Oil — The Elixir of Modern Living

RMG1aBy Greg Sitek

Oil is one of nature’s more generous gifts. It is the lubricant of life as we know and live it. It is infused into virtually every aspect of our lifestyle. Here is a partial list:

Clothing Ink, Heart Valves, Crayons, Parachutes, Telephones, Enamel, Transparent tape, Antiseptics, Vacuum bottles, Deodorant, Pantyhose, Rubbing Alcohol, Carpets, Epoxy paint, Oil filters, Upholstery, Hearing Aids, Car sound insulation, Cassettes, Motorcycle helmets, Pillows, Shower doors, Shoes, Refrigerator linings, Electrical tape, Safety glass, Awnings, Salad bowl, Rubber cement, Nylon rope, Ice buckets, Fertilizers, Hair coloring, Toilet seats, Denture adhesive, Loudspeakers, Movie film, Fishing boots, Candles, Water pipes, Car enamel, Shower curtains, Credit cards, Aspirin, Golf balls, Detergents, Sunglasses, Glue, Fishing rods, Linoleum, Plastic wood, Soft contact lenses, Trash bags, Hand lotion, Shampoo, Shaving cream, Footballs, Paint brushes, Balloons, Fan belts, Umbrellas, Paint Rollers, Luggage, Antifreeze, Model cars, Floor wax,Tires,Dishwashingliquids,Unbreakabledishes,Toothbrushes,Toothpaste,Combnts, Hair curlers, Lipstick, Ice cube trays, Electric blankets, Tennis rackets, Drinking cups,

House paint, Roller-skate wheels, Guitar strings, Ammonia, Eyeglasses, Ice chests, Life jackets, TV cabinets, Car battery cases, Insect repellent, Refrigerants, Typewriter ribbons,

Cold cream, Glycerin, Plywood adhesive, Cameras, Anesthetics ,Artificial turf, Artificial Limbs, Bandages, Dentures, Mops, Beach Umbrellas, Ballpoint pens, Boats, Nail polish, Golf bags, Caulking, Tape recorders, Curtains, Vitamin capsules, Dashboards, Putty, Percolators, Skis, Insecticides, Fishing lures, Perfumes, Shoe polish, Petroleum jelly, Faucet washers, Food preservatives, Antihistamines, Cortisone, Dyes, LP records, Solvents, Roofing, and many more things we use often if not daily. (source: Yahoo Answers: https://answers.yahoo.com/question/index?qid=20080807185043AAlPQa3)

The US uses 18.89 million barrels of oil a day. Of that, “The United States imported approximately 9.9 million barrels per day (MMbbl/d) of petroleum in 2013 from about 80 countries. Petroleum includes crude oil and refined petroleum products such as gasoline and diesel fuel, and biofuels including ethanol and biodiesel. In 2013, about 78% of gross petroleum imports were crude oil, and about 51% of the crude oil that was processed in U.S. refineries was imported.

‘The United States exported 3.6 MMbbl/d of crude oil and petroleum products in 2013, resulting in net imports (imports minus exports) of 6.2 MMbbl/d in 2013. Net imports accounted for 33% of the petroleum consumed in the United States, the lowest annual average since 1985.

“The top five source countries providing U.S. petroleum imports in 2013 were Canada, Mexico, Russia, Saudi Arabia, and Venezuela.  Their respective rankings vary based on gross petroleum imports or net petroleum imports (gross imports minus exports). Net imports from Organization of the Petroleum Exporting Countries (OPEC) countries accounted for 56% of U.S. net imports.”

(US Energy Information Administration http://www.eia.gov/tools/faqs/faq.cfm?id=727&t=6)

Oil, more than any other single commodity has a direct impact on our lives and living standards. The recent decrease in oil prices is great; or is it?

According to Moody’s Investors Service, (this issue includes an article from Moody’s on this topic) it’s good for some markets/industries while creating problems for others. While individuals are probably enjoying the lower prices some are beginning to suffer as oil-industry related jobs are going through serious negative change. According to a friend who manages an heavy equipment parts and service operations in Odessa TX, hiring has been put on hold as has overtime, extended travel and other services.

Our ACP Associate Publisher for Texas Contractor, Walt Robertson, expressed his concerns stating, “I’m sure everyone is aware of the price dropping of a barrel of oil! And we are all enjoying the low cost of a gallon of gas for our vehicles – That is great news for us – the consumer of general/normal everyday goods!

However – The news is not good for our equipment dealers ( our advertisers ) in the Oil Patch; Texas , Oklahoma, Louisiana and editor added: the Dakotas… Rumblings are taken place in the number of rig permits that are being sought , consolidation  with some of the smaller drilling companies , expansion plans for building of new corporate facilities are being slowed , corporate relocations are being put on hold , already 2 new massive refinery projects have been put on the shelf , layoffs in the thousands are taking place! It is too early to say what will happen as the years progresses – I lived in Houston during the 1980’s when they had their last oil bust – it was not pretty! Texas is a lot better now than it was then

“I’m not trying to paint a gloomy picture of our market – just giving you the facts on what is going on now. We still have a lot of work in the “ pipeline “ … With all the people that have moved into Texas the past 3 years ( 1250 people per day! ) we have school construction , residential & shopping expansion going on , the airports & ports are seeing construction activity and even class A new office building construction is good . If TxDOT receives the money they are seeking for infrastructure expansion – Texas should have a good 2015! Now – if these new Texans decide to move back to their home states??? 

Wells Fargo Reports: Regional Effects of the Oil Price Slump

Oil- and gas-related businesses are cutting capital budgets and implementing layoffs in the face of the continued slide in oil prices. The bulk of the burden is falling on just a handful of states. Energy-Producing States Brace for Job Losses The ongoing fall in oil prices will hurt domestic producers, squeeze their profits and reduce their capital spending and exploration efforts. Producers are not the only ones who will feel the squeeze. The decline in capital spending and exploration will also hurt support businesses, manufacturers of related equipment, and possibly spill over to firms that build pipelines, transport oil and sell the commodity. Weakness in the domestic oil and gas industry has contributed to a downward adjustment of our forecast for business fixed investment for the first quarter of 2015. The sharp pullback in oil- and gas-related investment and employment will largely be concentrated in energy producing states, while the benefits of cheaper gas will be more equitably divided among the entire nation.For full report visit: http://www.sitekconstructionzone.com/?s=Wells+Fargo+Reports%3A+Regional+effectsNext time you fill up look around and see all that we do with oil; besides fueling our vehicles we power our lifestyle.