Leaders of the Panhandle Import Reduction Initiative, which launched in April in the Permian Basin, are seeking public meetings and rallies in other oil-producing zones to convert what’s now a regional initiative into a national movement, said Daniel Fine, associate director of the New Mexico Center for Energy Policy, who is working with local producers.
Those efforts will kick off in September with a presentation at the fourth Southeastern New Mexico Energy Summit in Carlsbad. After that, initiative leaders expect to hold public meetings in other shale oil basins, including the Bakken in Montana and the Dakotas and the Eagle Ford in South Texas.
“We’ll take it to Carlsbad first, and then it goes national,” Fine said. “We want to organize public rallies with producers and field workers whose jobs are at stake. This is a grassroots effort in the basins where the oil bust has taken place.”
The initiative is a reaction to the Organization of Petroleum Exporting Countries’ aggressive oil-pumping policies since mid-2014, which have helped drive global oil prices to ten-year lows and thrust domestic U.S. production into crisis. Initiative leaders say those policies were a deliberate effort by the mid-Eastern members of OPEC, particularly Saudi Arabia, to drive U.S. producers out of business.
Banning crude imports from overseas would undercut OPEC’s ability to manipulate prices, they say, and allow U.S. producers to ramp up domestic production to supply the U.S. market.
Today, about 50 percent of domestic demand is supplied by imports from the Mid-East, and foreign control of the market is growing, Fine said. From January-June, imports jumped by 10.5 percent, while domestic output declined by more than 400,000 barrels a day.
“Why are we buying imports from the Mid-East when OPEC has launched an offensive to basically shut down our industry?” Fine said. “It’s the same oil we’re producing in our shale basins where we have great supplies to meet market need. We can be completely self-sufficient, so let’s cut off over-supply of cheap imported oil.”
Initiative leaders will present their proposal to whomever wins this year’s elections, asking the new president to use executive authority to cease crude shipped from overseas by March 1. Only imports from Canada and Mexico would be allowed.
“It would break OPEC’s back with respect to price manipulation and lead to market prices set by U.S. supply and demand,” said Tom Cambridge, owner and chairman of Cambridge Production in Amarillo, Texas.
The movement has so far garnered support from about 600 producers and other industry sectors in New Mexico and West Texas, Fine said.
By and large, it’s led by small, independent producers, who are the ones most hurt in the oil bust, said John Yates Jr. of Yates Petroleum in Artesia.
“Import reductions would help stabilize the smaller companies and independents who are the most impacted, and it would put a lot of people back to work,” Yates said. “It would allow producers to make it through the downturn, while helping the state and federal governments with taxes and royalties. It’s incumbent on everyone to make sure we survive this.