Change the perception
I would like to bring to your attention some issues that Petroleum Foundation of America Inc. (PFA) is dealing with. Most of all we would like to change the perception of oil companies worldwide by being more community conscious.
Sometime ago I was speaking with an oil operator who had just obtained a concession in a country where there was increasing anti-American tension among the citizens. The operator was afraid for his safety in that country. In that conversation it dawned on me that firms operating in foreign countries ought to do more in relating with the common people. Why is it that every so often there are cyclic government changes throughout the world. First the right wing takes power and preaches free market capitalism, but for whom? Most international operators will agree that most of the wealth of free market economies in developing countries goes to a select few, generally people who are associated with government officials. We oil companies strike concession contracts with the government giving them considerable revenues, but where does the money go? How often have you heard of secret bank accounts for government officials. I remember trying to find a "poor" Minister to sign a contract, going from his one palatial mansion to another. And on top of this how often are we approached for bribes? With oil companies feeding the government officials, and them often feeding themselves, who is looking out for the masses? Please know that I am not implicating all governments, but even the best of governments have great difficulty in serving their poor, who often comprise the vast majority.
History has shown that when all the resources go to a select few then the people revolt, and both the government and the oil companies become expendable because they have given little back to the people. History has also shown that the pendulum swings one way then another. To counter the right wing, the left wing rebels seek to overthrow the government. What do they have to lose? So they take power and throw out the exploiters, nationalize, and bring the state in control of everything.
Yes we are in a free market revival in the world, but how long will this last if we just take what we can while the opportunity presents itself? Instead of the swinging right-wing, left-wing politics, it is time we try for the center. Yes, we want to get a return on our investment, but everyone must benefit. Opportunities must be made available for the people at the bottom as well as the top. Unless we become more socially responsible, if we are just exploiters, then we become expendable.
The other area of concern is the environment. We oil companies sit on one fence and sling mud at the "environmentalists" and they do likewise. We oil companies must endure excessive environmental regulations and deal with the constant harassment and opposition from citizens, and local and federal governments, not to mention constant litigation from environmental attorneys. How did this situation get so divisive? Why are all these people trying to do in the "big bad oil companies?" It is my belief that it is the old pendulum again. For decades oil companies developed oil fields with little regard to the environment because there were no regulations. Now we are suffering the backlash. The pendulum has swung the other way, and our "butt is in a sling" so many of us have gone overseas. Can't we learn from history? If we repeat the same mistakes of the past we will get the same results. It does not take a great deal of intelligence to realize that unless international operators moderate the environmental effects of their operations then what has happened here will happen there. The writing is on the wall. Look at the growing opposition to oil developments and the law suits beginning such as in Ecuador with Texaco. We cannot wait for the government to impose regulations on us, we need to take measures to regulate ourselves.
Now don't get me wrong, I am no socialist or radical environmentalist. I am all for self interest, free markets, making money, and the like. It is in one's self interest that we must look beyond our own nose. Let us stop the pendulum because when the pendulum swings then it fuels the fire on discontent; it fills the rebel guerrilla or the environmental lawyer with anger and then we must fight. Let us do something really radical, let us work together in the development of resources in a responsible way, working with all parties concerned and sharing the proceeds fairly.
We at Petroleum Foundation of America want to forge a bridge between the forces of opposition, get people to meet in the middle and work together for the benefit of all.
William (Wil) Divine
President
Petroleum Foundation of America, Inc.Santa Margarita, Calif.
Workers aided in pursuit of Enron bonuses
I applaud the efforts of US bankruptcy Judge Arthur Gonzalez in Manhattan, New York, last week in permitting current and former Enron employees to hire two law firms to potentially recover $80 million in bonuses that was essentially stolen from them by executive officers of the company.
Similar to the sanctions imposed against drug dealers, corporate executives who have gutted the company coffers for personal gain should be forced to relinquish improperly obtained funds and property. This would certainly prove a deterrence to any corporate executive who contemplates squandering employee benefits in pursuit of a luxurious lifestyle.
Justice would truly be served and investor confidence restored in not allowing any executive to hide behind the corporate shield, but rather bear the economic responsibility for their wrongful acts.
In sum, it is the executive who should feel the pain that accompanies corporate economic devastation, not the innocent employee.
A. J. Zaccanti
Clinton Township, Mich.
Global oil production
Dr. Deffeyes and others, mostly using Hubbert projections, foresee a near-term peak in world oil production rate with ominous consequences (OGJ, Nov 11, 2002, p 46). By contrast, "official" projections by both IEA and EIA foresee no constraints in the next 20 years.
Meanwhile, in the real world, global oil production, excluding NGLs, peaked at 70.1 million bo/d in September 2000, over 2 years ago (see EIA Monthly Energy Review, October 2002, p. 147), and has subsequently declined by 5%.
And no one even noticed! And the sky didn't fall! Of course this is not the first time that world oil production has peaked, nor is it likely to be the last. The point: Forecasts are mostly academic exercises. In the real world, Adam Smith's "invisible hand" is continually adjusting supply and demand in real time. We all enjoy academic exercises, but let's not confuse them with what is happening out there where everyone else lives.
Arlie M. Skov
Retired
Santa Barbara, Calif.
Prestige tanker
The Prestige problem (OGJ, Dec. 9, 2002, p. 68) could have been lessened if it did not fly a flag of convenience and so had minimal safety inspections. It also would have been minimized by better decision making by the Spanish authorities. It might have been averted had the producer been an oil company listed on the world stock exchanges and sensitive to public relations disasters.
Even double hulled tankers will break up once in awhile. Tankering is a response to a high demand for oil. If the public wants to minimize oiled sea birds and the like then they should practice energy conservation that would tend to keep the tanker fleet at a minimum size.
Thus the disaster off Spain can only be indirectly linked to the "oil industry"but more directly linked to public and private sector elements that make decisions in terms of minimal crew training, use of aged tankers, and the worldwide increase in the consumption of hydrocarbons.
So this may be seen as a public relations disaster for the oil industry (whatever that is) but this approach will not be fruitful at minimizing such things in the future.
Robert Ehrlich
Vice-President
Residuum Energy Inc.
