Terrel L. Shields
Elite Member
- Joined
- May 2, 2002
- Professional Status
- Certified General Appraiser
- State
- Arkansas
BP screwed more than the GOM up. They have basically damaged every single oil company in America and none of them are going to be able to ask BP for money.
The coming rules for deep off shore drilling will apply to lots of on shore projects. This will likely inhibit wells not through higher safety standards but the healthcare-bill-sized regulations that accompany such standards. It is predicted that more than ½ the deep rigs will move overseas, reducing the potential oil reserves by one-half as well. For small companies, it could be an impossible task. They simply don't have the staff to fill out 2000 page applications. The consequences of failing to complete one such page came home to New Jersey when they applied for education funds and failed because some midlevel bureaucrat included the state projected results from 2009-10 instead of 2008-2009...2 pages cost NJ millions.
Worse, BP is a large company that derives its cash from Joint Ventures and stockholders via internal cash flow. Few of the small companies "cash flow" internally. They raise money and sell prospects to investors to spread risk. A single dry hole could bring a company down. But parceling out the risk among investors via taking 10% of 10 wells means almost certainly some wells will make gas or oil. Devon, for one, has estimated they will have to slash drilling by 1/3rd if they lose the IDC (Intangible Drilling Costs) tax break, which again, only applies to companies who have investors (either individuals, hedge funds, and drilling funds) and small Mom & Pop operations are likely to lose over 50% of their funding.
This is a bad outcome as it makes us not only more dependent upon OPEC and Russia, but also the number two revenue source for the federal government is royalties from oil and gas production. Indian tribes, federal and state, and in Texas, their entire educational system is dependent upon oil revenue.
Our hatred of oil companies is misplaced. The worst part is that even congress thinks that as the industry shrinks, equally cheap source of energy is available simply by erecting a new wind mill or installing a solar panel. As one energy state congressmen said at an energy expo in Houston last week, "They think it is available next month.."
We risk a huge downturn in drilling, hurting oil states economy, the national treasury and worst of all every single one of us will pay more in the future for gasoline and house energy.
Ask youself. Why is Apple the darling of everyone in America when their servers suck so much energy and they have $25 billion in cash but when an oil company has $25 billion in cash, they are blood sucking scumbags. Ask yourself. Who made you stand in line last year? An oil company so you could pump gasoline? or, Apple so you could pay $300 for an Ipad?
The coming rules for deep off shore drilling will apply to lots of on shore projects. This will likely inhibit wells not through higher safety standards but the healthcare-bill-sized regulations that accompany such standards. It is predicted that more than ½ the deep rigs will move overseas, reducing the potential oil reserves by one-half as well. For small companies, it could be an impossible task. They simply don't have the staff to fill out 2000 page applications. The consequences of failing to complete one such page came home to New Jersey when they applied for education funds and failed because some midlevel bureaucrat included the state projected results from 2009-10 instead of 2008-2009...2 pages cost NJ millions.
Worse, BP is a large company that derives its cash from Joint Ventures and stockholders via internal cash flow. Few of the small companies "cash flow" internally. They raise money and sell prospects to investors to spread risk. A single dry hole could bring a company down. But parceling out the risk among investors via taking 10% of 10 wells means almost certainly some wells will make gas or oil. Devon, for one, has estimated they will have to slash drilling by 1/3rd if they lose the IDC (Intangible Drilling Costs) tax break, which again, only applies to companies who have investors (either individuals, hedge funds, and drilling funds) and small Mom & Pop operations are likely to lose over 50% of their funding.
This is a bad outcome as it makes us not only more dependent upon OPEC and Russia, but also the number two revenue source for the federal government is royalties from oil and gas production. Indian tribes, federal and state, and in Texas, their entire educational system is dependent upon oil revenue.
Our hatred of oil companies is misplaced. The worst part is that even congress thinks that as the industry shrinks, equally cheap source of energy is available simply by erecting a new wind mill or installing a solar panel. As one energy state congressmen said at an energy expo in Houston last week, "They think it is available next month.."
We risk a huge downturn in drilling, hurting oil states economy, the national treasury and worst of all every single one of us will pay more in the future for gasoline and house energy.
Ask youself. Why is Apple the darling of everyone in America when their servers suck so much energy and they have $25 billion in cash but when an oil company has $25 billion in cash, they are blood sucking scumbags. Ask yourself. Who made you stand in line last year? An oil company so you could pump gasoline? or, Apple so you could pay $300 for an Ipad?
