EVERY other word Joe Biden uttered in the vice presidential debate seemed to be "ExxonMobil.” Biden’s obvious attempt to demonize oil companies is designed to pander to voters who think energy producers are evil incarnate.
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It may work, but let’s remember that oil and natural gas prices don’t always go up and the companies that bring petroleum to market don’t always make "record” profits — and sometimes don’t make any profit.
Gasoline prices are headed below $3 a gallon. Oil prices have fallen below $100 a barrel and natural gas prices have dropped below $7.50 per million British thermal units. This price deflation is resounding in the board rooms of Oklahoma oil and gas producers; the echoes will be heard at the state Capitol.
Gas producers such as Chesapeake and SandRidge have slashed capital expenditure budgets because current prices can’t sustain earlier plans for exploration. OG&E said it won’t implement the second part of a planned rate increase to recover the cost of the natural gas it buys to fire its power plants.
Consumers will benefit from lower prices at the gasoline pump and lower costs to heat and cool their homes, but state government will suffer from declines in collections from the gross production tax.
SandRidge is cutting its projected capital outlay by half, from $2 billion to $1 billion. Chesapeake has announced a cut of $3.2 billion through 2010, a 17 percent curtailment.
Energy companies are responding to lower prices by slowing their activities. This is similar to homeowners waiting to put their homes on the market until prices are higher.
Rational decisions are being made by the companies, but the typical response from Biden and company is anything but rational. If energy prices keep falling, they’ll lose a target for their demonization but also the pressure to open new areas for drilling.
What’s startling about the price drop is the speed at which it’s occurring — faster than Biden can drop ExxonMobil bombs in his tiresome stump speeches, while saying nothing about assuring a reliable domestic oil and gas supply.
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So my question, still unanswered for 2 weeks, is where is this $700 billion going to materialize from? If it is "funny money" from the Federal Reserve, that will only increase taxes and cause more inflation. Look for $5 gas when the dust settles.
Low gas prices our great for our overall economy and standard of living. Now that we have been ripped off by poor planning and dependence on foreign oil, inflation has soared. Even with lower oil and gas prices, the prices of goods will not come back down to where they use to be. The oil companies as well as any other should learn to save money in good times so they can handle the bad times. If oil companies do not invest in new technology, they will not be successful in the future. The government needs to stay out of the way, and let the economy ride the ups and downs letting the resoponsible companies thrive and the ones expecting someone to help them at every wrong turn fail for the overall good of our economy. The workers rushing off to new jobs in the oil fiels - Save your money - pay your house off - go to college - the market will not always be this good - just ask the home builders and realators right now.
The Dems like these smoke screen tactics. It's getting pretty old though as it dates back almost 100 years. It's like the French with the Marie Antoinette thing: a public spectacle of bloodletting. Too bad we don't do the same for our honorable investment brokers and mortgage underwriters.
Here's hoping that Oklahoma does not tank like it did in the mid 80s. I recall significant loss of jobs, huge housing surplus, signficant number of bankruptcies, and local media rejoicing about low gasoline prices.
The recovery took over a decade to appear. When it did, it was primarily the driven by the oil and gas industry; not government guidance.
Great place to be if you are employed by the government.
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Leave a comment. Log in below or sign up (it's free).Editor's note: It is not our intent to offer comments on crime or fatality stories.
Here's hoping that Oklahoma does not tank like it did in the mid 80s. I recall significant loss of jobs, huge housing surplus, signficant number of bankruptcies, and local media rejoicing about low gasoline prices.
The recovery took over a decade to appear. When it did, it was primarily the driven by the oil and gas industry; not government guidance.
Great place to be if you are employed by the government.