No Dumping Allowed
In December of 1998 the price of oil in America had fallen 50% the previous 11 months and was below $10 per barrel. A group of stripper well operators from the Oklahoma-mid-continent area, suffering financially from low product prices, formed an organization called Save Domestic Oil, Inc. (SDO) and filed a petition before the United States Department of Commerce against Venezuela, Iraq, Mexico and the Kingdom of Saudi Arabia under Section 701 of the United States Tariff Act of 1930.
Section 701 covers what in international trade is called, "anti-dumping" . In a nutshell, dumping essentially means unloading a product on the market at an unfair price to cause harm to others. Save Domestic Oil, Inc. believed the countries named in the petition were exporting oil to the United States at a lower price than it could actually be produced, thereby harming American stripper well operators. SDO referred to this as unfair trade practices.
The petition was quickly and decisively dismissed by the Department of Commerce for lack of support from large integrated US oil corporations, fears of international retaliation, opposition by both the Clinton Administration and American refiners dependent on imports to meet product demand . The DOC decision was appealed by SDO and major integrated companies in the US, like Chevron, Shell and Exxon were drug into the appeal. The DOC's initial ruling was upheld and the entire thing ultimately disappeared, including SDO itself .
The founder and Chairman of Save Domestic Oil, Inc. in 1999 is now the CEO of the largest shale oil producer in the Bakken and one of the largest LTO producers in the United States. He is big buds with the President of the United States and has likely directly or indirectly influenced US energy policies, specifically crude oil and natural gas issues. I am just speculating about that. He has, however, considered himself, his corporation and the entire shale oil industry to be a great "threat to OPEC" when he strongly advocated for lifting the 40 year old oil export ban in the US starting January, 2015 .
The same fella once called OPEC a "toothless tiger," but then essentially pleaded for OPEC and Russia's help to cut its production, to raise oil prices here in the US in 2016 . He butted heads with Venezuela, and large integrated US oil companies once again when he supported banning all Venezuelan oil imports to the US in 2017 .
Caracas, 2017. Today the situation is even worse. Venezuelans are literally having to eat house cats to survive. They have historically had no say in who runs their country; they want to work, eat and be able to take care of their families, just like we do in America. Socialism does not work; we all get that. Neither will $74 trillion in national, corporate and personal debt in the United States ultimately work.
With oil prices near $70 per barrel in May of 2018 the gentleman from North Dakota openly thanked OPEC and Russia for "boosting oil prices." His corporation then added more rigs in the Bakken and in Oklahoma and has been continuing to grow its crude oil and natural gas production steadily ever since, as has the entire US shale oil industry. That corporation has nearly 200,000 BOEPD of production and is still going wide-ass open, thanks in large part to OPEC production cuts and sanctions on Iranian and Venezuelan oil that have current oil prices propped up above $50.
By the way, I am a fan of this dude I am talking about. He was a stripper well operator, can drive a truck, and named his company after his family, like me. Not like me, he is a multi billionaire and an American success story. What's not to like about that! All this that I am writing about is public knowledge (please see references, below).
In 2019 more crude oil is being "dumped" on the domestic market in the United States, for less than it can be produced for, and is causing harm to stripper well operators and other conventional producers in America, including those in the Gulf of Mexico...once again. Only this time it's not Venezuela or the Saudis doing the dumping, its the US shale oil industry, including the fella operating in North Dakota and many like him. If shale oil was not being sold for less than it cost to find and produce, the LTO industry would have sufficient net cash flow to pay back its nearly $300 billion dollars of long term debt. If it was not totally dependent on credit and required to grow within net cash flow means, supply would be tighter and the price of oil higher and less volatile. That would be good for the entire oil industry in America, not just the stinking shale oil industry. I thought we were all in this...together?
I think this Save Domestic Oil, Inc. story was a little bit of irony, and a lot of hypocrisy, worth mentioning.
OPEC caught relentless hell from the US shale oil industry for supposedly driving the price of oil down 65% in late 2014, early 2015. Does this look like it was OPEC 'overproduction' that caused that price collapse?
At the city dump, after lunch, fixin' to catch a well deserved nap.