In 1920 the gross income of the U. S. natural gas industry was $196,000,000. In 1929 it was over $400,000.000. Ten years ago the industry was localized in the Ohio Valley. Today Texas, Louisiana, Oklahoma and California are centres of huge production. The construction of long, high-pressure pipe lines (such as the 540-mi. system extending from Monroe, La., to St. Louis), the constant investment of new capital (total natural gas investment is now nearly $2,000,000,000 as compared to $12.000,000,000 in the petroleum industry) and the growing appreciation of natural gas as an easily handled, highly efficient, relatively inexpensive fuel for both domestic and industrial uses, has resulted in a 1929 production (1,568,000.000 cu. ft.), approximately doubling the production of six years ago.
An industry expanding with such rapidity, and especially a public utility industry with long-distance transmission lines lending themselves to the formation of super-systems, is certain to consolidate as it grows. Last week was announced a major gas consolidation in the southwest. Companies affected are Louisiana Gas & Fuel Co., a subsidiary of Electric Power & Light (which in turn is controlled by Sidney Zollicoffer Mitchell’s Electric Bond & Share Co.) and United Gas Co., which Odie Richard Seagraves organized in 1928. Mr. Seagraves, together with William Lewis Moody III, constitute what is commonly known as the Moody-Seagraves interests. Able promoters, Mr. Moody and Mr. Seagraves have developed many a Texan and Southwestern industry, including hotels, cosmetics, railroads. Mr. Seagraves has a large ranch at Kerryville, Tex. Although the new gas company will be organized as a subsidiary of Electric Power and Light, Messrs. Seagraves and Moody retain a large stock interest and will in all probability be represented on the directorate. Electric Bond & Share will have a controlling interest in the as yet unchristened new company, which will also purchase from Standard Oil of New York the natural gas properties in Texas and Louisiana owned by Magnolia Gas Co., a Standard subsidiary.
From a natural gas standpoint the new company will rank with Columbia Gas & Electric Corp. and Cities Service Co. It expects to market some 190,000,000,000 cu. ft. of natural gas in 1930. The operating gross revenue of its constituent companies, from natural gas alone, totaled $22,000,000 in 1929 and is expected to reach $26,000,000 in 1930. There also will be considerable revenue from oil, sulphur and gasoline operations. The territory served extends from St. Louis to Monterey, Mexico, including cities such as Atlanta, Birmingham, Memphis, New Orleans, Dallas, Fort Worth. Beaumont, Houston, San Antonio, Austin.
Significance of this consolidation lies: in the extended influence of Electric Bond & Share; in the drift of the natural gas business away from its petroleum and toward its public utility affiliations; in the probable status of the newly formed company as the first of many far-reaching consolidations which should ultimately create a super-gas situation comparable to the already existing super-power systems in the electric field.
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