January 13, 2015

Folks,

This blog offers a single solution to the low price of oil in 2016. It is a political proposal for everyone who benefits from high oil prices.

In the 35 years this author has worked in the oil industry, its participants have never politically organized to protect their shared interests, the price of natural gas, but especially the price of oil. Our industry has been a surfer on a board and ocean owned and controlled by OPEC, and rode OPEC’s waves of generosity for at least 50 years.

In short, everyone that benefits from high oil prices, including oil companies, their shareholders, their private equity investors, oil service companies, attorneys, oil purchasers, all of their employees and royalty owners are requested to join this effort. It is a political effort to have Congress represent our industry aside from whatever anybody else wants, be it good or bad for us.

2 years ago the USA produced more than 10 million barrels of oil per day at a price of roughly $100/bbl. That is more than $1 Billion a day. About 5% of that went to taxes. That left $950 Million in the hands of oil companies and royalty owners. Oil companies received roughly 82% ($779 Million) and royalty owners received roughly 18% ($171 Million) of that total. That’s $346.75 Billion a year.

And now, OPEC has decided to flood the market with oil with the specific goal of destroying the domestic oil industry in the United States and increasing its market share.

Everyone listed above is going to join this effort. Why? To save our oil industry from OPEC, but specifically Saudi Arabia. They are going to join as a matter of financial self-preservation.

The objective is to make political contributions totaling $500 million to candidates in this year’s election for the House of Representatives and take control of that body for 1) our benefit, and 2) to change how Washington DC does business, spends money. Our Congress does not represent the interests of the American people. It approved legislation in the past 15 years that sent more than 50,000 manufacturing facilities overseas. Another example is Apple. Apple sells tens of billions of dollars of products in the USA, yet it pays no income taxes.

In short, there is only one industry in the USA that has the financial resources to do this, our oil industry. Yet in my 38 years in this business we’ve never joined together to protect what we should love and want to protect, our collective futures.

So, this author proposes we do so now, immediately. We have to target elections in the primaries and who those candidates will be, and the primaries start in less than 30 days.

If we don’t do this, we have no right to complain. The House of Representatives is where all bills of appropriations start. Our Federal gov’t spends no money that is not first contained in a bill offered in the House. The average salary of Americans is roughly $60,000 a year. The average Federal employee makes about $120,000 a year.

Races in the Senate are too expensive to target, requiring tens of millions of dollars per race. A typical seat in the House requires less than $2 million per election.

Finally, the only thing that matters in Washington DC on Capitol Hill is how much money you send up there. This plan will have to continue for decades to come. Candidates have to know their financial contributors are going to be there in two years if we hope to keep our representatives honest and loyal to us and our oil industry.

And here is what we are dealing with as articulated by former House member, Cynthia McKinney, who until a year or two ago this author considered to be a quack liberal. But what she states in this video about AIPAC is very likely true:

Its simply time for folks in our industry to start to protect their interests in the same manner AIPAC is effectively protecting the interests of Israel (Who can blame them?).

A friend of this author was laid off in the last 10 days from an oil service company, like more than 70,000 Americans in the past 2 years. He made more than $150,000 a year in that job. How much could my friend afford to contribute each year to help protect the price of oil, and consequently, his job? He’s losing more than $4,000/week right now. His is simply one example of 70,000.

The goal of this plan is for oil industry employees to contribute $500/year to a political candidate every two years ($1,000 every two years). That’s two car payments. 70,000 people times $1,000 is $70 Million. Royalty owners, oil companies and their current employees are going to make up the balance of the $500 Million, or $430 Million. And remember, two years ago, every day, oil companies and royalty owners were receiving $950 Million a day. This is a no-brainer.

Royalty owners may be the biggest group of contributors. Why? As an example, a wheat farmer in North Dakota’s Bakken Shale who was receiving $500K a year in royalties 2 years ago at $100/bbl is going to receive $150K this year at $30/bbl. Can royalty owners afford to protect their interests. The amount oil companies and royalty owners are daily receiving at $30/bbl is only $285 Million. They’ve lost $665 Million a day. Can they afford to help contribute $430 Million every two years to get Congress to protect our industry?

Things like this always draw a considerable number of gainsayers and defeatists. Those in the oil industry who choose to adopt that attitude today face the seemingly insurmountable problem that Saudi Arabia and OPEC are purposefully destroying our domestic oil industry and their jobs and financial futures, and AIPAC currently controls our Congress and the White House.

Common sense dictates this proposal is a matter of self-preservation and joining it is irresistible and without any credible objection.

Again, this author proposes we all do this immediately. We have to target elections in the primaries and who the primary candidates will be, and the primaries start in less than 30 days.

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