Oil’s Perspective on What’s Behind the Energy Crisis

New York Times ^ | June 21, 2008 | JAD MOUAWAD

[Donald Rumsfeld Fan]

David J. O’Reilly, the chairman and chief executive of Chevron, spoke about why Congress should allow more access to offshore drilling ....

Q. Democrats say oil companies are sitting on unused leases and they should drill there first before more regions are opened up to production.

A. What I would encourage the Democrats to do is to look at the facts. We should not be making these crass statements without facts. There are already existing limitations on leases. Already you have to use them or loose them. It takes time for geological exploration to occur. In our case, over 80 percent of our leases are being actively worked. We turned back many of them last year, even before they expired, because many don’t have anything on them.

A. This is a case of demand-driven increases. The time we could count on cheap oil and cheap gas is ending. In prior periods, you’ve had price spikes because of big disruptions in supplies. But in this decade, the new phenomenon is that demand has been the main driver.

A. I am a believer that most of this is related to fundamentals. Those are concerns about supplies. Last year, oil supplies did not grow in total. What the market is looking for is more visibility in future oil supplies. That is one of the main drivers for the difference between the prices five years ago and the prices we’re seeing now.

Q. What has been the impact of financial investors or “speculators” in the market?

A. I am not quite sure that I know that. It is quite possible that they have added some volatility. But the bulk of the price of oil that we see today relates to concerns about the outlook for physical supplies in the long term.

[rodguy911]

I wish this guy would mount a huge adv. campaign showing the rats for just who they are—commie wannbe protagonists.

[upsdriver]

I agree that the Saudis would like to keep the price where it’s at but if by lowering the price, they could discourage the American people from following through on opening new areas of drilling, I think they would.

Pro-drilling polls are rising because of the 4 dollar gas. That’s one of the nice aspects of the high oil prices. It is painful, but manageable if it increases our production.

[rodguy911]

BOR is wrong a lot of the time.

Anyone dumb enough to do a radio show that airs the same time as Rush can't be too smart to begin with.

[FlyVet]

In our case, over 80 percent of our leases are being actively worked. We turned back many of them last year, even before they expired, because many don’t have anything on them.

Our brilliant Congressmen: "We just gave you a million acres of Sahara for your water reservoir. What are you complaining about?"

[rodguy911]

Great post!

The enviro wackos are used by the DNC to to do the dirty work and they are really good at it being Marxist/Socialists anyway.

They hire hundreds of big time lawyers hungry to suck up their unlimited funds and promote govt. takeovers of everything, everywhere.

They just haven't been found out yet.

[upsdriver]

It would be nice if someone were to start up a pro-oil 527 to do that very thing. I’m sure the oil people would be willing to kick in to help fund a truth campaign.

I still remember the Harry and Louise ads that “Big Medicine/Insurance” used to sink HillaryCare. It was truthful and very effective. Pocketbook issues resonate strongest with voters. It gets them right where they live.

[rodguy911]

True, but why can't the oil companies adv. the truth? It's on their side if they just get the word out. Surely they can build a campaign around the truth.

[AndyJackson]

I don’t think O'Reilly spent more than a few months at Harvard.

If he had spent a few years there you would think more highly of him because why? How about we evaluate a man for what he says and does and not for what seat he has sat on.

[upsdriver]

Oh, I agree, they should.

The only ads I see energy companies running are ones trying to show how “green” they are. I am so sick and tired of that word. I think European socialism every time I hear it.

[rodguy911]

Yeah for sure,!!

Maybe they will get it. We need them to take the lead in the battle to save Capitalism and make the country energy secure.

[TigersEye]

I can't and won't argue that all of those forces are at play in shaping public opinion and in turn shape Congressional actions. But Congress is the body charged with making law. Congress is supposed to owe its allegiance to the country by representing the will and well being of the people. Congress has the duty and authority to be informed with the most detailed and accurate information available in order to fulfill their Constitutional obligations to the people. They also carry with them, as a natural consequence of their position in our society, the power to influence public opinion through those other institutions and groups.

Let's take the MSM for example since they hold the greatest sway on public opinion. Congress may be prohibited from forcing the media to its will, and rightfully so, but as individuals and in aggregate they can profoundly influence what is published and aired by simply stating what they want to be heard whether the media chooses to slant it or not. The media can only ignore what politicians say to the degree that politicians allow themselves to be silenced or opposing factions facilitate a particular bias.

The President is not the only pol with a bully pulpit. Congressmen can also stir and direct debate by forcefully voicing their views. The MSM will cover controversy whether they agree with a POV or not. That is their bread and butter. A politician just has to have the spine to make waves and the will and intelligence to stand firm and push forward their views. Thankfully their are a few who are doing that now on this issue. Inhofe, Boehner and Gingrich come to mind immediately. The more pols who stand with them the louder the debate will get and the more the MSM will cover it even if they try to undermine their position.

For those reasons I won't give Congress a pass. Knowing what's going on and doing the right thing, in law, is what Congress is charged with. It is their obligation to fight media bias. It is their obligation to cut through public ignorance and apathy. It is their obligation to put the people's interests above the interests of special interest groups. It is their obligation to learn which interests best serve the people, inform the people why they think so and then listen to what the people think about that. They are the ones who make the decisions.

[Waco]

If disney world, pro sports, college and high school sports see a 75% drop in their gates by election time? People vote with your cars! Where my car don’t go, I don’t go!!!

[rodguy911]

So far Congress has been part of the problem not the solution. Let's hope we light a fire under their butts so hot they move the right way on energy.

[TigersEye]

100% agreed. I think Congress is the main obstruction to energy independence. Obama says "we have to end our dependence on foreign oil." Politicians have been mouthing those exact words since before Carter. Since before Ford. Their actions have made things worse, not better, and I don't think they can use the excuse that they didn't know the consequences of their actions.

They penalize the oil industry and then accuse it of failing. They support Enviro interests knowing that it hampers the energy industries and then ask them why prices are high. They subpoena oil industry execs and accuse them of lying but they accept Enviro Lobby dollars and never question their "facts." They tax and regulate the energy industry until they move to other countries and then blame them for our national dependence on foreign supplies. They put a moratorium on finding domestic supplies and when world demand begins to exceed supply they blame "speculators" for playing the market as the market presents itself.

It's everyone's fault but Congress' fault yet they make all the rules.

[ozzymandus]

I saw that. O says a lot of things that are evidence of a real lack of basic knowledge. You’d think he’s have a staff to keep him from looking so stupid, but I suppose his arrogance overrides any other consideration.

[Ditter]

I have watched several wells being drilled. It takes a few months to get the work done, say 9 months, and maybe a couple more to tie it into a pipe line. After that the oil is flowing. How long it takes for it to be made into gasoline I don’t know.

[rodguy911]

Only solution is to light a big fire under their butts so hot that they have to respond. It's already happening. Just a mater of how high gas has to go before they yield to common sense.