Oil Well Law

[mrbill69]

I remember reading about some law that required that if an oil well was drilled before a certain year, the gasoline generated from it had a maximum price associated with it. The oil companies didn't want to pump oil from these wells because they could not sell at the current high price. Does anyone know the name of the law that references this situation? I believe it was during the 70's or the 80's. Was this law ever repealed?

[RWR8189]

Reagan dumped most price controls in the 80s.

It would be a shame if laws like this were still stifling domestic oil production.

[SERUM10]

There were price controls on both oil and natural gas in the 1970s up until the National Energy Act of 1978 that included four subsidiary laws that dealt with, among other things, relaxing natural gas pricing and increasing oil pricing flexibility (including for gasoline) if so chosen by the President. In 1981 Reagan freed oil prices on the same day that the Tehran hostages returned to US soil. It was a courageous act much maligned by the socialists but it generated a tremendous boom in oil production followed later by natural gas deregulation.

[mhx]

I can't believe how that law would work, exactly. So, you would take the oil out of the well, and send it to the refinery, and mix it in with all the oil you took from all the other wells, and refine it into gasoline, and then ... what?

[A CA Guy]

I do remember our wells got capped because it was cheaper to import oil, but at $3.50 a gallon, I don't get why the wells aren't being gone after to get a little independence from world event oriented markets.

[Paladin2]

There's apparently some issue in eastern MT and western ND where old wells are being reopened, but due to pipeline constraints (capacity + long term committments to Canadian oil producers?), this oil can't be added to the flow and the offered price to producers is ~$35/bbl. They are annoyed and not producing as much as they would otherwise.

[philman_36]

Perhaps some of the links at this site will help to refresh your memory.
PETROLEUM CHRONOLOGY OF EVENTS 1970 - 2000
Contents (all hyperlinks)
Clean Air Act Amendments of 1970
Arab Oil Embargo of 1973
Emergency Petroleum Allocation Act of 1973
Energy Policy and Conservation Act of 1975
Department of Energy Organization Act of 1977
Airline Deregulation Act of 1978
Powerplant and Industrial Fuel Use Act of 1978
Iranian Revolution of 1978-1979
Petroleum Price and Allocation Decontrol in 1981
Crude Oil Price Collapse of 1986
Reid Vapor Pressure Regulations of 1989 and 1992
Clean Air Act Amendments of 1990
Persian Gulf Crisis of 1990-1991
Oil Pollution Liability and Compensation Act of 1990
Dissolution of the Soviet Union in 1991
The Energy Policy Act of 1992
Phased Reduction in Vehicle Emissions 1992 - 2000
Consolidation, Concentration and Restructuring 1995 - 2000

[wideminded]

The distincion between "old oil" and "new oil" began with the Emergency Petroleum Allocation Act (EPAA) in 1973 This was amended by the Energy Policy and Conservation Act (EPCA) of 1975. Apparently Carter began to remove a lot of the price controls created under these acts, but the distinction between new and old oil continued until 1980.

The difference in price was for crude oil, not gasoline. "Old oil" was oil from wells that had already been drilled previously and was subject to price controls. New oil was from recently discovered sources and sold for a higher market price.

For those with crude oil to sell it was more profitable to have "new oil". Apparently scam artists such as Marc Rich found found various ways to convert "old oil" into "new oil". But major corporations were doing the same thing.

On the other hand, refiners could make more money if they could obtain "old oil" at a lower price to convert to gasoline.

I found all this out by googling. I'm not sure I found the best links so you can finish the job.

[TXnMA]

What law? The oil company is still pumping my old (1940's) "stripper" well for all she's worth...