The role of the US oil and gas independent has evolved over the decades. Change may have been the only constant factor since Pennsylvania drillers drilled the first US commercial oil well in 1859 (see special report beginning on p. 60).
In search for an historical perspective, this writer interviewed a wildcatter who has experienced countless changes confronting the industry in his 73-year career.
Michel T. Halbouty, chairman, president, and CEO of Halbouty Energy Co., Houston, acknowledged a shrinkage in the number of US oil companies.
"When I came into the business, there were 38 [US] major oil companies, and now there are fourellipseThose four are operating primarily overseas. We are not drilling wells like we should, our production is going down, and the imports are going up. That is bad," Halbouty said.
"We don't have the wildcatters that we had before. They are all gone. The individual wildcatters are capital-starved. I am able to do it because of what I have found in the past," Halbouty said. "The industry has suffered considerably since things started going bad in 1985. That's when everything went straight down. In my opinion, it will never, ever be like it was."
Declining US production
Halbouty said the declining number of wildcatters has contributed to a decline in US oil production. In 1970, US production peaked at about 10 million b/d of oil, while it now averages about 5.8 million b/d.
"I believe that our production in this country ought to go up as much as it possibly can. We ought to definitely drill the Arctic National Wildlife Refuge," he said of the ANWR coastal plain. He questioned whether the environmentalists opposed to leasing the ANWR coastal plain have ever visited it themselves, adding, "It's no scenic paradise of any kind."
"I was the first independent to go into Alaska... I leased [acreage] from the territory before it became a state. I did surface work in the late '40s and the early '50s with a pack on my back and a rifle in my hand."
He claims his company was the first independent to drill in Alaska. "I drilled a lot of wells. I found one gas field after it became a state. The rest of them were dry holes," he recalled.
Sept. 11
Halbouty believes the events of Sept. 11 underscore US energy security vulnerability, spawned in part by the decline of the American independent.
"We are 65-66% dependent on foreign [crude] oil. That's ridiculous. Especially now, since we have been terrorized, all of these companies' foreign operations are vulnerable. The US government drove [the independents] out, and the government has got to wake up and make amends," by lifting restrictions on drilling, Halbouty said.
He sees no comparison between the Sept. 11 attacks and the Dec. 7, 1941, attack on Pearl Harbor.
"With Pearl Harbor, we were fighting a living entity, the Japanese. We knew who they were. We knew something about them. In this case, we don't know who these people are. We really are fighting a shadow," he said.
Although he believes Osama bin Laden is responsible, Halbouty deeply regrets that the US became a target of terrorism.
"They dislike us because of what we are. It's a resentment more than anything else," he said, adding he has seen this resentment first-hand during his five trips around the world.
"I think this is going to be a long fight," he said. Meanwhile, he anticipates the oil industry will remain on alert. "We have to protect all of our facilities, pipelines, refineries, and everything that we do to get the oil to the people."
A wildcatter's passion
While he sees long-term growth in energy demand ahead for the industry, Halbouty expressed frustration with the US government and with the US public.
"The apathy of the government and the people of the US as far as the oil industry [is concerned] is absolutely beyond comprehension," he said. "As long as the people can drive up and get filled up, they don't give a damn about the industry. It wasn't that way in 1973-74, when they waited [in long lines] to get gasoline."
Given current world conditions and uncertainties, Halbouty said supply disruptions could happen again. He predicted the price of oil could exceed $35/bbl in a few years.
Meanwhile, he continues to maintain a small office, saying he no longer wants a big operation.
"In 9 months, I will be 93 years old, and I am still wildcatting...I'm going to keep wildcatting until the good Lord decides that he has left me here long enough."
