Proceedings Volume Cover
1463  
G
A
NEW PERFORMANCE MEASURE TO TEST THE  
CONTRIBUTION OF THE PETROLEUM AND NATURAL  
GAS INDUSTRY IN AN EXPANDING ECONOMY  
Virgil L.Barr  
Assistant to the Chief  
Division of Petroleum  
Bureau of Mines  
U. S. Department of the Interior  
Washington 25, D. C.  
This paper is to be presented at the Annual Meeting of the  
American Institute of Mining,  
Engineers, Inc., New York, February 14 to  
and Petroleum  
1960.  
60K53  
A
NEW PERFORMANCE MEASURE TO TEST THE  
CONTRIBUTION OF THE PETROLEUM AND NATURAL  
GAS INIUSTRY IN AN EXPANDING ECONOMY"  
By  
Virgil L. Barl' .  
*
ABSTRACT  
National income originating compared to physical produc•  
tion for an enterprise or an industry reflects its ability to  
single industrial sector  
or for an industry this comparison can be useful to reflect changes  
that may occur in this ability to contribute because of changing  
supply-demand-income-investment equilibria. favorable rela•  
strengthen the national economy. For  
a
A
tionship can be postulated by specified economic incentive, and the  
accompanying technologic input required can be shown.  
The new index proposes the use of the Federal Reserve  
Board indexes of production divided by the constant dollar income  
originating in the petroleum industry which reflects increases or  
decreases in performance. When compared with other mineral industries  
and with total industry, an approximation of relative strength is  
evident.  
By constructing three different hypothetical conditions for  
future petroleum imports, assuming  
a constant excess capacity  
requirement for domestic production, and providing an estimate for  
future domestic demand for petroleum, the impact on the performance  
index can be shown.  
Thus,  
a
strong position for the petroleum and natural gas  
industry can be stated. If this is done, it becomes evident that be•  
cause of restrictions on cost-price relationships, drilling program  
a
that would provide enough domestic oil to meet demand may not be  
practicable. By difference, 'the amount of improvement in methods of  
production and processing through technologic advancements can be  
stated explicitly.  
INTROIUCTION  
The public relations problem of presenting the petroleum  
and natural gas industry as an equitable contributor to the national  
*-  
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Assistant to the Chief, Division of Petroleum, Bureau of Mines,  
U. S. Department of the Interior.