It’s so obvious that people have short memories. Let’s look at the energy situation and it’s history a little more closely.
It’s only been a bit over 6 moths ago when oil futures went, and stayed, above $100 per bbl. A year ago oil was priced at $75.00 per bbl. Not good, but still reasonably affordable. The year before that, oil was less than $50.00. So,,, this oil crisis is a relatively short term thing, not a long term issue we’ve struggled with for the 8 year Bush Administration.
What non-oil business folks don’t know about the domestic production landscape is that for 30+ years it cost more to explore for and produce American oil than it was worth on the market. Labor, associated acquisition, permit fees, and material costs here far exceed that paid out in any of the OPEC countries. All of which BTW, explains why we can’t compete when oil prices fall much below $25.00 per bbl.
However, in those aforementioned 30+ years, there has been a steady demand for domestic natural gas, we could make a living exploring for, and producing gas. Virtually every American independent “oil” company found itself caught flatfooted and short on oil properties when oil prices suddenly went skyward. Every one I know in the business had so concentrated on the gas side of production for so long we are almost universally 85% gas, and 15% oil. And the 15% oil was by accident. In other words, the industry looked up one day and found itself upside down in the market place. The scramble is now on to reverse those numbers, but it won’t happen overnight.
Another problem faced by the domestic energy companies right now is the absence of trained people. For over 30+ years domestic drilling has been curtailed, exploration for new fields has been put on the back burner for most of the CONUS and all the near off-shore regions, no new refining capacity has been built, etc. That job market just dried up. People in the business 30 years ago were forced to go find something else to do. Where are we going to grow a new crop of geophysical experts to get back up to speed? There are darned few recent graduates with earth science degrees out there. Almost every man I know in the business right now who knows his butt from 3rd base is between the ages of 50 and 68, the competent oil and gas men of the 1970s and 80′s are a dying breed. Start up costs for seismic operations are outrageous, land owners are demanding higher leasing fees, environmental restrictions are,,, well, restrictive, and so on… There is a whole litany of issues the public isn’t aware of that must be resolved before a gallon of domestic gas gets pumped into your car’s tank.
There isn’t a handful of Washington politicians who have any idea of what they are talking about regards domestic energy. Yet, this election cycle the voting public wants the candidates to “come up with a plan”, like magic, to solve their problems. This is why the Democrats should have a clean sweep at the polls in November. They are the ones who promise pie-in-the-sky, with no substance to their statements. I watched Obama speak on the subject in PA (on TV), and I’ve never seen more ignorant words coming out of one mans mouth in my life, he was so obviously over his head, yet the audience was eating it up like candy. He’s got them fooled… Big time.
If you like what has happened to the U.S.Postal Service, you are gonna love a government controlled oil company.
Just some food for thought.
