Friday, January 28, 2011

The Hubris of Whining

Can't They Oil That Squeak?

The oil companies, through their full-time propagandists at the American Petroleum Institute, continue to complain about everything connected with oil and gas policy from the Obama Administration.

Has oil and gas exploration and production suffered under Obama? Hardly. The pace of activity can be measured by the rig count, the number of well drilling apparatuses in active use. Take a look at the recent history of the rig count in the United States:

Baker Hughes US rig count

It appears that the rig count has been going up quite briskly since a pronounced trough in spring of 2009. While the graph ends in 2010, recent figures show the trend continues--as of a week ago the count was up to 1,713, a hefty increase over the 1,282 rigs of the year prior, and approaching its highest level over the past many years.

And what about that trough? It corresponds very closely to the collapse of oil prices at that same time, and the contemporaneous slackening of oil demand and plunge in the overall health of the economy.

The pace of oil and gas development, as reflected by the rig count, closely tracks the economy and the prevailing price of oil, not the extent of regulation or drilling moratoriums. Endless carping from the oil patch about supposedly burdensome regulations in the US vis-a-vis the rest of the world doesn't hold up either. Here's the rig count for the same period for the world as a whole:

Baker Hughes worldwide rig count

It shows the exact same pattern.

There's no real surprise in any of this. Oil companies are run by savvy and successful business people. They would never petulantly decrease their exploration or production in the face of rising prices and surging profits just because their knickers are bunched over some rule or regulation.

Instead, the purpose of their protestations is simply to endlessly pressure our government to vitiate as much regulation as possible to make their operations as unfettered as they can. All of their various arguments are facile rationalizations for their real reason and only concern: to make themselves even more profitable.

Update: Fixed typos and grammar. Maybe I need an editer editor.

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