When thigs are going well for
most of us there is always a group that is suffering and these days it is
anyone in the oil business that is suffering. Most of America is thrilled that gas prices
are under $2 dollars a gallon and in some areas, $1.50 per gallon. Last year
falling gas prices put an extra $150 Billion dollars in American’s pockets. The price of oil has dipped below $30 per
barrel. It should be all ok and one big boost to the economy but in Midland,
Texas they call it the crash. It is a deep economic disaster for them.Oil fields are
closing up and oil rigs and drilling equipment stand idle filling up used car
lots. America’s oil and gas industry is
going through a deep economic depression with a
few hundred million dollars’ worth of
drilling rigs going idle in West Texas.
It is the flip side of low oil
prices and I don’t care. I want to enjoy this side for a change. The United
States oil industry is down 60 per cent in production. Auction lots are filled
with trucks and heavy equipment being sold for quick cash. People have lost
their jobs since a gallon of water cost more than a gallon of gas.
World -wide the industry has cut more than 275,000 jobs. In mid-2014 the price of a barrel peaked at $112.00 per
barrel. The price fell because OPEC has not cut production. The author Daniel
Yergin describes such a change much better in his book called The Prize. The
epic quest for Oil, Money and Power.
Saudi Arabia’s plan is to
maintain a market share in the global oil production market. Russia too is pumping
gas and oil at full blast. The United States is still fracking which is pumping
water into shale formations to free hard to get at oil and gas. Well, fracking
meant that suddenly the United States was producing a lot more oil, so much
that for the first time in 40 years we are finally exporting the stuff. In 2008
the United States went from producing 500 million barrels per day to now being
able to produce 900 barrels per day. In just a matter of a few years, United
States production has doubled. In the past few years places in Texas were full
of oil equipment and so many workers that they lived on cots in trailers.
Then the price crashed due to
China’s slowing economy. The Saudi’s and Russians kept pumping because they don’t
pay their workers much to work. If Iran starts pumping again even the Saudi’s
and Russians will fail. The world is producing more than a million and a half
barrels of oil than it needs. The oil is being stored in huge tanks around the
world and are sitting in tankers parked at sea. When is the United Nations going to get
involved in this issue to stabilize production and prices world-wide? Even if
the price does go up it will take time to use the surplus dangerously hanging
around in our waters and lands.
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