The production of crude oil in the United States is exceeding consumption byone-quarter million barrels per day and, with the possibilities of West Texas, this condition of overproduction, unless controlled, is likely to continue forsome time. The resulting low price of oil has caused the operator to observeclosely his lease operating costs. The installation of more efficient andreliable machinery has followed and it can well be said that the art ofproducing oil is on the threshold of a new era. In this advancement electricityhas played a leading part. This paper covers only the problem of electricity as applied to leaseoperation and does not consider other phases of the industry, such as drillingand pipe-line pumping, in which electric power has been utilized economically.In considering electrification of pumping wells, the first question theoperator asks is whether or not his costs will be reduced and the secondquestion is whether or not the production will be increased. The thirdquestion, although in effect it is closely allied to the first, is the cost ofpower. The last question can be answered only after a thorough analysis ofoperating conditions and a study of the power rates prevailing in theparticular field under consideration. Within the past few years, the powercompanies have realized the desirability of a steady 24-hr. pumping load, havemade their rates for oil-field service particularly attractive, and in generalhave shown splendid cooperation in assisting the oil companies in thesatisfactory application of electric power to their leases. When everything is taken into consideration, the first cost is practicallythe same for electric drive as for gas engines when pumping on the beam withindividual motors. This cost, at prevailing prices, should averageapproximately $2200 to $2400 per installation when using 15 to 35-hp., two-speed pumping equipment, including motor and control, countershaft, motorhouse, belt, installation charges, and a prorated portion of the cost oftransmission lines and transformers for serving a number of wells. Since thereis practically no difference in the cost of the two installations, it isevident that electricity, to justify its consideration, must have a loweroperating cost or produce more oil.