Newspaper article THE JOURNAL RECORD

Oil and Gas Industry Faced with Dilemma

Newspaper article THE JOURNAL RECORD

Oil and Gas Industry Faced with Dilemma

Article excerpt

Unfortunately, the Middle East crisis will not forestall, or may even contribute to, an energy tax as Congress hashes out its 1991 budget, and coupled with higher prices in such an unstable arena, there will not be enough impetus to revive the domestic oil and gas industry, oil and gas executives were told Wednesday.

"The (budget) summiteers are likely to put together a package, and I think it's reasonably assured that if they do, there will be some major energy taxes," said Wayne Gibbens, president of the General Mid-Continent Oil & Gas Association in Washington, D.C.

He spoke at the annual meeting of the Oklahoma-Kansas Mid-Continent Oil & Gas Association in Oklahoma City, which concluded Wednesday.

"Notwithstanding what happens (in the way of domestic drilling incentives)," Gibbens said, "we're in jeopardy."

History shows, he said, that in the face of crises, American government tends to impose more controls rather than let the free market work. That is most unpalatable to politicians when energy prices rise.

"Unfortunately, the crux of the problem is higher energy costs. We have an economy based on cheap energy," said William O. Pitts, president of the Oklahoma-Kansas association.

"We have a dilemma. Congress and the (Bush) Administration are unwilling to accept the fact that a national energy policy will not succeed unless it is based, in part, on higher energy costs. Whether it is oil, (natural) gas, coal, nuclear, solar, or any other forms of energy, the United States cannot reach energy sufficiency without being willing to pay the price."

As it is, with oil prices increasing dramatically since Iraq invaded Kuwait on Aug. 2 to an all-time futures high of nearly $34 a barrel, Pitts said, "Today, the industry in Oklahoma is simply playing it on a day-to-day basis. …

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