Expensive Oil Creates More Oil

Monday, 25 August 2008
It has been said that the best cure for high prices is high prices. I am seeing the veracity of that observation in my own backyard. I live near a "worked out" oil field that was capped off after oil prices fell in the 1980's. Today, a handful of local entrepreneurs are going back and reworking the old field using today’s new horizontal drilling and extraction technology. If current production holds through the end of the year, the reworking of this marginal field will add one million barrels of new oil and 10 billion cubic feet of new gas to our nation’s supply in its first year. Taxes on this new production has already added $47 million in new revenue through June 30. This success has also attracted interest in new wells, with 25 drilling permits issued in our county this year and 27 in the adjoining county. No doubt similar things are happening all over the world. The local oil people said the big problem in getting more new oil is not a lack of oil in the ground but the nationwide shortage of drilling rigs and drill pipe.

To see this article, and others like it, visit Alan Nations blog at the Stockman Grass Farmer's website.