OIL’S WELL THAT ENDS WELL
THE YARD — If I put it right here it might blend in with the trees. As for noise, I’ll only drill at night so the neighbors won’t be disturbed. Eat your heart out, Bick Benedict and Jett Rink. Oh, hi. If you are wondering, I am going to drill an oil well in my front yard, or, if the block warden objects, I’ll put it out of view in the backyard. You might do the same and get your fair share. Texas has about $140 billion in “petro-wealth,” and I don’t have any of that except what’s in my car’s crank case or oil tank or whatever. Of this fortune, corporations, not individuals, own most of it, about 80 percent. OK, Mitt Romney said, “Corporations are people, too, my friend.” Wouldn’t you love to be Mitt Romney’s friend? Think of those lazy days on the Cayman Islands visiting his money, and imagine the Christmas presents he’d send.
An Austin company that provides information on oil leases, Blackbeard Data Services, reported those figures and breaks them down to corporations owning about $112 billion, attributed to petroleum reserves, and individuals own about $20 billion. The rest is held by trusts, nonprofit groups, government, educational institutions and religious organizations. “This is based on the value of proven, producing petroleum reserves in Texas, accounting for entities that have a working interest in those reserves as well as individuals earning royalties.” I have no idea what that means.
Houstonians in the oil business, or awl bidniss, account for the largest share, about $48 billion. Midland came in a distant second, with $15 billion. San Antonio ranked eighth with $3 billion. Dallas doesn’t seem to be ranked. This omission may be because Dallas County is one of the rare counties in Texas that has never had a working oil well. (No one ever heard of the Dallas Oilers. Actually, few people ever heard of the Houston Oilers.) But Big D is Big Oil’s general store, bank and insurance company.
Blackbeard Data says that typically oil leases send about 80 percent of revenue to oil companies and 20 percent to mineral owners in the form of royalties. The report states: “That’s because oil companies that have a working interest in those projects essentially take on all of the risk. Over the last 20 years, they’ve generally seen their percentage of the revenue decline as modern production techniques have made their work less financially risky.” This is hard to believe since Irving-based ExxonMobil Corp., the world’s largest publicly traded oil company by market value, posted earnings of $44.9 billion in 2012. For 2013, the earnings were $32.6 billion. In the last quarter of 2013 they earned $8.25 billion, which analysts called a “mediocre quarter.” Huh, $8.25 billion was a “revenue decline?” That’s like water-board torture is “enhanced interrogation” and Huntsville is full of “legally challenged” inmates.
The big deal these days is not only oil but gas and fracking. We love the tax money fracking brings into our state and local collections, but it is a messy business — tearing up our roads with big trucks, using our water, noisy and generally disturbing the neighborhood. Avid defenders of fracking include ExxonMobil and FreedomWorks, the well-financed anti-tax organization (thanks to the Koch Brothers of oil and gas fame).
The supporters had their work cut out for them when a fracking operation was to begin recently in Denton County. First reported by WFAA-TV in Dallas and picked up by other news media, a suit was filed to stop the operation because a huge, ugly water tower was being built next to a ranch. This means, the suit charged, the project will “sell water to oil and gas explorers for [hydraulic fracturing], leading to traffic with heavy trucks” that would interfere with the quality of life and the real estate value of the sizeable ranch. So the neighbors were outraged. One party to the suit is none other than Dick Armey, founder of FreedomWorks. Another party is the owner of the ranch, Rex Tillerson, the CEO of the ExxonMobil Corp. As we can see, NIMBY is alive and (oil) well in Denton County.
As for my own neighborhood, Running Rats Acres, it would welcome a huge, smelly and noisy fracking operation with large trucks churning the roads into gravel. It would mean an actual improvement for our roads. We would get a monumental water tower where our kids would paint “Seniors ’14” on it if any of them got that far in school. Neighbors would find employment as security guards to protect the equipment from being stolen by other neighbors. Finally, who would complain, or even notice, my little drilling rig beside a monstrous machine?
Should I hit Texas Tea, I would join the Petroleum Club, dropping my membership in the Linoleum Club. I’d tear down my house, even the satellite dish by the mail box, build a huge mansion, and sue to get rid of that ugly fracking project down the road. It’s deflating real estate values. True, despite my wealth I might not fit in with the other oil barons. Got to learn their lingo. Rigs drill down, not up, right? A Christmas tree does not have a star on top and presents underneath. Depletion allowances are good, obscene profits taxes are bad. I can’t buy a member of the Texas Legislature or Congress, but I rent one for the afternoon.
Despite what others think, not every Texan has a rig in the driveway. On the other hand, once I interviewed Glenn McCarthy for an article in Texas Monthly. Behind his desk McCarthy had this huge blowup of his face which had appeared on the cover of Time magazine. I mentioned that he had a particular interest in the oil patch because it was his business. He leaned over his desk and said, “Son, we’re ALL in the awl bidniss.” I’m just trying to make his statement true.
Ashby is oily at email@example.com