Myth: Oil is a “GIANT” owned by “THEM”.
Fact: The major oil companies are publicly held, not privately owned by a few of “THEM”. Millions of Americans have secure investments in the oil industry to fund countless savings and retirement accounts, pension funds and life insurance policies for retirees, teachers, government workers, widows and others.
Myth: Oil companies destroy the environment.
Fact: Oil companies spend $8 billion annually in environmental research, prevention and related areas, which exceeds the annual budget of the Environmental Protection Agency. Oil companies coexist with the environment under “fishbowl” scrutiny.
Myth: Foreign oil is cheap.
Fact: We are vulnerable and controlled by foreign oil pricing. Foreign oil deprives America of jobs, tax revenue and security. In effect, two of every three gallons of gasoline are imported, with much of it coming from countries that hate America and use money to fund terrorism. Also, it costs the U.S. military $33 billion a year to protect oil exported from the Middle East during peacetime.
Demand is strong, fueled by fast growth in China, India and other developing countries. But supplies are still constrained. Output in Saudi Arabia has maxed out. … risk of disruption is high, in Nigeria, Venezuela, Russia and the Mideast. –The Kiplinger Letter
“Still, until a cushion of energy production capacity can be restored to the market, prices are more prone to rise on bullish news than fall on bad news,”
Factors that converged to support the oil price escalation last year included:
- • An acceleration of oil demand in China, India, and the US.
- • The end of the long-consumption decline-a fall-off of nearly four million b/d during the last decade- in former Soviet Union countries.
- • Political instability in key oil exporting countries, including Venezuela, Nigeria, Indonesia, and Iraq.
- • The failure of oil consuming nations, especially the US, to develop a rational energy demand policy. The US accounts for just five percent of global population but 25 percent of world oil consumption.
- • Lengthening oil supply chains stemming from the US’s growing reliance on distant oil supplies from Russia, the Middle East, and central Asia. –Bernard J. Picchi, Senior Managing Director, Foresight Research Solutions
TAX BILL GIVES INCENTIVE TO MARGINAL WELLS
The US Senate and House of Representative have passed a tax incentive bill to help small oil and gas producers. This bill provides a tax credit of up to $9 per well per day for marginal wells. A typical marginal well pumps 15 barrels of crude or 90 thousand cubic feet of gas per day. There are 650,000 “marginal” or “stripper” oil and gas wells in the USA. Marginal wells provide as much as 25 percent of the nations’ crude supply (on par with Saudi Arabia ) and about 10 percent of gas stocks. In 2002 alone, 17000 oil and gas wells were permanently plugged with cement (13,600 oil wells and 3,900 gas wells). This tax bill will act as a safety net to save many of these wells, thereby reducing our reliance on the Middle East. The tax credit phases-in if the average crude price for a year is less than $18 a barrel or $2 per thousand cubic feet of gas. The maximum tax credit is $3 a barrel for the first three barrels of crude produced if prices plunge below $15 a barrel, and 50 cents per thousand cubic feet if gas prices average less than $1.67 per thousand cubic feet. –Houston Chronicle,
“Today’s tight natural gas markets have been a long time in coming, and future prices suggest that we are not apt to return to earlier periods of relative abundance and low prices anytime soon.” - –Chairman Alan Greenspan
“Natural gas is a commodity and like all commodities, if it’s in demand, the price goes up. The demand for natural gas is on the rise.” –Martin R. Twist
“Over the last decade, demand for natural gas increased 19 percent to levels that are difficult to sustain under current supply and production constraints. This demand growth has occurred despite improvements in energy efficiencies during the past several years.” –Energy Secretary, Spencer Abraham
“While the sharpest jump in demand will come from China and other Asian countries, demand in the United States also will continue to increase.” –Houston Chronicle,
U.S. Secretary of Energy Spencer Abraham warned that the country is critically low on natural gas.
Gallop polls, which consistently show that “lack of energy” or “energy crisis” is at the bottom of their list of important problems facing the nation. –Discover Magazine
“Natural gas is the only viable fuel that can link the carbon-based global energy supply used today to a renewable-based energy supply that will have to be used in the future. It is the only relatively clean alternative to oil and coal — there is little doubt that natural gas will be the fuel of the future.” –Ocean Oil Weekly Report,
Gas will always retain its environmental advantages. –IPAA,
The U.S. is at risk, not only because a huge percentage of the world’s proven oil reserves are in the volatile Persian Gulf region but because pipelines and international sea lanes must be protected. Additionally, the growing need for imports contributes to the economic vulnerability of the U.S. by increasing the foreign trade debt. Once oil and gas production peaks and starts declining, it is hard (if not impossible) to reverse. Experts believe that if oil companies began an immediate drilling frenzy, that would just slow down the rate of decline. –IPAA
In recent years the oil and gas industry has experienced a massive technological revolution; innovations have vastly increased the amounts of oil retrieved from already opened fields. –Audubon,
About 10% of all oil reserves ever found in the U.S. have been found in the past decade, and of those, about 90% are in old fields, according to the U.S. Dept. of Energy. Were going back into old fields and finding that they were more complicated than was previously thought. Now, the saying is “oil is where you already found it.” –William L Fisher, an internationally respected geologist at the University of Texas at Austin.