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Oil war brewing on several fronts in Texas Oilmen from Oklahoma and Texas are preparing to file a lawsuit which would compensate them for losses and bar foreign oil from the United States by The Associated Press
Anyone who lives in the oil patch can sense increasing desperation. Threats of legal action against producers of foreign oil are escalating into action. Legislators are adding a strong dose of nationalism to their calls for an end to imports of cheap oil. Those without the stomach for a lengthy battle are cashing in their chips.
Oilmen from Oklahoma met with their Texas counterparts the first week of March in Midland, Texas, to prepare to file a lawsuit. They’re seeking compensation under trade laws prohibiting import price-slashing that causes substantial harm to at least 25 percent of those in an industry. Foreign oil imports the culprit “We’ve got to do something, even if it’s the wrong thing,” said Mike Cantrell, former president of the Oklahoma Independent Producers Association, who attended the early March meeting. “Otherwise, we will be out of business. Our backs are against the wall.”
Oilmen say that at best, the lawsuit would permanently bar foreign producers from flooding U.S. markets with cheap oil. At worst, they say, it would would grant some sort of temporary injunction against imported oil.
The industry is experiencing its worst downturn in decades. The number of rigs actively exploring for oil and natural gas in the United States plummeted to an all-time low of 562 last month. Analysts blame a worldwide surplus of oil for dropping prices.
The meeting, which drew dozens of oil company owners, gave the Petroleum Club the air of a war room. Lawsuit beats tax relief, loans Ted Collins, who owns Collins and Ware Inc., was among those who said he will contribute to the legal fees involved in filing the lawsuit.
“It may sound a little far-fetched, but it is better than trying to get tax relief or loans,” Collins said March 5. “We need higher oil prices.”
Collins said the lawsuit, while aimed at foreign producers, will effectively give the oil industry the same protection other industries receive.
“It can be successful because we protect every market in the world except oil,” he said. “If Sony started selling televisions far beneath the market price because they can afford to, it would be hindered to protect a company like RCA.”
Too little, too late for some Philip Anderson of Anderson Oil near Midland said he wishes the group the best of luck, but the action is too little, too late for his company.
“I just don’t have the money to support anything other than myself right now,” Anderson said. “I’m looking for a way out.”
As oilmen rally their forces, congressmen have stepped up efforts to besiege the Clinton administration with constant criticism over the crisis.
“This administration has the ability to stop imports and put a fee on these imports and incredibly, the U.S. has been buying 320,000 barrels of oil per day from Iraq,” said U.S. Rep. Larry Combest, R-Texas. “The U.S. has become the largest buyer of Iraqi crude oil, while our domestic industry is struggling to stay afoot.” Purchase of Iraqi oil irrational Combest said the purchase of Iraqi oil is irrational.
“We have spent $6.1 billion keeping Iraq from invading its neighbors,” Combest said. “U.S. fighter pilots are in daily dogfights and retaliatory bombing missions, yet the U.S. keeps buying Iraqi oil while we allow our small American domestic producers to waste away. This administration is financing a government and industry against which they are also engaging in military action. That is indefensible.”
Texas Tech petroleum engineering Professor Loren Davis said the current frenzy in the industry indicates how badly domestic oil producers are hurting.
“There used to be a 20-25 year cycle for the oil industry but we’ve been on a continuous downturn since 1983,” Davis said. “This is another steep decline that has caught everyone’s attention.”
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