Unlimbering Giant

To meet the loss of Iran's oil to the West, the U.S. oil industry last week cleared its pipelines for a giant production race. In Texas, the state regulatory commission set the pace: it lifted its monthly "allowable" rate of crude oil production to 3,000,000 barrels, the highest in history.

Never before was the U.S. industry better equipped to meet the test. In six years, it has poured $12 billion into expansion, boosted its proved reserves by 27%, increased its production capacity by 26%. By so doing, it has managed to keep pace with the nation's own ever-growing demand for fuel (for more tractors, more diesel engines and home burners, for 15 million more autos and trucks than in 1941). In a decade, U.S. petroleum consumption has shot from 1.6 billion barrels a year to 2.6 billion.

For its bootstrapping job, the industry is earning its merited reward. Its booming production has enabled 30 companies to boost, their first-half net a whopping 41% above last year. Samples: Standard Oil (N.J.) cleared $249 million, a gain of 56%; Texas Co., $87 million, up 59%; Socony-Vacuum, $76 million, up 69%; Shell, $46 million, up 18%. Thus the industry was well-heeled for its bigger job.

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