The editorial “An unprecedented rebuke” (O&GJ, 10/13/08) might better have been titled “Unwarranted hostility” (OGJ, Oct. 13, 2008, p. 20). A major dilemma facing the US petroleum industry and especially international oil companies is that of being taken to task by the US government for doing what the industry is supposed to do: that is, to find and produce energy for the nation at the lowest practicable cost. This is a formidable challenge recognizing that new petroleum reserves are becoming increasingly hard to find and expensive to produce.
Add to this the fact that the government-owned national oil companies (NOCs) control over 70% the world’s oil reserves and are using their growing wealth to invest in energy-related activities outside of their national borders. The long-term implications of this growing NOC presence in the international oil arena are not clear, but almost certainly it will impact energy security and stability of oil markets. For example, developing competition from NOCs involves governments where traditional economic constraints may be less of a consideration than in the private sector. This poses new, potentially costly challenges for international oil companies.
There is insufficient understanding and appreciation in US government circles of what the petroleum industry does year after year in helping to assure the nation of adequate energy supplies. This governmental insensitivity simply feeds public hostility and makes it more difficult for the industry to get on with its job. Understand, this is by no means an appeal to government to coddle the industry. However, government should avoid selectively imposing harsh new taxes and restrictions on an industry that faces extraordinary challenges in finding new petroleum reserves in increasingly hostile natural environments and in competition with other foreign-based international oil companies and well-financed NOCs.
In short, American oil companies are involved in fierce worldwide competition to secure energy supplies to meet our nation’s needs. Government should take care not to hobble our country’s team.
Thomas Wyman
Palo Alto, Calif.