498 MINERALS YEARBOOK
 In studying oil-gas-energy relationships the engineer is dealing with two
interdependent and connected flow systems: (1) Flow within the reservoir
and (2) vertical flow in the column from the bottom of the well to the surface,
including the well-head connections, flow lines, and oil-and-gas separators.
Each system and its operation exert a definite and positive effect upon the
other, and without knowledge of both reservoir energy will be dissipated;
gas will be lost at the surface (if an adequate market outlet is not provided);
an appreciable quantity of recoverable oil will remain in the reservoir until
stimulative production methods bring it to the wells; and eventually mechanical
means will have to be used to raise oil that otherwise could have been produced
by natural flow at lower production costs.

PETROLEUM TECHNOLOGY AND ECONOMICS

 The fluid and mobile characteristics of petroleum and natural gas have led
to confusion in their production, technically and economically out of all
proportion to the production of other natural resources. An erroneous concept
of "captu'e and reduction to possession" has spread and permeated the whole
oil-and-gas structure since 1875 when, a court decision was rendered that
put the search for these hydrocarbon companions in the same category as the
hunting of wild game. Many efforts toward a wiser and more efficient use
of oil and gas have been hindered by the legal and economic conditions compelling
highly competitive drilling and production methods in a common pool. These
uncontrolled practices, engendered by human traits and interpretations rather
than by physical laws and desirable economic considerations, have led to
physical and economic losses.
 The actual physical losses of oil at the surface are relatively small compared
with the total production of oil. The proximate~and contributing causes of
these surface losses are well known, and in general engineering methods have
been devised to bring them under good control. The quantity of oil lost~
through spifiage now is almost negligible, although the disposal of oil-field
(also refinery and tanker) waste has been costly to the petroleum industry.
In the absence of steel storage earthen pits have been and still are used.
Confronted by highly competitive drilling and production practices some operators
hold that it is better to lose an appreciable quantity of oil through seepage
than to lose their oil through underground drainage across property lines.
It has been estimated that the total evaporation and leakage losses for 1
year in the handling of oil from the wells to the ultimate consumer of gasoline
is about 3 ~ percent. This percentage probably can be reduced appreciably
if the best-known engineering practices are applied to keep the oil in the
ground until needed.
 Although calculation of the actual surface losses of natural gas up to now
would reach astronomica~I dimensions if it were possible to measure them
in cubic feet, an active and well-defined movement has been made by industry
and government (State and Federal) to control factors contributing to natural-gas
losses. Some engineering factors of natural-gas conservation are discussed
in report V of the Federal Oil Conservation Board to the President of the~Uriited
States, 1932, pages47 to 56.
 Underground losses of oil, dissipated gas energy, and economic losses resultmg
from highly competitive development programsand