----- Original Message ----
From: Mike Frey mike21b@...
>>Another good (this time short) essay from Eric.I don't always agree
with him, but he's a good writer.
Right on!
>>Oil companies are making huge profits, but they are public companies, so
it's the shareholders who benefit the most - and a large percentage are
ordinary citizens whose 401k, retirement plans, and stocks benefit.
True, and I am one of the 401-K guys, but what chaps my hide is this: As an operator working for a major oil company, the top people in the corporation make more than 100 time what I do each year. I've been told that, in most of the world the ratio between the top guys and the production worker is more like 8 or 12 to one. OK, I could be making it too if I had made the same decisions for my life that he made for his. Yet, I cannot think of anything that a person could do, even if they worked 18 hours a day, seven days a week, that would justify a salary and benefits package of many tens of millions of dollars each year plus a golden parachute of many more tens of millions of dollars at the end which, sometimes, is only six or eight years. You talk about obscene profits! Oh well, they make the decisions and their decisions are going to benefit them, not the guy out there turning valves in the snow at 3:30 AM on Christmas morning. As
I said, maybe I should have made different decisions for my life. Yet, I'm not sure I could sleep worth a darn if I had.
>>A few years back, when the price was $50 a barrel, there was
reluctance on the part of companies, investors and countries to drill for
oil. "Costs too much, can't profit at $50 a barrel". OK, now at $125
(give or take a few dollars), why are there not holes being drilled all
over?
My company is drilling new wells in Texas, New Mexico and Colorado 24/7 even as we speak. (Type?) When I moved here five years ago, the company barely acknowleded the CO2 plant where I work and when they did, they treated us like a red headed step child. Now we are going through an expansion to double our capacity to process CO2 and send it back out for ground injection to enhance production. Oil recovery in our little square mile (or so) has gone up by just about a third and is ramping up fast. All of this is a direct reaction to the increase in crude prices.
>>Perhaps because it's going to come back down? When?
...Soon, I hope.
Yah, me too, but I wouldn't count on it. Unlike you, I put more blame on OPEC, meaning the Saudies (once our frinds, too!) than any other single factor. Whatever the cause, you can bet that the big oil companies, despite their protestations, do not want the price to drop. They make too much money on the higher prices for the oil that they produce both here and in other countries. The refining side suffers in some cases because of the low margin, but over all, there is more money in higher prices. Did you know that, by federal law, a corporation must focus on, and work to improve, the profit margine each quarter? The long range view is actually mitigated against by that law. Since the US government is... shall I say "highly responsive"... to the view point of big business, I wouldn't put much faith in them to do anything beneficial to your check book or mine, cynical bastard that I am.
Drilling off shore or in that preserve in Alaska? Well, before I transferred here I worked at an oil company dock in California where we imported Alaska North Slope crude (ANS) for us to refine. About six or seven years ago, the Mate on one of our company ships told me that we had begun to export ANS to other countries. He said that, when we first built that oil field, congress had passsed a law against exporting but "a couple of years ago" they had changed the law and we now exported ANS on the open spot market. I never checked to verify that, and I'm not vouching for it, but he had no reason to lie to me, though he could have been mistaken. If anyone knows otherwise, please feel free to correct the matter.
C-y'all;
Lash
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