RE: High Petrol/Gas Prices Coming - Don't Blame Big Oil
@energyaddict22 - A very detailed informative post, obviously you are on top of this subject in a big-picture way. I would like to give some brief comments from another related perspective.
I know the average consumer loves low oil and gas prices, and why not? However, I worked in the oil and gas industry for many years. Not as some cigar smoking executive in Houston, but as a technician / consultant in exploration. The guys that actually put their boots on, go into remote, nasty areas, do the hard work and find the oil and gas. Hands-on, blistering sun or freezing snow kind of thing.
In 2014 the price of oil started to collapse. It was devastating for the exploration industry. At the worst point, up to 90% of exploration projects were cancelled or put on hold. The subsequent knock-on affected millions of people around the world. Workers, suppliers, support staff etc. And their families. Unemployment, personal financial collapse and suicides followed.
Of course, to maintain their margins, the oil companies had to cut exploration of new reserves before production. But the government kept getting their free taxes, didn't they? So I agree with your post - don't put all the blame for any high prices on the oil company. Blame governments. Maybe if they had cut their tax and royalty rates, my side of the industry, exploration, could have been helped.
So before anyone complains about the prices going up again, think about the millions of people around the world who need a higher price in order to work and provide for their families. Well, that's my 2 cents, thank you!
You are spot on and I note that emphatically in my post that MOST people in the industry are REAL hard working folks with a ton of expertise. I work in the oil and gas sector in Russia as a consultant (economics and investor relations issues mostly) and the people I work with are everyday folks. When oil prices are higher, it benefits global GDP and the percentage increases to U.S. consumers a much smaller than the percentage increase in price per barrel. The U.S. tax system focuses on consumers instead of extraction, which I think is flawed. Most countries tax based on extraction (in Russia, it is called the Mineral Extraction Tax - MET). In this way, taxes are collected based on using national resources that belong to the people of that nation.
Side note, while exploration has slowed here and Russia, it is stilling growing. Plenty of opportunities in the sector here. ;)
Good reply, thank you. yes Russia has need to keep going, so important for their economy. I've worked all over, but never in Russia. Maybe I will have to try to search some Russian companies in my sector. Cheers!