Accident Prevention and Its Practical Application to Drilling and Producing

Operations t
ABSTRACT
The author states that accidental injuries in producing operations constitute an unnecessary waste, and are
an indication of inefficiencies in operating methods;
therefore, accident prevention constitutes a niajor probleni for consideration by operating executives and workers alike.
He recommends:

1. The preparation and adoption of state petroleum

safety orders to co~npelthe negligent operator to
provide safe equipment and adopt safe operating
methods.
2. That accident prevention be made a definite part of
all operating programs, as the elimination of niistakes prevents the mishaps which damage equipment o r . injure workers.

Compensation Costs
As executives a n d engineers of the production division
of the petroleunl industry, your primary interest i s t h a t
of getting oil t o t h e surface a t t h e lowest possible cost.
Your purpose h e r e today i s t o discuss your mutual
problems, exchange experiences and develop ways and
means of reducing costs a n d improving efficiency. The
interest of t h e accident-prevention engineer in t h e petroleum industry i s not foreign t o your own interests.
H e also i s concerned with lowering costs and improving
efficiency through t h e elimination of waste and the reduction of mishaps which b r i n g about i n j u r y to workmen and damage t o equipment.
Accident prevention makes no special claini to virtue
on the ground t h a t t h e work i s humanitarian. I t is well,
,of course, t h a t industry is human enough t o spend money
and to plan work so t h a t i t s employees will be spared
t h e physical pain a n d t h e financial loss which follow i n
t h e wake of accidents. This personal interest i n t h e
welfare of 'its workers on t h e p a r t of industry, within
itself, pays good dividends; but accident-prevention work
produces a more direct r e t u r n t h a n this. It justifies itself and pays i t s own way by reducing insurance costs,
lessening absenteeism, saving equipment, a n d increasi n g efficiency. Proof of these f a c t s may be found in t h e
records of hundreds of oil companies, i n t h e reports of
t h e National S a f e t y Council, a n d i n t h e office of t h e
Institute's own Accident-Prevention Department.
' b ~ n spacific Coal nn8 Oil Co.. F o r t W o r t h Ten.
f presented a t S p r i n g Meeting, ~outll\veste;u Ijistrict. F o r t
\Vortl~.Tes., A p r i l 1984.

That closer attention be given to the selection of

workers and the placing of applicants on jobs
according to their qualifications.
Greater effort in instructing the new nian concerning his work, his company, and the industrythereby increasing his interest in. and understanding of, his work.
Developliient of standard operating procedures to go
along with A.P.I. eqoipnient standards (reference
is made to the A.P.I. accident-prevention nianuals
and production codes).
Continuous inspection of properties by interested and
esperie'nced workers.
That fire and accident-prevention protective equipanent be provided, and workers instructed in its
care and use.

I n 1927 one worker out of each unit group of' six i n

t h e production division of o u r industry suffered a losttime accident. F o r t h e y e a r 1933 this record had been
improved t o a point where only one worker out of
seventeen sustained a lost-tiinel injury. Viewing i t
strictly f r o m a dollar-and-cents standpoint, this reduction in disabling injuries h a s meant thousands of doll a r s to t h e industry. Insurance r a t e s of m a n y individual
companies have been reduced, self-insured companies
have cut claim costs a n d ' h a v e shown a: n e a t profit, cost
of equipment replacements and repairs have been lessened, and all other incidental o r indirect cost items
which arise by reason of accidents have been reduced.
In spite of t h e f a c t t h a t a comparatively large group
of operators have improved their accident experience,
t h e basic r a t e s f o r compensation insurance in this s t a t e
have continued t o increase. Since t h e majority of oil
companies in Texas buy this class of insurance, . t h i s
cluestion i s of particular importance t o t h e industry a s
a whole. I n order to impress upon you t h e rapidity of
this increase i n t h e p a s t f e w years, a n d t o point out t o
you t h e extent of t h e burden of con~pensationcosts, I
wish to make, a few comparisons. I n 1927 t h e r a t e p e r
$100 of payroll f o r classification No. 6202,. " Oil Development," i n t h e s t a t e of Texas w a s $7.35. I n , 1932
t h e r a t e had increased t o $10.55 per $100 of payroll; a n d
in 1933 a f u r t h e r increase was made, bringing t h e
premium u p t o $12.85, which r a t e prevails today. L e t
me call your attention t o t h e f a c t t h a t t h i s r a t e increased
d u r i n g t h e period i n which our accidents showed a decided decrease over t h e United States a s a whole.

Seventeen producing companies reported their accident costs to the American Petroleum Institute, Department of Accident Prevention, f o r t h e year of 1931. This
'eport included, in some cases, the 'accident costs of
drilling operations. This report also indicated a cost

a n d operations to meet t h e new requirements; B u t t h e

saving effected in his insurance costs over a two- o r
three-year period would more t h a n offset the additional
expense to which h e is p u t i n order to make these necess a r y improvements.

TABLE 1
Compensation Rates, 1933-1932

Texas
i933
Rotary drilling . . . . . . . . . . . . . . . . . . . . . . .$12.85
Production . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.89
Pipe-line operation .................... 2.83
Pipe-line construction ................. 8.31
Natural-gasoline operation ............. 5.23
Refining .............................. 3.14
Marketing ............................ 2.00
of injuries of $1.68 per $100 of payroll. How does this
figure compare with t h e compensation rates now in
effect? Your attention is invited to the compensation
rates given in Table 1.
What is the answer? Are production operations in
Texas more hazardous than those in other p a r t s of t h e
country? H a s our experience been such a s to justify
this r a t e ? As one operator stated a t a meeting which
was held in F o r t Worth some two weeks ago f o r t h e
purpose of discussing t h e compensation-insurance problem: either we a r e paying too much f o r insurance, o r
our operations a r e too dangerous to permit u s to continue in business. With t h e majority of operators in
Texas, I a m inclined t o think t h a t the former condition
exists-we
a r e paying too much f o r insurance. However, there is a certain group of companies and individuals in the oil business in T e s a s today whose operations a r e too hazardous and whose high accident frequency is increasing t h e compensation costs of the industry a s a whole.
Without the aid of state safety orders, I do not believe we can even hope t o bring into line the operator
who is now ignoring safety measures. This class of
operator has been appealed to, preached to, and threatened; but he still persists in following unsafe practices
in the conduct of his business. Only a few months ago
your casualty-insurance commissioner started out on a
program of drafting s t a t e industrial safety orders; but,
for some reason unknown, t h e work h a s been dropped
o r passed by f o r t h e time being. However, such orders
wil! come eventually, and I feel t h a t the petroleum industry should take the lead in the promulgation of
these orders. In this w a y we can be assured t h a t the
orders a r e not burdensome o r impractical.
The operator who today is carrying on organized accident-prevention work would probably have no additional outlay of expense in complying with such orders
a s may be set up. On the other hand, the operator who
is not doing this a t the present time and who, by reason
of his bad experience, is increasing the r a t e of insurance
f o r all of us would be forced to improve his equipment

Oklahoma
1933

Same
a s for
1932

+
1932

California
&

1933

1932

$11.62
3.61
2.22
5.34
5.17
4.32
3.45

Economic Value
Tables 2 a n d 3 give a r a t h e r comprehensive picture
of t h e economic value of accident-prevention work i n
Tesas :
TABLE 2

Manual r a t e f o r code 1321-Oil- o r gasproducing-operation of leases-$4.89 per

$100 of payroll.
Credit of 50 per cent due to good " no accident " experience would reduce this r a t e to
$2.45 per $100 of payroll.
Assuming t h e annual payroll on a given
lease was $50,000, this credit due to good
" no accident " experience would mean a
saving in insurance cost of $1,220 per year.
On the other hand, a debit of 50 per cent
dver manual r a t e due to bad experience
would increase the insurance cost by $1,220.
The difference then between the cost of insurance on a lease safely operated and
carrying a credit, and t h e lease inefficiently
operated and penalized by a debit, is the
difference between $1,220 and $3,665, or a
net of $2,445.
TABLE 3

Manual r a t e f o r code 6202-oil- o r gas-wells

development-$12.85
per $100 of payroll.
Credit of 50 per cent due to good " no accident " experience would reduce this r a t e to
$6.43 per $100 of payroll.
Assuming t h e drilling payroll of a firm
r u n s $100,000 per year, this would mean
a saving of $6,430 annually on conipensation-insurance costs.
A debit of 50 per cent over manual would
increase t h e insurance costs by a like

amount, making a n annual prelniunl of

$19,280.
The difference between the cqst of insurance where t h e 50 per cent credit i s established and the cost under a . 5 0 p e r cent
debit i s $12,850.

State safety orders would also insure more o r less

uniform methods of personnel training; and, with standa r d guarding specifications, we could clemancl that manufacturers meet these requirements-thereby
effecting a
saving in the cost of training a n d mechanical-guarding
programs in t h e industry.
Fro111 the discussion t h u s f a r we cannot deny t h a t
accident-prevention work h a s a very definite place in
the picture. The next question is: how i s it to be accomplished? My answer is: hy making i t a part of the
operating program. ,

Method o f Application
The methods of applying t h e program mill vary according to the set-up of t h e organization and the size of
the coillpany. The first of these methods is that of
setting a n example. The executive and t h e supervisor
must definitely manifest their interest in, and support of, the work if they hope to win t h e cooperation
of their elnployees i n t h e work. It is not sufficient t h a t
the executive announce the inauguration of a program
and place someone in charge. H e must show a n active
and a continued interest. I n order successfully. to establish i t a s a pllase of t h e operating program, he must,
in determining t h e efficiency of the operation, take into
account the cost of accidents. In making promotions,
by considering t h e accident record of the supervisor,
t h e executive convinces t h e personnel of his organization t h a t his interest in t h e welfare of his e~nployees
is sincere, and he shows the key men t h a t lle desires
that accident prevention he given equal importance with
other phases of operation.
The'attitude of t h e supervisor will be reflected in the
attitude of the workmen under him. If he himself indicates a sincere interest in eliminating accident-causing
conditions, and sets the example of safe practices, his
e~nployeeswill do likewise. On the other hand, if he
displays a n attitude of indifference, h e will cause the
men to feel t h e same w a y towards t h e work. Workmen normally support those things t h e " boss" sanctions, and a r e against those things he does not favor.
The accident-frequency chart is a n almost infallible
guide a s t o t h e supervisor's interest i n t h e safety
program.
The trial-and-error method of selecting applicants f o r
e~nployn~ent
i s rapidly passing out of t h e picture. The
progressive supervisor, r a t h e r than hire t h e first individual who presents himself f o r work, now carefully
interviews each applicant, eliminates t h e unfitted, and
attempts to choose the one who can best meet the job
requirements. The decrease in t h e amount of spoiled
work, damaged equipment, loss. in production, and the
excessive number of accidents resulting f r o m following

.'

the trial-and-error method is convincing proof t h a t t h e

time and money spent in t h e present-day method of interviewing and systematically selecting the applicant i s
well justified.
I n order to select the r i g h t man f o r the right place,
t h e supervisor m u s t first know the job requirements.
Job analysis, therefore, seems to b e necessary. Ordinarily, t h e supervisor's knowledge of t h e skill, experience, and temperament required on a part.icular job i s
sufficient to enable him to make a n intelligent selection;
but, a job analysis-listing
those things t h a t the .man
lnust know and do-\vill be found particularly helpful
to the interviewer, a s i t insures t h a t nothing will be
overlooked.
Since most companies now follow the policy of having
all applicants examined physically before placing them
on the payroll, t h e supervisor is usually relieved of t h e
responsibility of passing on t h e man's physical condition, other t h a n t h a t of eliminating those men who
possess such apparent defects a s missing o r crippled
limbs, defective hearing, serious impairment of vision,
etc., and of choosing those individuals whose physical
stature makes them especially fitted to perform t h e
task f o r which they a r e being considered.
Choosing t h e man with t h e proper mental attitude
and temperament is, however, a difficult task with which
the supervisor is charged. The worker must be cooperative, open-minded, a n d must possess a willingness t o
learn; otherwise, he lacks t h e foundation essential to
developing into a n efficient employee. A- man may be
capable of t u r n i n g out a quantity of work of desired
quality; but, if his disposition' is such t h a t he cannot
work harmoniously with t h e group a n d conform to t h e
established procedure, he is of no value to the organization. The supervisor must be a keen student of human
nature in order to be able to talk with a n individual and
to determine whether he possesses those qualities of
mind and of character whi'ch will enable him to fit into
the organization set-up.

The next step is t h a t of instructing t h e new man.

Even the individual who i s physically qualified, temperamentally suited f o r t h e job, and esperienced in t h e
work must be instructed a s to work procedure a n d safe
practices. Methods v a r y a s between companies or, f o r
that matter, a s between districts within one company;
and the new employee should be informed on these
points.
Your standardization committees have done a g r e a t
deal of worthwhile work in developing standard practices f o r t h e use and care of oil-field equipment a n d i n
drafting specifications. The savings to t h e industry
through this program amount to lnillions of dollars
ailnually. Your accident-prevention department h a s
undertaken a similar program with reference t o t h e
training of the personnel. Safe-practice manuals, outlining the best methods enlployed by t h e leading con]panies in t h e industry, have been developed. The material in these manuals w a s contributed by companies

from all parts of the country, and a large percentage of

the American Petroleunl Institute membership had a
part in their development. We know, then, that 'the
suggestions given a r e based on the safest and the most
efficient practices employed by petroleum companies.
There are available a t this time manuals covering
the following subjects: organization for accident prevention, safe operation of automobiles, safe practices in
tank cleaning, safe practices for well pulling. Other
manuals are in the course of preparation, and will be
released a s soon a s they a r e completed. Copies of these
manuals may be obtained from the Department of Accident Prevention, American Petroleum Institute, a t
Dallas.
Safe-practice ~nanuals, like standardization specifications, are beneficial only when they are put into use on
the job. The enterprising supervisor will find in these
manuals a wealth of material suitable for use in properly informing the new man or in keeping the esperienced employee in step with the changes in operating
methods which a r e constantly taking place. They are
prepared so a s to be understandable by the average
worlter, and will serve a beneficial puypose if passed
out to the men with instructions that the manuals are
to be read and the recolnmendations followed. However, better results will be obtained if a follow-up is
made by the supervisor in discussing the practices covered with the individual or through the safety meeting.
The man with limited esperience, or.the individual that
is to be assigned to a particularly hazardous work,
should be introduced to the job by the supervisoi-, and
the work procedure explained. Dangerous conditions
and practices should be pointed out, and the man shown
liow to avoid the hazards. One production foreman
in our own company has followed the practice of showi n g the ne\v man his job and illustrating safe practices
which are necessary in order to avoid accidents, and
such effort has been we11 rewarded. He has not only established the lowest accident frequency of any production district, but has developed a spirit of loyalty
and job pride among his inen which has reflected itself
i n increased efficiency and lowered operating costs.

Continuous Training
The supervisor's task is not completed even after the
proper applicant has been selected, instructed in the
~ o r k and
, pIaced on the job. His training must be continuous in order to be effective. The fact that new work
i s always on hand, that new inethods are introduced,
and that men forget readily, makes it imperative that a
colltinuous program be followed. The advice and instruction given by the supervisor to the nlan while engaged in his work is the most effective accident-prevention effort. This plan definitely ties safety in with
She operating program, and impresses the individual
with the fact t h a t the safety of the nlen is not to be
sacrificed for the sake of speed or the false economy of
using inferior materials or defective tools and equipment. A close contact with the man on the job will also
enable the supervisor to study the working habits of

the men, and to observe whether they are following

practices or creating conditions likely to cause accidents. We are told that a n unsafe practice is ordinarily
indulged in some 300 times beforeJhe personal-injury
accident results. I n other words, the injury results
only once in a unit group of 300 mishaps. I t is evident,
then, that the supervisor who maintains a close contact
with his men, and who observes whether his instructions are being carried out, will be able to correct many
practices and conditions before they result in accidents.
Periodical employee safety meetings also offer a wonderful opportunity for informing men as, to the right
and the wrong methods. A large percentage of the
oil, companies is holding these meetings, and I believe
a brief discussion a s to the ways and means of .maintaining interest in such n~eetingsi s in keeping with
this subject. In the first place, I affirm that all meetings should be conducted by the operating department.
I n - other words, the safety or other departments should
not undertake to lead the meetings. The district foreman or the field superintendent is more familiar with
the hazards of this work and, therefore; better qualified
to lead discussions than anyone else. It is also true that
the elnployees will be more likely to accept the work a s
a definite company policy and a p a r t of their jobs if
their own boss directs the program in his district than
they would if someone froin the "head office " came out
to tell them how to run their jobs. '
The safety meeting, to be interesting, should not last
much longer than a n hour. Few speakers can hold the
interest of any group, even though discussing a most
i11terestil;g subject, for a greater length of time. Comfortable meeting places should be provided. A building
sufficiently large, equipped with ample seating facilities, properly lighted and adequately ventilated, is desirable. I think, also, that the meetings sliould be entirely informal, and that opportunity should be provided for each and every man to take part in the discussion. In my own conlpany our plant and field superintendents are conducting very interesting meetings by
using the conference method f o r developing discussion
on the various subjects. Charts or blackboards a r e used,
and the group is asked t o contribute its ideas on the
subject-all of which are recorded on the board or chart..
This method encourages discussion, and guides i t along
the channels which the leader wishes it to take.

Vocatio~~al
Training
We have recently begun a program of analyzing the
various job classifications by the conference method,
and have found that such analysis not only points out
the outstanding hazards of the work and develops
methods ,of protection, but that i t also informs men
along lines of waste elimination and economy in operation. Incidentally, the conference method was introduced to industry by the Department of Vocational Education of the several states, and the service of a teachertrainer from this department may be obtained in instructing foremen or other key men in conference
leadership. .
,

conditions found. I n addition, both t h e district foreman

and the f a r m boss inspect the properties regularly i n
order to locate a n y hazards which might have been overlooked o r purposely omitted from the report of t h e
pumper o r t h e roustabout.

I n connection with vocational work, I should like t o

call your attention t o t h e very worthwhile work t h a t
i s being done by your topical committee in developing
a comprehensive job-training course f o r t h e production
division of t h e industry. This program is of distinct
value i n accident-prevention work. I t s purpose is better
t o inform t h e worker a s t o his industry, his relationship
t o t h e operations a s a whole, and to improve his knowledge a n d ability on his own particular job. A number
of colnpanies have already adopted definite vocationalt r a i n i n g programs, a n d t h e company t h a t fails t o do
this is, i n m y opinion, passing a n opportunity. Likewise, t h e individual in t h e industry who fails t o t a k e
advantage of such t r a i n i n g when t h e opportunity is
offered will eventually be replaced by t h e man who h a s
better prepared himself.

Protective Equipmeat
I t is equally a s i m p o r t a n t t o provide safety belts,
goggles, a n d other protective equipment a s i t i s t o f u r nish safe tools a n d equipment. A knowledge of t h e work
where protective devices a r e necessary will enable t h e
supervisor t o determine w h a t is needed a n d t o secure
a n d place t h e equipment. Oftentimes g a s masks, goggles, belts, a n d other protective devices a r e furnished
the men without a n y instructions a s t o their use. The
investment i n such equipment is lost when this i s
done, because i t i s either not used a t all o r i s used
improperly. T h e question of getting the men to use
goggles, s a f e t y belts, etc., i s again a matter of traini n g a n d discipline. Instruction on m a t t e r s of safety
can be enforced a s effectively a n d i n the same way t h a t
instructions in t h e other phases of operation a r e enforced. T h e employee who disregards instructions a n d
fails t o w e a r goggles, thereby losing a n eye a n d costing
his company a thousand dollars, i s in t h e same category
with the pumper who f a i l s t o c a r r y out orders a n d permits the stock t a n k t o spill over a volume of oil of
comparable value. Both cases indicate a laxity i n supervision through failure t o follow u p on instructions.

Property Mainte~iance
I have subordinated t h e question of inspection and
correction of physical hazards to t h a t of selecting, placing, and t r a i n i n g m e n ; because experience h a s shown u s
t h a t t h e f a i l u r e of t h e worker, r a t h e r t h a n t h a t of
equipment, causes t h e majority of our accidents. However, i t i s essential t h a t properties be properly maintained, a n d t h a t s a f e tools and equipment be provided.
Even though t h e physical hazard i s not responsible f o r
many accidents, f a i l u r e t o correct such conditions will
materially affect t h e t r a i n i n g program. A successful
accident-prevention program demands t h e full cooperation of each a n d everv worker, a n d i t will be difficult to
obtain such cooperation if t h e employee feels t h a t t h e
company is not sufficiently interested in t h e yorkers'
welfare t o spend t h e inoney necessary f o r maintaining
physical property i n a safe condition. I t . is also t r u e
t h a t t h e small percentage of accidents occurring a s a
result of equipment failures is usually of a very serious
nature; and f r o m the economic, a s well' a s from t h e
humanitarian, standpoint a sensible g u a r d i n g program
and a definite plan of equiplnent maintenance is justified.
I a m i n f a v o r of t h e operating deljartment's undertaking t h e entire job of inspecting properties and carryihg out t h e maintenance program. Again, accident prevention should be made a regular p a r t of t h e job. If
t h e safety department i s given t h e t a s k of discovering
and remedying unsafe conditions, unusual circumstances
will a r i s e ; o r new work will be created between inspection trips, which will demand emergency measures. If
the safety engineer is relied on entirely to point out and
to advise on such matters,.the work will be delayed, or
unnecessary chances will he taken i n l~roceedingwithout first working out t h e problem of proper protection.
We haye developed a n , inspection report form, and
each pumpei. i s required t o check his leases and report
on t h e condition of rigs, powers, and other equipment
under.his jurisdiction. The roustabout, likewise, i s required t o check his truck, tools, and other ecluipment
periodically, a n d t o f u r n i s h his supervisor with a report of conditions .found. The district foreman checks
these reports when they.. come in, a n d authorizes t h e
work necessary f o r t h e correction of t h e unsatisfactory

Goocl H o ~ ~ s e k e e p i ~ ~ g

F i r e prevention a n d fire protection i s a problem of

major importance in producing operations. F i r e s a n d
explosions were t h e greatest single cause of f a t a l accidents in t h e industry d u r i n g 1032, a n d t h e property loss
each year f r o m fires i s tremendous. Inadequate venting,
use of low-pressure equipment f o r high-pressure service, improper location of equipment, arid poor housekeeping conditions a r e frequent causes of fires and esplosio~is. It would a p p e a r , then, t h a t more thought
should be given t o selection of equipment, installation,
and hook-up, a n d t o t h e maintenance of all properties
in a neat a n d a n orderly condition. Nothing i s saved
hy using old equipment if t h a t equipment fails and
men a r e injured a n d other property damaged.
Good housekeeping is largely a m a t t e r of cleaning
up and then developing t h e habit of keeping cleaned up.
The development of job pride is one of t h e blggest factors in establishing good-housekeeping practices. If t h e
worker can be made t o feel t h a t neat-appearing properties reflect favorably a s to his interest and ability,
i t will influence h i m constantly to strive t o live u p t o t h e
good opinion t h a t h a s been expressed of his work.
Fire-protection e q u i p n ~ e n t should be considered a s
first aid. A n y fire can be controlled if i t i s reached in
time, and if t h e proper extinguisher is a t hand. F o r this
reason, i t i s i m p o r t a n t t h a t ecjuipment be properly
placed, chemical extinguishers properly charged, a n d

t h e personnel trained i n t h e use of equipment. The use

of t h e different types of extinguishers, and the class
of fires f o r which they should be used, might well be
explained a n d demonstrated periodically. The safety
meeting offers a wonderful opportunity f o r " g e t t i n g
across " this instruction.
I n conclusion, I should like t o leave with you this
thought: JJle a r e approaching the time in our industrial
development when a n organization can no longer justify
i t s existence simply by e a r n i n g dividends f o r t h e stockholders. T h a t , of course, i s still necessary; but a changi n g order is imposing upon u s added responsibilities to
t h e public and t o our en~ployees. We must render a n
efficient, economical, a n d courteous service to t h e public; and we a r e also called upon t o extend greater privileges t o en~ployeesa n d t o account f o r our policies of
personnel control. These changes call f o r the highest
type of leadership, a n d t h e supervisor who recognizes
new responsibilities with which he i s being shouldered,
and who prepares himself t o meet t h e problems of t h e
changing order, will be able t o develop among his own
group t h a t spirit of loyalty a n d job pride which i s essential t o low accident frequency a n d lowered operating
costs.

R. W. Black (chairman, Petroleunl Section, National

S a f e t y Council) : S a f e t y a s a personal problem i s certainly t h e basis, t h e foundation, of accident prevention;
b u t unless management accepts truthfully i t s responsibi1ities;accident prevention, like all phases of business,
will suffer. Management's acceptance of t h e responsibility f o r accident prevention will go f a r toward elimin a t i n g accidents. I a m lnightly glad to be with you, and
hope t o get better acquainted with you.

Voice: I should like t o ask if t h e increases i n conlpensation r a t e s a r e peculiar i n Texas, or a r e they

general throughout t h e country?
Mr. Hightower: T h e increases have been practically
t h e same i n Oklahoma, b u t not i n California 01- a n y of
t h e other states-indicating t h a t t h e r e a r e other factors
entering into t h e picture. This brings u s back t o t h e
point t h a t t h e operator who i s not doing anything about
his accident esperience is having a n effect upon t h e
whole picture. We stress this point, because i t can be
corrected if we get ,behind it. S t a t e petroleun~safety
orders will not mean t h a t t h e operator who i s doing
his p a r t will have t o s p e l l d x y more money, but t h e
operator who is neglecting safety measures i s going
t o have t o improve his operating methods. H e will have
t o spend some money, b u t t h e saving effected i n his own
insurance costs will more t h a n offset a n y additional
expense. The drilling r a t e in T e s a s i s $12.85; i n Oklahoma, $11.52, a n d i n California, $6.81.

Voice: I should like t o ask Mr. Hightower how he

figures, with this improved accident experience, we
should be assessed higher compensation-insurance rates.
Unquestionably, we a r e doing more safety work a s a n
industry t h a n i n 1927.
Mr. Hightower: One of t h e factors which h a s contributed to this increased compensation cost i s . t h e
operator who i s not doing a n y t h i n g about accident prevention. Flush fields, such a s Oklaholna City a n d E a s t
Texas, have brought into t h e picture many operators
\\rho do not have t h e money t o invest i n suitable equipm e n t , ~t h~a t they can employ proper safety measures
a n d safe equipment. W e a r e drilling lnore wells t h a n
i n 1927, and we h a v e more operators of t h a t type.
T h e r e a r e more shoe-string operators i n t h e flush fields,
particularly E a s t Texas. T h e first year a f t e r t h e E a s t
T e s a s field came in, some t h i r t y odd workers were killed.
Some operators i n flush fields a r e guilty of going
ahead with too much speed a n d not taking precautions;
their main idea seems t o be t o g e t down t o t h e pay sand
a s quickly a s possible, a n d other things are subordinated.
Another t h i n g t h a t h a s contributed t o t h e increased
r a t e i n Texas h a s been t h e f a c t t h a t t h e Industrial
Accident Board a n d t h e courts h a v e placed t h e most

Voice: May I make this observation? JVe have a very

unfortunate situation in Texas. A s I understand i t i n
Texas, if a c l a i ~ nis presented by a n y individual, whether
meritorious or otherwise, i t i s necessary t o do t w o
things. F i r s t , you must go before t h e Industrial Accident Board, a sort of clearing house a n d record-keeping
agency which, a f t e r a hearing, m a y make certain
awards. The law f u r t h e r provides i n event either p a r t y
does not desire to abide by t h a t a w a r d , he can go t o a
higher court-which
means i n substance you not only
have t h e burden of going t o Austin, but i n addition t o
t h a t you have t o go before t h e district court and defend
yourself, which means a dual expense. Some other s t a t e s
do not have t h a t double expense; i n Oklahoma, you go
before t h e commission which h a s the same judicial
power a s t h e district court-thus
your expense i s a t
least resolved into one body r a t h e r t h a n several. Another t h i n g peculiar t o these claims i s t h a t t h e board,
apparently, makes no effort t o determine their validity.
I know their schedule i s usually some 90 days behind.
D u r i n g t h e p a s t several years i t h a s been a problem. I f
anybody h a s a n y kind of a claim, h e can file i t through
some " shyster " lawyer, who i s usually successful i n
substantiating t h e claim; a n d nobody h a s time, ap-

DISCUSSION

miserable interpretation upon our compensation laws In

Texas. W h a t w a s originally designed a s a provision t o
t a k e care of t h e injured worker i n t h e w a y ,of paying
medical expenses, usually h a s been construed by t h e
courts t o cover practically t h e same benefits a s given
under a n employee's health a n d accident policy. Somet h i n g i s going t o have t o be done t o remedy such defects, i n t h e w a y of getting proper administration of t h e
l a w by t h e Industrial Accident Board a n d t h e courts.
I f every single operator will lend his support t o legislation t o r e ~ n e d yt h e defects i n t h e law, something can be
done about t h e incompetent judges administering o u r
laws a t t h e present time. Men who a r e competent a n d
qualified a n d who a r e not governed by political interests
can be p u t into these offices.

parently, t o investigate. \\'hen we have investigated,

we have been able to defeat some of t h e claims of these
hungry lawyers.
Roy Jones (Panhandle Refining Company) : Our oil
and g a s association in North Texas h a s a com~nittee
on this compensation law. We have done a great deal of
work, and have given much study to the trouble with
our law a n d t h e r a t e increase. T h e gentleman who just
talked brought u p one of t h e serious things which is
the matter with our law, but he did not bring u p the ,
thing in connectioli with i t which causes the rates to
go u p I think t h a t t h e most serious trouble with the
law is t h a t t h e finclings of t h e Industrial Accident Board
a r e not final a s to fact.
The lawyers go before t h e Industrial Accident Board
representing a client, who has had a n accident. They
present his claim to t h e board, and the board esamines i t
thoroughly, and makes a n award. F o r t h a t service the I

lawyer is allowed under t h e law 15 per cent of the

settlement; b u t if h e takes t h e case to court h e can get
334 per cent of t h e award. T h a t is a uronderful incentive
to a lawyer to induce his client to go on to court. The
client may not get a sitlgle dime in final settlement, o r
there may be a delay of a year o r even two years before he gets his money. H e may come out with t h e
same award o r even less, b u t the lawyer gets one-third
instead of 15 per cent. T h a t i s one of the most serious
things the matter with out present law. . .
We have introducecl bills in Austin for about three
consecutive ternls t o t r y to change t h a t law, b u t have
not had enough support to get i t over. I think there
should be a movement under way; in fact, there is one
being organized now; t o re-write this law and get a
united front to pass it. If t h a t one thing can be changed,
I believe i t will make more difference in our r a t e situation than a n y other change which can be made in the
law.