Taking it to the Man.

At $30.00+/barrel most Americans have not had to worry about filling up at the pump lately, compared to one year ago when some parts of the country were paying $4.50/gallon. I guess the public is really taking it to the man these days. But I've got to tell you...I am the man. In all senses of the phrase. Now, I dabbled in pacifism and hippie-ism for about 9 college months but in growing a bit older and wiser I can safely say that we need the man. As Pacino said, "You need people like me!"

The threat of $30.00 oil is upon us. At $30.00/barrel, energy companies can not finance land leases, rig leases, pipe costs and production costs. Truly, oil needs to level out at about $80.00/barrel before we start seeing a significant economic stimulus. On average, global petroleum production is down 25% this year. Russia needs to garner $70.00/barrel to remain solvent and OPEC needs $55.00/barrel. In turn new exploration projects have been postponed for 2 plus years and the Athabaskan tar sands (speculated to place Canada, our best friend, as the largest oil producing country in the world by 2010) has been put on hold until further notice. Due to these recent economic difficulties oilfield workers are being laid-off or let go daily. Not to mention the truckers, welders, and specialty service hands that remain unemployed. Mexico (our number 3 source of imports) is on the road to civil war as the 20% decline in oil production and exportation has left it's burgeoning drug trafficking business as it's number one grossing industry. War and blow flood the streets...Tony Montana would be proud.

I am thankful to be working, whether I am the hated man or not. The supply has met the demand recently, leaving the best of the best out here in the field. Meanwhile, many men sit at home without income. There are workers out here that have not asked for a day off in 6 months fearing they will be perceived as complacent or unappreciative and then they will be replaced. It's a tough world we live in and sometimes I feel ashamed to tell old college friends that I drill for oil and gas, but we live in America. This is capitalism and smoking dope doesn't pay the mortgage-- pipe dope does. It is fantastic to have ideal goals and to work for a greener tomorrow but we must be thankful for the resources we have today. But get ready folks, I foresee an increase in gas prices. Somewhere in the $2.50 to $3.00 range. Try not to loathe it...look at it as economic stimulus. We don't have battery powered vehicles yet. And remember Scarface is the bad guy but I'll be your Huckleberry.

Cheers,
rf

It's a dirty Job, but...

After a few conversations and one pointed blog comment, it has come to my attention that the public wants to read about the darker side of the petroleum world. The kind that Gore Vidal muses about while smoking far too many cigarettes at an Amsterdam wormwood cafe. Since I value my readers' opinions, one of whom may be a writer for a timely and well proliferated New York newspaper, I have decided to share some of the oilfield secrets. Gotta feed the monkey, right? We all know what happens if you don't...my have your face ripped off.

Alright, so... There is plenty of oil to go around for many thousands of years...trust me. And OPEC is a conspiracy. Well...maybe not a conspiracy but they are a cartel and do conspire against petroleum importing nations by fixing prices since they control 40% of the world's most precious commodity. In fact, many economists suspect that OPEC is responsible for the United States decline in the international economy. Since 2005, OPEC has slowly been divesting from the US markets thereby weakening the dollar and transferring interest to the Euro.

Also it is a well known fact that OPEC was started in Baghdad in the late 50's and early 1960's after Venezuela approached Iran and other middle eastern countries. Current members include Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, UAE and Venezuela. No surprise...we don't carry great relationships with many of these countries. Saudi Arabia (worldwide leader in petroleum reserves and production) produces about 11 million barrels of oil per day and the US produces close to 9 million. Unfortunately the United States consumes 21 million barrels of oil per day. Obviously we then have to import oil...making us an importing nation and not an exporting nation thereby excluding us from the ever so powerful Organization of Petroleum Exporting Countries. Gotta feed the monkey...right.

US and OPEC relations have been soured over the years for a number of reasons and a number of oil field workers that I've spoken with believe that last year's price gouging was a direct result of OPEC's desire to see what the markets could sustain. Years ago, former dictator, Saddam Hussein was recorded several times demanding OPEC increase oil prices solely for the profit of OPEC member states. Now that we occupy Iraq...well, we have a slightly better opportunity to contain anti-US lobbies within the international oil market.

Truly, I can't speak in any authority with respect to the international oilfield. Give me a few years. Domestically, I understand that the US citizens employed by energy-interested companies are doing their best to make a profitable and honorable living for themselves and their families. Many of these men and women are 3rd generation oilfield hands. Like the car industry in Detroit, and the coal mines in the Appalachians, the oilfield in the south is a traditional market-- made up of hard working American families purely reaching for security and the American Dream. The oilfield is one place that hires employees based on their performance, grit and stamina; many ex-convicts and high school dropouts find their way into the oilfield and excel making an excellent living while contributing greatly to the US economy. I promise you these workers take pride in what they do.

We are responsible for many of the economic woes in the world but price gouging at the pump is not one of them. We are on the demand end of the market. Our enemies control the supply. The trouble is as we move towards sustainable energies, our enemies will continue to drive up the prices of current energy supplies. Look again at the OPEC nations and see what other exports they produce. Not many. We just better perfect those green solutions because as the Saudi Sheik once said, "The stone age didn't end because we ran out of stones." That is to say change comes with united movements and usually in slow doses. But be not confused, we aren't paying at the pump because we want to...we have to. And when the supply chain is cut off, then we may need to make new friends or find ways to produce more oil.

Keep the peace.
Truly,
rf