AROUND THE NABERHOOD: Oil, you got some ‘splainin’ to do’

Posted 2/25/16

On one hand, the state is set to lose an incredible amount of money over the next few years and that means tough times ahead for state agencies that provide services we all benefit from.

On the other hand, I drive a large pickup truck that I love …

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AROUND THE NABERHOOD: Oil, you got some ‘splainin’ to do’

Posted

Oil just keeps getting cheaper, and I am simultaneously thrilled and worried.

On one hand, the state is set to lose an incredible amount of money over the next few years and that means tough times ahead for state agencies that provide services we all benefit from.

On the other hand, I drive a large pickup truck that I love so much that I jokingly refer to her as my a wife — she’s even got a name, Lucy. I bought her in early 2014, a 2003 GMC Sierra crew cab with only 45,000 miles on her. Every detail was perfect, except for one minor “adjustment” her previous owner had made. Her tailpipe was cut off short to make her sound louder.

What better name for a red and loud truck that had some “splainin’ to do” about her tailpipe?

As much as I love Lucy, she has an incredible appetite for fuel, particularly during roadtrip season.

Having gas cheaper than it was when I started driving in 2003 is a big help on the food and beer fund for camping trips. But that doesn’t do me much good when many of my friends in other parts of Wyoming and Montana are unemployed from their oilfield jobs and unable to join in the fun.

It seems that for every pro there’s a con when it comes to fuel being cheaper.

The biggest con of them all is the unknown. How long will this last? What will happen several years from now if it continues?

There are a lot of questions that can only be answered with speculations, and I hate speculating.

International Petroleum Week was earlier this month. To celebrate, a global gala of delegates and energy producers from over 50 counties gathered on Feb. 9-11 to discuss the current status and the future of oil.

Jeff Currie, head commodities researcher at Goldman Sachs, summarized the outlook best when he said, “I wouldn’t be surprised if this market goes into the teens.”

Once again, more questions. Will anyone in America bother producing oil if the value of a barrel is less than $20? How much will gas cost if oil gets that cheap?

Although we have cut back on production in Wyoming, the global market has not slowed down production, according to Bloomberg. Apparently, only 0.1 percent of the total global output of oil has curtailed because it’s unprofitable, according to the estimates from global commercial intelligence and analysis organization Wood Mackenzie.

According to Bloomberg’s coverage of the International Petroleum Week gathering, the world’s supply of oil exceeds demands by 1.7 million barrels per day, and it is unlikely the price of oil will ever rebound to its previous level of more than $100 per barrel. In fact, there’s so much of it on hand that tankers are reportedly being anchored along shorelines as a way of storing the unprecedented excess oil.

Just like the surplus of oil, there’s a surplus of questions. Why hasn’t production slowed down? Where will we keep it all if we keep up this pace?

It seems that the only thing that’s certain is that I will be chugging down the road with Lucy for a very long time. At 13 years old she only has 60,000 miles on her, so we’ve got a lot of miles ahead of us. But with the economy the way it is looking now, who knows what the road and traffic conditions will be like.

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