Posted on 05/21/2008 3:35:11 PM PDT by kellynla
At that time 2/3 of the US production was from "stripper wells".
Stripper wells produce only a few barrels of oil a day.
It added up though. When the price wen so low they couldn't be kept in production, so they were shut in.
The problem is, once a stripper well is shut in, it cannot be brought back into production. The well has to be re-drilled a short distance away. The cost of re-drilling is too much to ever pay out, so the production is gone forever.
A better policy would have been to have a minimum price paid to stripper wells so they would not have been shut in.
Those involved in the oil patch knew this, but nobody would listen, so it is gone.
“There is way too much demand in the world and supplies are drying up?”
I’ll let “thackney” respond.
he doesn’t really seem to have any ideas of his own and all his friends are on the Left. He doesn’t even recognize conservatives as a voting population.
There is something this article is missing- the dollar was much stronger than it is now.
“the dollar was much stronger than it is now?”
Inflation? dollar of product in 1999 cost a buck & a quarter in 2007...
Aver. price of unleaded was $1.25 & crude was under 10 bucks a barrel in 1/99...so gasoline has gone up 300% while crude has gone up 1000%...can’t blame that on the dollar which has only gone up 27% since 1999.
Bottom line, we need more product and we need it MADE IN USA...pass in on!!!
LAKERS WIN!
NYTOL!
That report set the stage for what is happening now--instead of getting it right, and activity gearing up, it stopped, and another wave of stripper well P&As happened, just like '86.
The loss of that (then) marginally (un)economical production, which in aggregate was substantial, (even though individual wells produced under 20 bbl/day,) has hurt us, and put us behind the curve when global demand took off.
While the tariff might never actually kick in, it would provide a level of investor confidence which would bring in more development capital and permit more long-termed investment in infrastructure with less risk.
In reality, this is not an embargo scenario like the runup prior to 1986, but is demand driven.
Instead, Congress will propose taxes like the "windfall profits tax" and more fuel taxes, rather than propose a tax which could help development rather than harm it and the American people.
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