Oil Supplies at Risk
Neela Banerjee,
“Fears,
Again, of Oil Supplies at Risk,” suggests several scenarios where
terrorism or war in the Middle East could drive the price of oil sky-high. This
is because two-thirds of the world’s known reserves are there, 649 billion
barrels, while the U.S. has only 3% of known reserves, 22 billion bbl.
When I was writing the energy editorials for The Wall Street Journal in the 1970s, I
discovered that of the 3.3 million oil and gas wells drilled since 1859, when
oil was first discovered in Pennsylvania, 2.5 million were drilled in the
“oil patch” of the United States. The main reason for this
concentration, I surmised, was not that God had put the oil there, as is the
case in the Middle East, but that our country is the only one in the world where
private citizens own the mineral rights of their surface properties. Everywhere
else, the government claims ownership.
If we are to reduce reliance upon Middle East oil, we need only encourage the
rest of the world to follow our example and give their citizens the mineral
rights to their property. Exploration would occur in places governments or major
oil companies would never consider. As an example, Madagascar is the size of
Texas and has the same geological formations. There have been several hundred
thousand oil and gas wells drilled in Texas, a few hundred in Madagascar.
In fact, the world has not yet been seriously explored for liquid petroleum and
natural gas. If you emptied Lake Tahoe, Nevada, of its water and filled it with
all the oil ever produced on earth, it would not fill half the crater. If we
could persuade Mexico
to start this ball rolling by giving its people rights to the minerals under the
ground they own, it would not be long before we would not need to import any oil
from the Middle East.
The Organization of Petroleum Exporting Companies
(OPEC) could not exist if there were tens of thousands of independent
wildcatters around the world instead of a few governments controlling the
spigots. If the idea spread through Asia and Africa, it would be several
centuries before we would have to worry about Middle East disruptions, embargoes
or energy shortages generally.
by Jude Wanniski. Reprinted from polyconomics.com
Reader Comment
I enjoyed reading your comments on oil. I agree completely. Before the current
conflict in Madagascar developed, I became interested in the country for its
natural beauty. In that process, I found out the country sold its oil refinery
to a junk dealer and issued mineral rights to some small companies in Texas,
including the company that was founded by H.L. Hunt.
Based on your comments, it would seem logical that one of the major oil
companies would want to develop the new Texas. Did somebody have his hand in
somebody's pocket.
Regards,
Alan Christian
