( – promoted by Colorado Pols)
Remember the ‘Drill Here, Drill Now, Pay Less’ shtick? We were told then–from the likes of Newt Gingrich, with a straight face–that Big Oil wanted nothing more than to drive down consumer prices so we could all have more affordable energy.
These companies wanted nothing more than to keep drilling and drilling and drilling, so we could all ‘Pay Less.’
Oh how things change when energy prices actually come down.
Today the Sentinel is reporting:
Williams, however, is keeping its Piceance Basin holdings in anticipation of an economic resurgence…
Keeping its stake in western Colorado and “living within our means” will position Williams for growth when the time comes, he said.
“Energy prices will rise again,” most immediately as a function of the massive lay-down of drill rigs across the region, Hill said. [Emphasis Twitty’s].
…Prices will climb as the excess supply is used up, with little new drilling under way. The trend toward lower prices could reverse itself by the fourth quarter this year, said Hill, who has headed Williams’ exploration and production efforts for a decade.
I’m so confused. It’s like oil and gas companies want high energy prices or something. And that these companies are intentionally manipulating consumer fears to lock up more public resources (but not actually drill on them), and to gut new regulations, so that–once they cut supply sufficiently to push prices back up, laid-off workers and subcontractors just being collateral damage–they can get back to business as usual, making record profits off the backs of consumers.
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I’m shocked..at least shocked that the guy is so willing to say this out loud? Not really. During the past eight years Big Oil and Big Business in general have taken it for granted that the American people are a bunch of easily manipulated saps who never learn. They haven’t adjusted to the new reality. The past two elections show we’re actually catching on.
I posted this quote from Mr. Hill in an earlier thread:
“New pipelines could boost the price for Rockies gas by reducing or eliminating “gas-on-gas competition” for pipeline space that drives down prices, he said. Williams has more than 8,000 new locations remaining to be drilled in the Piceance, he said. That will translate into far more wells because each location can accommodate up to 22 wells, thanks to the directional drilling abilities that companies now can bring to bear.”
That equates to 176,000 new wells that Williams already has planned when the prices rise. In his remarks to about 200 Williams employees, there is no report of any mention of the COGCC rules. The corporate guys can’t just throw the truth to the wind like Penry and Co. This morning, Mesa County (read: Craig Meis, Janet Rowland, and Steve Aquafresca) are having an alarmist press conference just before The N.W.Oil and Gas Forum in Rifle. Do you suppose they will mention the 4.191 trillion cf in U.S.storage facilities? Nah, probably not.
I am also curious about the sudden and hushed resignation of John Swartout from COGA. Hmmm.
Duke:
I call bullshit!
I’m no fan of the energy industry, its excesses or the hacks it employes at COGA seemingly for their talent at obfuscation. But it compromises those of us seeking some balance when you take the worst case scenario and present it as normal, i.e. maximum possible holes from maximum possible locations. Anybody with an IQ above today’s outside temperature knows that’s not gonna happen. Haven’t you been a homebuilder? Are contractors pulling fewer building permits over here these days in a calculated effort to drive up housing prices? That’s the equivalent of your criticism of Williams and others shutting down rigs because excess supplies and declining demand have pushed gas prices down.
Get real! Truth is our ally and crap is crap wherever it originates. Unfortunately, this time its from you and Twitty.
thanks for posting
Can’t say it breaks the hearts of Western Slope residents to see the riggers from Texas, AK, WY, etc. leave town. (Although they are dumping all their dogs at local pounds and asking local charities for gas money to get back home.) It gives an opportunity for the local folks to fill in the void and find affordable housing. Tourists might be able to get a motel room.
Drill rig counts are at 2003 numbers — and that was a very good year. Compared to some other states, Colorado oil and gas is still blooming. But we sure could use less fertilizer from oil and gas lobbyists.
(fellow) WestSloper
.
you do know why they are in business, right ?
Something about returning value to shareholders, as I recall.
This is Economics 101. How can you possibly be surprised ?
And no, they didn’t actually declare that their goal was to reduce prices.
They said that was a possible corollary effect, much as auto manufacturers imply that buying a pickup truck could win you attention from the ladies.
You and me, we both know better.
.
Well, snark aside about being confused.
I disagree with your final analogy however, although I do think we know better.
We also know their complaining that they will have to shut down if they don’t get special breaks, lack of regulation and permission to drill anywhere they want, including any wilderness that appeals to them, is bull. Pure bull. 100% bull.
The reason for any reduction in drilling is reduced profit due to the reduced price of oil. The rest is propaganda.
If the cost to operate a well is more than what a company can receive in revenues, from, then they have no choice to shut in the well, unless they are under contractual obligations. That is basic Economics. You do not keep something going that is losing money. The cost to operate wells have dramatically increased as the price of all commodities (i.e., steel) increased all of last year and the price of these required commodities to operate the well have not gone down as fast as the price of oil and natural gas. As these prices drop, less wells will be shut in. It has nothing to do with market manipulation and “screwing the little people”, and everything to do with basic economics.
the “screwing the little people” comes in when they spend millions of dollars to avoid paying their share of taxes.
“Basic economics” should include properly assessing costs of “externalities” and charging them to those who cause them. And, yes, ultimately we consumers will pay the costs in higher prices. That is just as it should be. If we consume the gas, we should pay the true cost, not offload those external costs.
My advice would be to look at some of these company’s income statements and see what they pay in taxes. The industry pays more taxes than most other manufacturing companies. In addition, the industry pays many types of taxes: income taxes, severance taxes, excise taes, and ad valorem taxes.