mixter

The Triple Play: Oil Addicts, The Credit Crunch and Deflation

As a fourth generation "oily", and a graduating geologist in 1958, no one was concerned that the world was awash in oil, and only two graduates out of my class of 136 were offered jobs. Subsequently, in the early '80's, the oil bust resulted in over 600,000 people losing their jobs, and hundreds of oil related companies going out of business.

The owners and top executives of the surviving companies had to make many hard decisions in order to survive. None of our politicians, or the general public were the least bit concerned, as long as the could obtain cheap energy and petroleum derived products.

Now that times have changed, "Big Oil" should be punished according to the warped logic of the pandering politicians and ill informed public.

This is tantamount to killing the goose that has laid many golden eggs that have enabled the civilized Western world to build great countries, and raise the standard of living for most of the people of the world.

If finding, producing, transporting oil and gas, refining, getting the end product to market is so easy and lucrative, why doesn't every one get in the oil business. All it takes, in most instances, is millions of dollars to speculate on leasing, drilling, and completing wells (assuming you are fortunate enough to find hydrocarbons in commercial quantities, instead of being liable for plugging a dry hole).

Better yet, why doesn't every one invest in oil company stocks?

After all, the oil companies only have to evaluate geological prospects, negotiate leases with mineral owners (whether they be individuals or foreign governments that can change the "rules" overnight), figure out how they can prepare the drilling site (whether it is located in deep oceans, swamps, mountain sides, deserts, or populated areas), comply with numerous rules and regulations, make arrangements to drill, evaluate the geological formations encountered during drilling operations, complete the well, install production facilities to separate oil, water, and gas (make arrangements to safely dispose of the produced salt water), and transport the hydrocarbon to market. Then comes the hundreds of millions of dollars worth of investment to design and build refineries that are efficient and comply with numerous EPA, and OSHA regulations (even if permission is granted).

Oh yes, "big oil" has it made. All it has to do is pick the low hanging fruit that abounds all around!

Better yet, let's just kick their asses, it will make us feel better even if only reduces supply and raises prices!