolis were completed in August, 1931. Pipelines have recently been constructed and arrangements made to supply natural gas to various cities on the eastern seaboard from Norfolk to Newark. Extension of lines into New England is regarded as likely during the next few years.

Evolution of Super Gas Systems

The need for large capital resources and the prospect of substantial profits in the development of a nation-wide system of gas distribution have brought big business into the industry on an extensive basis. Mergers of pipeline and producing companies and establishment of natural gas subsidiaries and holding companies by the older oil corporations have taken place in numerous instances. All the complicated ramifications of interlocking stock ownership and control characteristic of the electrical utilities are already present in the natural gas industry. Coincident with this development have come demands for regulation of natural gas pipelines through the agency of a federal commission.

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