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Writer's pictureLucian@going2paris.net

Why Aren’t We Screaming At The Oil Companies?


Charlottesville

March 10, 2022


Last I checked Exxon and its competitors produce, refine and deliver the gas we use in our cars. Why are folks screaming at Biden when it’s the Exxons on the world that can increase supply (while they are profiteering from the high commodity price for oil)?


Just my idle mind wondering.



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4 Comments


tommasopacelli
Mar 10, 2022

Thanks to your b-school and professional background, you bring some of the financial factors which affect this complicated issue to bear.

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dsmithuva75
Mar 10, 2022

Tom is right -- We are pulling out of the ground today HALF of what we were pulling out a year ago! So many leases have been pulled, wells capped, federal lands put off-limits . . . it is a sin! And, once out of the ground, how are you going to get it to refineries if the major new pipelines have been stopped? New England is getting the bulk of its oil from Russia, and that is about to end. Yet, the shale fields on North Central PA have been trying to get their product to the refineries in NJ . . . but NY won't let them build a pipeline through NY State....

This is a crisis totally…

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tommasopacelli
Mar 10, 2022

as with most things regulated by the government, when the non-technical spokespeople try to make it sound simple, beware. with respect to the recent talking point about federal leases "approved", the fact that there are approved leases doesn't mean there is oil under that land or that they can start taking oil. here is a simple link which scratches the surface of what is entailed to actually get the oil from a leased parcel to a refinery. https://www.theoilandgasreport.com/2017/11/02/how-do-i-access-the-lands-under-a-federal-oil-and-gas-lease


with respect to pumping more oil from existing wells, it is my understanding (subject to more informed fact checking) that a permit issued for a given well identifies the amount which can be taken in accordance with the federally approved drill plan.…


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Lucian@going2paris.net
Lucian@going2paris.net
Mar 10, 2022
Replying to

Thanks, Tom. Very helpful. I also suspect there are limitations like rig and personnel availability. Regarding prices, I gotta believe the big players make use of hedges to lock in prices to make decisions on drilling a bit easier (in terms of knowing if they produce X barrels they will get paid Y dollars per barrel). I’m also wondering how long it takes a gallon of oil at the wellhead to turn into gas I’m putting in my truck. So many questions! I’m impressed you read the “Oil and Gas Report.” Hi to Ada!

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