Oil Industry/Phil Ryall: State paying price for energy regulation Filed: 09/30/2000

The Bakersfield California

Electrical shortages lead to oilfield shutdowns in California, causing less production of oil and gas and will result in higher heating oil and natural gas costs this winter. And if that is not enough, there have been rolling "brownouts" on the West Coast this summer due to poor planning by the California Energy Commission and the California Public Utilities Commission.

What is going on?

In Kern County, oil fields are being shut down for days, and more than the usual two or three times a year for interruptible customers.

There have been up to 10 electrical shutdowns this year in Kern and other California oil fields. These shutdowns are more than just a loss of produced oil and gas, which has run into the millions of lost dollars, but also in manpower disruptions and extra costs for shutdowns and start-ups and some damage to wells and producing zones. The oil fields run on electricity. Due to air pollution rules, operators have lost the ability to use gas, gasoline or diesel engines to drive their producing wells during these electrical shortages. So they shut down whole leases or oil fields in some cases.

-- Martin Thompson (mthom1927@aol.com), October 02, 2000

Answers

continued

Does it make any sense that the oil fields should be shut down because the regulators have demanded that they electrify the oil fields and then some of the same regulators do not allow the construction of sufficient electrical power to run California in the summer?

In the United States, there is a lack of any real energy policy or coordinated effort by government and industry to produce and manage the energy that runs our country.

A legacy of overregulation with slow and difficult permitting to acquire or build new energy sources has left us with a shortage of energy and high energy costs. It is time to temper the regulations with some common sense and facilitate the energy strength of this country.

Many of the energy problems are solvable through free enterprise supply and demand actions if left unhampered by government regulations. It may be that the very cheap sources of energy are gone for a generation or so because of a lack of understanding by the public that we do have to temper our environmental accommodations with a reasonable amount of risk.

Every other country in the world (and our Gulf Coast area) allows exploration and development of offshore energy and other resources. Now that we have a pretty good understanding of the effects of resources development, we need to get on with developing ours in a reasonable way. We need to have the regulatory agencies and industry get together and determine a reasonable plan for energy for the next century.

I am told by electrical companies that the electrical shortage that we have now will be solved within two or three years by the number of generating plants that are planned and under construction, including six in Kern County.

But, why are we having to suffer for several years and especially since California has the most expensive power in the United States? I think that the main reason is that we are the most regulated state in the union and are beginning to pay the price. All of those who think we need this degree of regulation should turn off their power, quit driving autos, boats planes and trains and start planting a garden!

Phil Ryall is a consultant in the oil and gas industry. He can be reached at ryall@lightspeed.net

http://www.bakersfield.com/oil/i--1241776546.asp

-- Martin Thompson (mthom1927@aol.com), October 02, 2000.

Ten electrical shutdowns of oil fields in California over the summer? Hard to believe. What next?

-- Loner (loner@bigfoot.com), October 02, 2000.