The price of gas

This doesn't sound right. Are you saying the "EPA and others," meaning
government regulation, reduced the oil well reserves?



I was there at the scene of the crime.

There are really two 'shortages' in domestic production.

One is the shortfall in refinery capacity. We haven't built a new refinery in
the US for 15 years, and that is entirely because of EPA regs and NIMBY
protests disguised as environmental concern.

But the shortfall in recovering domestic reserves is more complicated.
Enviromentalism is part of it, but there are economic reasons as well.

In the 70's and into the early 80's, we had a lot of domestic capability, and
the JR Ewings of the country saved our butts during the embargo. Unfortunately
for them, they made a lot of money doing it, so we destroyed them.

First was the "Windfall Profits Tax". Oil exploration has always been boom and
bust. Wildcatters made alot of money during the booms and invested in new
equipment and grew their companies during those times. During the lean years,
the capital reserves sustained them to the next boom. So, Nixon and Ford,
seeing the boom during the embargo years, called those profits obscene and
confiscated them with the "Windfall Profits Tax." Carter continued the price
controls Nixon started, then dropped them on everything EXCEPT petroleum and
health care, bleeding the Ewings with skyrocketing costs and controled prices
for their products. Then he finished off the domestic oil industry with the
Fuel Use Act, which attempted to force gas producers to sell their gas to
homeowners in the NorthEast at prices that did not justify the pipeline
capacity needed to get it there, by not letting them sell the gas to industry
in the South were they could make a profit at the controlled prices.

So, all our JR Ewings went bankrupt. Hundreds of billions of dollars worth of
equipment rusted away or was sold for scrap. The Arabs put the final nail in
the coffin by boosting production so the price feel for a while to 11 or 12
dollars a barrel.

Now, all the wildcatters who know how to get the oil have huge bankruptcies in
the resume and can't raise the money for new equipment. Further, the banks know
that the Arabs can drop the price any time they want to drive domestic
producers broke if they become a threat to their monopoly. So the banks arent'
going to finance domestic production so long as th Arabs can manipulate the
market to destroy their competitors.

The field is left to a few multinationals. And we're screwed.

Government meddling in the free market did it, but it was alot more complicated
than the EPA alone.

--
Wm. Donald (Don) Tabor Jr., DDS
PP-ASEL
Chesapeake, VA - CPK, PVG