Published: 1:00 pm, Wed. Apr. 20th, 2016Updated: 9:11 pm
A grassroots movement based in the Permian Basin region has come together with a plan – the Panhandle Import Reduction Initiative – to combat Saudi Arabia’s ability to produce and sell oil for a price much lower than the U.S. is able to sell.
Dozens of Artesians and leaders in the oil and gas industry came together Tuesday at the First Baptist Church Total Life Center to listen as Dr. Daniel Fine, an oil and gas economic strategist and associate director for the New Mexico Center for Energy Policy at New Mexico Tech, spoke about the problems regarding imported oil. The meeting was a response to a recent meeting in Doha, Qatar, in which oil-producing countries failed to reach an agreement to freeze oil production levels.
“Members of OPEC (the Organization of the Petroleum Exporting Countries) and Russia decided they weren’t going to freeze oil and said they will increase production again,” said Fine. “This is the battle of reserves; a battle of output.”
Fine, who penned “Foreign Oil Imports: The Danger to the American Light Tight Oil Revolution and National Security” for the Panhandle Import Reduction Initiative, feels this import dependence is caused by oil producers in Saudi Arabia and other Middle Eastern gulf states like Qatar and Kuwait manipulating the economy by undercutting prices.
“We’re importing the same oil we have in our own country,” said Fine. “As we produce oil, we displace Saudi imports.”
Price and supply wars against oil communities in New Mexico, Texas and North Dakota have affected working families and producers, not only in those communities but all over the United States.
“We have drawn a line in the sand and said, ‘You have gone too far; we will not buy your oil,’” said Fine. “Saudi Arabia is taking our market share, and currently, we are returning to an import dependence as we have faced in the past.”
The grassroots group has gathered its communal power to ask the next president of the U.S., whoever he or she may be, to impose a strict import quota on foreign “light tight” oil next February. Light tight oil, or oil from shale, is an American technology triumph, according to Fine.
“These countries are constantly checking our prices every day so they can sell their oil for a lower price,” said John Yates Jr., president of ABO Petroleum and chairman of Yates Petroleum Corporation’s board, who was present at Tuesday’s meeting.
“They are trying to drive us into bankruptcy so their competition – us – is eliminated.”
The import quotas Fine is suggesting echo similar quotas President Dwight Eisenhower implemented during his term in the 1950s. Eisenhower’s import quotas limited heavy sour oil, or crude oil with high levels of the impurity sulfur, to 10 to 12 percent of the yearly American oil demand – enough to take care of Canada’s current exports to the United States as overland sources.
Fine will continue to spread the word about import quotas at his next stop at the Four Corners Oil and Gas Conference in Farmington May 11. The conference’s mission is to provide information on new types of technology as well as new and changing regulations that affect the oil and gas industry.