I have been an independent oil and gas producer for the past 58 years. When I sold my first barrel of oil, the price of crude oil was $1.20 a barrel (partly subsidized by the federal government), and gas was 25 cents per thousand cubic feet.
The price of crude rose slowly to a high of $2.90 a barrel until the early 1960s.
Starting then, foreign oil, mainly from Saudi Arabia, began flooding the U.S. market. The volume of Arabian oil reached the point that regulators in Texas, where I then worked, kept lowering the amount of oil we could produce. It got down to seven days each month. The pipeline buyers lowered that to five days per month. This did not affect what we call “stripper wells” – wells that made fewer than 10 barrels a day. However, the cost of producing was rising during these times.
It finally reached a point that many wells that produced only two or three barrels a day were plugged because they were unprofitable.
All of the various oil and gas associations begged and pleaded with the federal government to put an import fee on all this foreign oil so the American producers could produce at a profitable rate and explore for new reserves. I happened to be president, in 1966, of the West Central Texas Oil & Gas Association and also a member of the Independent Texas Royalty and Producers Association and a national producers group. We made many trips to Washington begging Congress to put import fees on foreign crude, but to no avail.
We told our story a number of times, that one of these days the growing importation of foreign oil would make us more and more dependent on foreign crude oil because the American producers could not afford to produce under these circumstances.
That day arrived in the early 1970s when the oil countries decided to limit the amount they were shipping us, and this was the cause of the high prices of gasoline and the long lines to buy it.
Another reason for the price of crude oil being so high now is that we do not have the refining capabilities to serve all our needs, which came as a result of being more dependent on foreign sources. Our refineries are old and not capable of satisfying our needs.
To further our predicament, other countries are industrializing very fast and are demanding more oil. One of those countries is China. which is buying a tremendous amount of oil because of its growing participation in the world economy and its industrialization.
Congress has taken away nearly all of the incentives to explore and produce oil from home sources.
Another stumbling block is the environmentalists, who block every move to expand production of our own oil and gas.
I wish I had all those two- to three-barrel-a-day wells I plugged. At $50 a barrel, and operating costs of $3 to $5 a barrel, these wells would produce a nice income to go out and look for new reserves. If I could get a rig and workers, I would be out drilling near those old plugged wells.
Many Americans do not realize that because of the depression of the oil and gas industries, many people who worked on drilling rigs, well-servicing rigs and associated jobs are not available because they had to find work in other industries. Today, a well producer has to get on a waiting list for any work that requires experienced oil field workers.
The public should stop and look at the cost of a gallon of drinking water , milk, soda pop, liquid soap, etc., and what they pay for a gallon of the many liquids.
I hate to tell you, but the American people and Congress are to blame for $2.20-$2.70 gasoline. They sure didn’t complain or do anything about the future back in the 1960s, while they enjoyed a gallon of gasoline for 35 to 50 cents a gallon.
L.W. Brooks Jr. is a retired oil and gas producer from Lakewood.
