Oil & Gas Prices

The stereotype of an oil or gas producer is a cigar-smoking fat cat, rolling in money.  Reality is different, particularly for PA’s small conventional well producers.  Conventional wells have been drilled in PA since 1859—they are shallow vertical wells—different than the Marcellus shale wells that came to PA fifteen years ago.

Pennsylvania’s conventional producers are small, usually mom and pop companies of a few people.  Life for them is not very different from the lives of most people, scraping by, patching up old equipment and hoping for a better tomorrow.

The abundance of oil and gas is both a blessing and a curse.  The ready availability of oil and gas has given the world’s population lifespans and comfort beyond the dreams of any king in history. But that same abundance—especially the enormous natural gas found in PA’s Marcellus fields—keeps oil and gas prices incredibly low.

In the graph of natural gas prices, below, inflation is NOT figured in—meaning that current natural gas prices are NOW LOWER THAN THEY WERE 40 YEARS ago.  Adjusted for inflation the difference is even more stark.

And when you pull up at the gasoline pump you might think gasoline prices are too high.  Most people think it’s because the oil producers are getting rich.  Again, the facts don’t bear that out.  When you look at the inflation-adjusted graph for oil prices you’ll see today’s price is the same as 40 years ago. 

So who is getting rich from your high energy prices?  Not the producers.  

In contrast to steady or declining commodity prices, the costs your local producers pay have gone up…substantially.  Steel products have risen as much as 300%, boosting the costs of well casings, tubing and production rods. Costs for cementing and stimulation services are up.

The hardship felt by PA’s oil and gas producers is severely compounded by our State government.  Regulations are heaped on oil and gas producers over and over, often with no regard to the laws of Pennsylvania that “insure” special considerations for small businesses. 

There are other businesses that are more profitable by a wide margin.  But we do what we do because…well…it’s what we do.  Many of our mom and pops are multi-generational.  We’re proud that we play a role in providing energy for our country and heat for our neighbors.  We do it because we love the areas we work in, our out-of-doors, our natural beauty.

So…we don’t ask for subsidies, or even sympathy.  But we do ask for a fair playing field.  Stop giving sweetheart subsidies and regulatory exceptions to solar and wind.  Regulate us fairly and according to the laws of Pennsylvania.