Posted on 03/07/2009 6:30:49 PM PST by thackney
Most oil drillers are fretting after crude prices fell 70 per cent since last July, but a group of Oklahoma oilmen pin much of the blame for their plunging profits on an unlikely culprit: Canada.
Producers led by driller Harold Hamm have asked local authorities, including Oklahoma's attorney general, to investigate whether Canada--the largest oil supplier to the United States--is selling crude at prices below production costs from its vast oilsands reserves.
The Oklahoma group, Domestic Energy Producers' Alliance, says it may seek to halt new Oklahoma-bound pipelines, or ask the state to temporarily fix prices -- a measure it once took in the 1930s. The group could also pursue Federal import tariffs on Canadian crude.
"We think Canadian oil is sold here at below what it costs to produce. As a result, we are getting less for our oil than it's worth,"Hamm said by phone. "They want to pump in another 1.5 million barrels a day. It would be a disaster."
Several trade experts and oil industry officials said Hamm was unlikely to succeed, but they expected him to fight.
Hamm, CEO of Oklahoma's Continental Resources, who ranked No. 42 on Forbes' richest Americans list last year, led an effort by drillers in 1999 to sue Mexico, Venezuela, Saudi Arabia and Iraq for allegedly dumping cheap oil in the United States. That effort briefly threatened to escalate into an international trade dispute, but ultimately failed.
Canada shipped 2.2 million barrels a day to the United States last year, double its average level in the 1990s. Some U. S. drillers complain the flood of Canada's oil is distorting the value of U. S.-produced oil. Hamm's group says it has received calls of support from drillers in eight other states.
Oklahoma pumps around 200,000 barrels a day (bpd) and receives 300,000...
(Excerpt) Read more at calgaryherald.com ...
If OK doesn’t want it, I do.
“or ask the state to temporarily fix prices “
Amazing how fast some will turn to O’s preferred solutions if they see it to be in their own narrow self interests.
I don’t understand why they would sell the oil at less than the cost of production.
This sounds the same as the lumber issue; most likely it’s the fall of the canadian dollar rather than dumping below cost.
If Hugo nationalized the wells, wouldn't the cost of production be only a couple of bucks a barrel?
Its too damn expensive to drill for oil here. Fix that and the problem would be solved.
If it was viewed as a short-term condition likely to correct itself, it may be better to continue the production rate rather than shutting down the production.
This happened to Alaska in 1986.
http://tonto.eia.doe.gov/dnav/pet/hist/f005071__3m.htm
Opps, wrong way dumping.
The Okies need to suck it up and move on....
What goes around (comes around).
Only if you don’t consider the replacement cost to keep finding new reserves to replace those you pumped.
If you only pump and don’t keep developing new reserves, you really are not in the oil business, you are going out of the oil business.
It doesn’t have to be new finds. It can be increased recovery with new technology or other enhanced oil recovery methods.
A few more idle rigs and the rates will keep coming down.
It’s amazing just how much oil we have in America if we could drill and refine it. just about every state has some oil of varying quality.
Thanks for the discount, Canada.
sure is nice of the Canadians to subsidize our economy that way...:)
If they, the Canadians, have already spent most of the production cost, they don’t get it back if the produced oil sits in tanks. The natural response is to cut back on further production investments.
No, Actually lets just turn off the tap and see what happens. Obama would love to renegotiate NAFTA anyway so lets get it started. In the mean time we'll ship it East and West. Not South. Wouldn't want to hurt anyone's feelings any more than we have already.
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