The big myth about Big Oil

by **Graeme** » Fri 09 May 2008, 07:46:37

The big myth about Big Oil

$this->bbcode_second_pass_quote('', 'Q')uick quiz: Name the top three oil-producing countries in the world.

For some reason, few people get this one right. The supplementary question is why? Could it be that popular mythologies make the correct answer appear impossibly wrong?

Yes, Saudi Arabia is No. 1 (with total oil production of 10.66 million barrels a day). Yes, Russia is No. 2 (with 9.67 million barrels). Nigeria, however, is not No. 3. Venezuela is not No. 3. Kuwait is not No. 3. The United States is No. 3 (with 8.49 million barrels).

Big Oil is big in one particular sense - when compared with Small Oil. Put the 10 largest U.S. oil companies together and you get 47 per cent of domestic American oil production. Add the next 10 largest U.S. oil companies and you get 57 per cent. Add the next 80 largest U.S. oil companies - altogether, the top 100 companies - and you get 75 per cent. Thus the 100 biggest U.S. oil companies produce only three-quarters of domestic American production. Add the next 400 largest U.S. oil companies and you get 90 per cent. The U.S. Energy Information Administration (EIA) stops counting at 500, attributing the final 10 per cent of domestic American oil production to "other companies."

It isn't only American oil companies that benefit. Property owners in the United States have property rights - unlike people in some oil-exporting countries where royalties flow exclusively to governments. For a proper appreciation of these rights, catch a rerun of the first (1962) episode of The Beverly Hillbillies. An oil company, probably an independent, would have paid Jed Clampett, Ozark farmer, a couple of dollars a barrel for the right to enter onto his land and to drill for oil. Now it would pay $25 a barrel or more. Windfall benefits, greater by far than Mr. Clampett's, flow to lucky Ma and Pa property owners across the United States to this day.

by **Tanada** » Fri 09 May 2008, 07:59:58

What the heck are they talking about? The USA pumps just under 5 mbd and Saudi is way under that 10.66 they are claiming!

Just how old are the figures they used for this article anyhow? What are they counting as oil?

by **Graeme** » Fri 09 May 2008, 08:23:29

Pity he doesn't quote his source. I found these data:

US is still number 3.

by **Tanada** » Fri 09 May 2008, 08:32:39

Yeah, that chart incorporates COndensates, Natural Gas Liquids and 'unconventional oil' in with the crude oil, which to my way of thinking is misleading.

That chart also lumps all the FSU together as one entity which strikes me as bizzar, but thats probably just me. By that EIA chart FSU is #1, KSA #2 and USA #3. It also shows every other producer as being under 4 mbpd, which is kind of interesting in and of itself.

by **joeltrout** » Fri 09 May 2008, 12:59:40

Thank you for bringing this to everyones attention.

People often forget about the good ole US of A.

joeltrout

by **aflurry** » Fri 09 May 2008, 14:34:48

isn't it bad news when the #3 oil producer peaked 36 years ago?

by **Twilight** » Fri 09 May 2008, 15:46:32

$this->bbcode_second_pass_quote('aflurry', 'i')sn't it bad news when the #3 oil producer peaked 36 years ago?

by **mos6507** » Fri 09 May 2008, 18:58:07

$this->bbcode_second_pass_quote('Twilight', '')$this->bbcode_second_pass_quote('aflurry', 'i')sn't it bad news when the #3 oil producer peaked 36 years ago?

by **ohanian** » Fri 09 May 2008, 20:24:17

$this->bbcode_second_pass_quote('mos6507', '')$this->bbcode_second_pass_quote('Twilight', '')$this->bbcode_second_pass_quote('aflurry', 'i')sn't it bad news when the #3 oil producer peaked 36 years ago?

by **cube** » Sat 10 May 2008, 08:51:11

$this->bbcode_second_pass_quote('aflurry', 'i')sn't it bad news when the #3 oil producer peaked 36 years ago?

by **Gazzatrone** » Sat 10 May 2008, 18:56:37

$this->bbcode_second_pass_quote('cube', 'P')robably the biggest myth about oil is the belief that we can transition into the soft and fluffy power down scenario.