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The Hughes Report
Saturday, November 8, 2008
Energy Colony States Wrongly Criticized
Topic: Energy Independence
People in most states do not understand what it means to live in an oil and gas-producing state.  There was a time when natural gas was just a by-product of oil production and too cheap to make it profitable to store or ship.  But it was dangerous, being both poisonous and explosive, so they would "flare" it, lighting up the gas well and letting it burn.  There were places like my dad's native Sand Springs, OK, that were lit up like daylight by gas flares 24 hours a day.

People also used to run a pipe out to such a well to use for lighting and heating their homes.  These pipelines were not pressure regulated, so it was fairly common for someone's house to blow up.  More safety regulations were enacted, such as the addition of the stinky smell, after the school in New London, Texas, blew up, killing over 200 children and teachers.  I have heard that there are still towns in which natural gas is provided free of charge, but they are the exception.

Back in the 1920s, my maternal grandfather left the farm in search of a better life.  He tried his hand in the oilfield in the boomtown of Sour Lake, Texas; but they say that in those days, with the wooden wildcatting derricks built close together, an average of one man per day was killed.  So he moved on to the great refinery in Baytown, and worked there his whole career (in addition to being a minister).

Oil is to Texas, Oklahoma, and other producing states like a crop, like corn in Iowa.  When the business prospers, there are jobs and prosperity.  The government would not overburden the corn growers in Iowa -- on the contrary, they subsidize them tremendously -- but they will overburden the oil and gas industry with regulation and taxes.  They do the same with nuclear energy.

Texas and other producing states have long been treated as energy colonies by the Northeast and other parts of the country.  Our oil and gas should be dirt cheap, but due to interstate price regulation, prices are kept low outside the state and artificially inflated here.  At the same time, the same states that blame the oil and gas companies, and producing states, for high prices maintain a NIMBY ("not in my back yard") attitude.  They want pure air and clean beaches, but still demand cheap fuel.  If you look at a map of oil and gas pipelines in the US, you will see dozens running from east of Houston, and other parts of Texas, up to the Northeast.

The demand for cheap oil and gas gave OPEC and other foreign producers the opportunity to undercut domestic production.  Since the 1970s, domestic production has largely "gone to pot," as we say, meaning allowed to deteriorate, along with jobs.  We have been buying and using all the foreign crude we can get, and wanting more.  Meanwhile, oil refining states bear the lion's share of the hazards of polution and danger (since we still refine the foreign crude), at the same time being picked on by the EPA, and denigrated by the "clean water and beaches" states, for those same hazards.

Posted by hughes at 12:54 PM CST

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