Why Doesn’t Louisiana Matter? Oil Crisis Explained

Today in America, the 24 hour news networks have ramped up their political coverage giving you a play by play of events, and a who’s who in the game of politics.  When a presidential candidate makes a statement, there are a host of microphones in front of him, and a political panel behind every camera breaking down every sentence and giving their opinions one way or another, with each network putting their spin.  When the politicians aren’t attacking one another, there is plenty of other news to go around such as the Brussels terrorist attack, Obama’s pose in front of a communist mural, Hulk Hogan’s sex tape, or what some celebrity has to say about global warming.  The coverage goes on and on, with none of these events having any real impact on our lives.  With all of the gibberish bloviating out of the media, none of it is real news which could potentially exploit a real crisis, such as the crippled oil industry devastating the southern region.

Other than our local news media reporting layoffs, and Louisiana’s budget deficit, you won’t hear much, if at all, about the escalating oil disaster looming here in Louisiana, from the mainstream media.  Louisiana seems to be left out of the conversation in terms of real news.  Everyone knows someone in the oil field who has been laid off.  Thousands of families have been affected by this, and millions are feeling its wrath one way or another, either directly, or indirectly.  And this isn’t news?  We all sit by our television sets watching the presidential debates hoping that the next question will be about the oil industry crisis.  By the end of the debate, again, Louisiana is left out.

Well here at True Media Rivals we are committed to giving you real news which the mainstream media refuses to cover.  We give the story behind the story.  In an attempt to spotlight Louisiana and put our concerns and devastations on the map, we will comprehensively break down these issues step by step. We’ll give the basics on how the oil industry works, where the problem began, terminology, and offer solutions to the problem in hopes that someone will hear our voices and help revive our state, our economy, and our lives.  At the end of this article you will have the knowledge to engage in intellectual conversations about our current oil crisis, and help spread the word to your friends, coworkers, and politicians in an attempt to get Louisiana into the conversation.

Oil Reserves:

We’ll start with a few basic terms so you’ll have a clear understanding.  When speaking of oil reserves, you’ll hear the amount being referred to in barrels.  What is a barrel?  1 barrel equals 42 gallons, plain and simple.

What are oil reserves? 

Wikipedia>  Oil reserves are the amount of technically and economically recoverable oil.  Reserves may be for a well, for a reservoir, for a field, for a nation, or for the world. Different classifications of reserves are related to their degree of certainty.

In laymen’s terms, it’s how much oil is in the ground! It isn’t actually stored in a literal barrel.

OPEC:

What or Who is OPEC? 

The Organization of the Petroleum Exporting Countries (OPEC) is a cartel of oil-producing countries which was established in Baghdad, Iraq, in 1961.  The head of it is Saudi Arabia, which is ruled today by King Salman bin Abdulaziz al-Saud.  It was originally established to control the amount of oil produced, to correlate with oil demands, producing more or less oil from its oil reserves and putting it for sale.  In other words, it controls the supply to keep up with demands.  With too much oil produced, it floods the market making each barrel of oil worth less.  Not enough oil for demand, will cause prices to sore as everyone is fighting for that same gallon of gasoline.  It makes oil more valuable.  During the recent flooding in Louisiana, sandbags became an increase in demand.  They were more valuable and people would be willing to pay more for that product.  Same concept here.  OPEC is supposed to be that moderator which stabilizes the prices for the industry and the consumer.

OPEC generates approximately 45 percent of the world’s total crude oil production, and more than 20 percent of the world’s natural gas production.  Moreover, OPEC owns more than four fifths of total global crude oil reserves, and around 48 percent of global natural gas reserves.  This is what gives their market influence.  OPEC should be maintaining prices in a Goldilocks zone-‘not too hot, and not too cold.’  But it is not!  OPEC has broken its promise and has committed to controlling the prices of oil in a dictatorial fashion.  More on this later.

SHALE OIL:

By now we are all used to the term oil field or oil drilling and have a basic concept of it.  We drill a hole in the earth and suck the oil out.  Well, it’s actually a lot more complex than that, but you get the picture.  Over the past few years there have been new terminologies, such as fracking, and other ways to retrieve shale oil.  What is that?  Stay with me here, this will all come into play later when I tie this article together.

What is Shale Oil?

Institute for Energy Research<  U.S. Western oil shale is a fine-grained sedimentary rock which is very rich in organic sedimentary material called “kerogen.” The shale is heated to separate the kerogen from the rock and the resultant liquid is converted to superior quality jet fuel, diesel fuel, kerosene, and other high value products.

For the most part, what you really need to know is that this is just a new technology to get new oil out of nontraditional areas of the earth.  And fracking is nothing more than using high pressure to fracture the earth to allow the release of hydrocarbons (oil and gas).

 

A Few Facts About the Industry:

In an article called North American Inventory it states:

The amount of oil that is technically recoverable in the United States is more than 1.4 trillion barrels, with the largest deposits located offshore, in portions of Alaska, and in shale in the Rocky Mountain West. When combined with resources from Canada and Mexico, total recoverable oil in North America exceeds 1.7 trillion barrels.

 

That is more than the world has used since the first oil well was drilled over 150 years ago in Titusville, Pennsylvania. To put this in context, Saudi Arabia has about 260 billion barrels of oil in proved reserves. For comparative purposes, the technically recoverable oil in North America could fuel the present needs in the United States of seven billion barrels per year for around 250 years.

In a nutshell, that is more oil than the dictatorial regime of Saudi Arabia, and possibly all of OPEC.  So, in actuality, if the United States has the largest oil reserves then why are we eating out of the palm of OPEC?  Why are we letting them control our price of oil, ruin our economy, and destroy families and incomes?  With this kind of playing power, shouldn’t we be independent of our energy?  Shouldn’t we control our prices?  Remember this, the oil crisis affects more than just your neighbor down the street who works, or used to work, on a drilling rig.  The 12 thousand unemployed oilfield workers which you hear reported about is referring pretty much to only them.  The truth is that it employs much more than that.

First, there are thousands of workers working directly on the rigs.  Then, you have service employees which specialize in certain tools or tasks when drilling and completing wells.  Then, there are the guys who work at the shops which build and maintain the tools and equipment to ship offshore.  Let’s not forget about the thousands of truck drivers who hotshot the equipment to the docks when needed.  There, you have the dock workers.  You have boat captains and crews delivering equipment and supplies to the rigs.  Now, we have mentioned thousands of more people employed in this industry.  These thousands of people now have more money to spend.  They go out with their families and do activities, giving the curators of these activities, employment.  Did I mention all of the cashiers employed at the gas stations providing the sales of all of the gas and fuel now needed by the truck drivers and vacationers?  Local events get attended, local shops sell more products, and so on and so forth.  So the 12 thousand laid off oil field workers mentioned in the news is only a fraction of the people really affected.  If you live in Louisiana, you are affected one way or another.  It is partially responsible for our current budget crisis in which our legislators recently raised a substantial amount of taxes on us.

Explaining Our Current Crisis:

For more than 5 decades now, OPEC has controlled the oil market causing booms and busts throughout its tenure.  All of the Booms and Busts have been manipulated by OPEC, Saudi Arabi in particular. They have controlled the market with their vast reserves and no one has ever had the reserve capacity to challenge their dominance since they have gone awry.  That is, until recently.

In recent years, the discovery of shale oil and the advancing technologies to retrieve it, has put a strain on the future oil dominance of Saudi Arabia.  In other words, they are no longer the big kids on campus.  The retrieval of shale oil, however not perfected, was increasingly becoming a reality in oil production in the United States, and Russia.  It was openly stated by then, Prince Alwaleed of Saudi Arabia, that the shale industry would threaten their livelihood.  Well, what about our livelihood?  In other words, the U.S. and Russia, were decreasing their dependency of OPEC oil by producing their own, and OPEC didn’t like it.  You can read more about that here.

So, what did they do?  They flooded the market with oil, driving the prices downward, making it impossible for newfound technologies to develop into economically sound processes.  Simply stated, before the shale technology was fully economically developed, the price of a barrel of oil became too cheap to cover the costs of retrieving the oil from the earth.  Not only did it hit our shale industry, but it is having a crippling effect on Russia’s as well.  The Saudis are losing hundreds of billions of dollars a year, from the cheap oil which they created, in an attempt to preserve their dominance in the oil market, and eliminating all competitors.

So basically, we have more oil than they do, but it is now too expensive to chase it.  Also the exponential amount of rules and regulations to offshore drillers brought on by President Obama has also put a damper on the production of oil, making it much more expensive to produce and longer to produce it.  The Bureau of Safety and Environmental Enforcement (BESEE), created by Obama, has a large impact on the efficiency of oil drilling and could be the topic of a whole new discussion.  For now we’ll stick to the main problem.

 

Solution:

Now that you have a good understanding on how the industry works, lets apply common sense for a solution.  The U.S consumes about 19.4 million barrels daily.  We import 9 million, and export 4 million.  That’s right, we export 4 million barrels daily.  The trade deficit which presidential candidate Donald Trump consistently speaks of, is largely attributed to this.  We sell it cheap and buy it high, plain and simple.  Why?  Sounds silly right?  It is silly!  First of all there is enough oil under U.S. soil to last us for 250 years!  So why buy from countries that do not like us in the first place, and rip us of tremendously on our trading?  We have the demand, 19.4 million barrels daily, to put millions of unemployed Americans to work almost instantly, and we have the product to supply our high demand.  In addition to that, what will happen to all of the oil being produce by Saudi Arabia?  Yep, you guessed.  Without their number one customer, the U.S., they would have an almost worthless product unless they would retract their production of oil to stabilize the prices.  We would be the big kids on campus controlling our own oil prices and producing millions of jobs, making American prosper the way we haven’t seen in many years.  Remember the trickle up effect discussed earlier on how many people are affected by this industry?  Why are we letting a foreign entity determine the outcome of our American economy, and its citizens?  Why are we being controlled and manipulated by a foreign regime when we live by an American Constitution, which governs our Constitutional Republic?  Truly, this is un-American and none of this gets reported in the news.

 

Conclusion:

The ramifications of the oil crisis is staggering.  Not only does it have an economic effect on our nation, but it has an even greater impact on Louisiana and its citizens.  Friends and neighbors are losing their homes and their wellbeing is becoming more and more challenged.  We all know someone affected directly by this calamity.  However, there are many more who are affected indirectly.  To me, this is a story to report on.  This is a topic that should be pounded at every presidential debate, rather than ‘is the sun heating the planet.’  Every news organization should be here, reporting on the front lines of this catastrophe, instead of reporting whether or not the Kardashians are in a relationship.  Why doesn’t Louisiana matter?

Louisiana does matter.  People across the country do not realize the effects of this oil field crunch, so they don’t feel compelled to bring it into discussion.  Most Americans don’t realize how it works and the impact it has on our nation.  The mainstream news media won’t report on it, so how else is this information supposed to circulate?  The answer is by you sharing this article with your friends, coworkers, relatives and people you meet.  Share it on your social media page.  Talk about it with people you meet.  Call in to syndicated radio shows and let’s force this into a national discussion.  Louisiana does matter and it is up to us to spread this message and help the spotlight shine on our existence.  We are the voice of our own destiny and we control the decibels in which we present it.  Together we can force Louisiana into the mainstream discussions.  Together we can force this topic into the presidential debates.  Together, we can make Louisiana matter!   The truth is now in your hands, what will you do with it?