• 7 hours PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 9 hours Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 11 hours Syrian Rebels Relinquish Control Of Major Gas Field
  • 12 hours Schlumberger Warns Of Moderating Investment In North America
  • 13 hours Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 14 hours Energy Regulators Look To Guard Grid From Cyberattacks
  • 16 hours Mexico Says OPEC Has Not Approached It For Deal Extension
  • 17 hours New Video Game Targets Oil Infrastructure
  • 19 hours Shell Restarts Bonny Light Exports
  • 20 hours Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 1 day Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 1 day British Utility Companies Brace For Major Reforms
  • 1 day Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 2 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 2 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 2 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 2 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 2 days Rosneft Signs $400M Deal With Kurdistan
  • 2 days Kinder Morgan Warns About Trans Mountain Delays
  • 2 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 2 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 2 days Russia, Saudis Team Up To Boost Fracking Tech
  • 3 days Conflicting News Spurs Doubt On Aramco IPO
  • 3 days Exxon Starts Production At New Refinery In Texas
  • 3 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 4 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 4 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 4 days China To Take 5% Of Rosneft’s Output In New Deal
  • 4 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 4 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 4 days VW Fails To Secure Critical Commodity For EVs
  • 4 days Enbridge Pipeline Expansion Finally Approved
  • 4 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 4 days OPEC Oil Deal Compliance Falls To 86%
  • 4 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 5 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 5 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 5 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 5 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 5 days Aramco Says No Plans To Shelve IPO
Alt Text

Trump’s Iran Decision Haunts Big Oil

Donald Trump’s Iran decision has…

Alt Text

This Unexpected Move Could Derail Mexico’s Oil Boom

A possibly disastrous move from…

Alt Text

Rising OPEC Production Weighs On Oil Prices

After seeing a slight drop…

Gail Tverberg

Gail Tverberg

Gail Tverberg is a writer and speaker about energy issues. She is especially known for her work with financial issues associated with peak oil. Prior…

More Info

Oil Industry Still Coming Under Fire

Oil Industry Still Coming Under Fire

Bashing the oil industry seems to be popular. The most recent example is the New York Times’ editorial They haven’t learned.

I don’t think any industry is perfect, but I also have a hard time seeing that any industry should be singled out for uniquely harsh treatment. Things are going to go wrong whenever human decisions are involved, so we need to figure out ways to make systems as idiot-proof as possible.

With respect to blow-outs, a Joint Industry Task Force was put together shortly after the Deepwater Horizon blow out to take steps very quickly that would reduce the likelihood of blowouts and improve the possibility of control if such blowouts do take place. I don’t think that it is possible to completely eliminate blowout risk, but steps such as this task force is taking would seem to go a long ways. Stopping work elsewhere doesn’t really help the situation.

One of the big issues with oil is our tremendous need for it, just to keep current systems operating. It is fashionable to think that wind, or solar PV, or biofuels can somehow substitute for oil. Wind and solar PV don’t substitute for oil. What they do is create intermittent electricity, which is not at all the same. Biofuels don’t scale well, and unless they are “chemically equivalent” tend to cause problems in the machinery that use them, if they are added as more than a small percentage of the fuel mix.

Another big issue with oil is its cost, especially when it is imported from around the world. There is a huge advantage in producing oil in this country if we can–in terms of local jobs, and in terms of keeping the funds in our own economy.

Oil from abroad may not always be as available as everyone expects, either. The New York Times editorial talks about the US controlling only 3% of the world’s known reserves. In fact, OPEC reserves used in calculating the 3% ratio seem to be greatly overstated, so the US likely does control far more than 3% of the world’s productive capacity. But a lot of folks have stuck their heads in the sand, thinking that OPEC has a great deal more productive capacity than it likely really has. Overstated OPEC oil reserves are an issue the New York Times should be bringing to its readers, but it has not.

Oil production in the US is not something that one can just turn on and off at will. People who work in the industry depend on stable job situations. If trained workers in the oil industry can’t find jobs in the oil industry, they will move on to other industries, where they can find jobs. If one stops and restarts drilling, the danger is that there will be fewer workers with experience later, making the risk of accidents higher.

Government oversight of the oil industry (and probably a lot of other industries) has not been very good. It is hard to see how this is going to change in the near future, because it takes a lot of training to understand appropriate procedures, and this really can only be learned by working in the industry. It may be that the oil industry itself will need to be involved with more aspects of regulation, and the government will need to play a more limited role. But halting drilling while all of this is sorted out doesn’t really help the result.

It seems to me that business can and should go on as usual, while all of the details of regulation and preventing future blowouts is sorted out. The industry had a good safety record prior to the Deepwater Horizon blowout, and it is taking steps now to prevent future blowouts. After seeing the high price that BP is having to pay for its spill, companies clearly have a financial incentive to make certain that they are operating safely. So it seems to me that the harsh position of the New York Times is unnecessary.

By. Gail Tverberg

Gail Tverberg is a writer and speaker about energy issues. She is especially known for her work with financial issues associated with peak oil. Prior to getting involved with energy issues, Ms. Tverberg worked as an actuarial consultant. This work involved performing insurance-related analyses and forecasts. Her personal blog is ourfiniteworld.com. She is also an editor of The Oil Drum.




Back to homepage


Leave a comment
  • Anonymous on January 01 2011 said:
    In my humble opinion the oil industry has taken an unjustified bashing. I have no love for that industry, because I seem to remember applying for a job with one of the majors, and being turned down, but I believe that they have done a good job for the citizebs if the Big PX over the years. The problem is that they are going to have to take the bitter with the sweet, and the bitter is that oil is scarce. And for reasons that I will not go into here, it will remain that way.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News