The Panhandle Producers and Royalty Owners Association in partnership with other oil and natural gas supporters launched a grassroots campaign this week aimed at limiting foreign imports of oil. The plan, which was unveiled at forums in Amarillo, Texas, and Artesia, N.M., calls for import quotas that would be established during the first 90 days of the country’s next President’s administration. Mexican and Canadian imports would be exempt.
“American oil is competing against a cartel of government operators which has a stated initiative of driving an American industry out of business,” said Tom Cambridge, a Panhandle producer and campaign supporter.
The plan, labeled the Panhandle Import Reduction Initiative, also calls for quotas on heavy crude oil that would be phased in over a set amount of time and a 10% cap on imports.
The grassroots effort stems from a belief by many in the oilfield that Middle Eastern producers are flooding the market in an effort to regain market share lost to U.S. operators in recent years. According to the U.S. Energy Information Agency, domestic production is forecasted to hit 8 million barrels a day in 2017, down 1.5 million from 2015 numbers.
Now, as OPEC members have again refused to freeze production, domestic producers are searching for strategies to regain market share.
“This is very appropriate, as yesterday, OPEC and Russia and various countries met and decided they weren’t going to freeze oil and in fact, OPEC said they will increase production again,” Cambridge said on April 18. “This will drive the price down to $26 (a barrel) again. This is not a good thing for our country.”
Dr. Daniel Fine, an expert in energy futures and economics, has been tasked by the producer group to present the campaign details to lawmakers. Fine, who is an energy advisor to New Mexico Gov. Susanna Martinez, is the Associate Director of the Center for Energy Policy at New Mexico Tech. During a legislative hearing last fall in New Mexico, Dr. Fine testified that areas of increased production in the U.S., including the Permian Basin, are now “the target of an oil price war between OPEC and Non-OPEC oil supply.”
“What happened at OPEC gives us today the only going strategy to deal with the oversupply (of oil),” Fine said. “We have drawn the line in the sand and said ‘you have gone too far; we will not buy your oil.’”
Oil prices have fallen from a high two years ago of more than $100 a barrel to a 12-year low of just under $30 a barrel causing domestic drilling and production to plummet.
“What we propose to the country and to the industry is a return to President Eisenhower in 1959, when he, by proclamation, established import quotas on foreign oil,” Fine said. “We will take care of Canada, our hemispheric ally. But OPEC, no. We’re going to rigorously put quotas on the import of oil.”