Mr. LICHTBLAU. No; I was just saying that anyone who develops conventional oil does not need a Government protection in terms of a minimum price. The market price of new oil now is $11 a barrel. Senator HANSEN. And it is totally unregulated, as you know. Mr. LICHTBLAU. I think that should continue in the area of potential oil and gas production. As I said before, I would like to see new natural gas deregulated, and then I would like to see the producers of new natural gas and the producers of oil take their chances in the market. For conventional oil, technology is known so that the risk is much less. There is, of course, a possibility that oil prices will come down over a period of time mainly because the OPEC cartel might break up. When that happens, we can still do a number of things. We used to have oil import restrictions. We could put a tariff on oil. I don't think we need to underwrite such a program now when it is not required. Everybody who can develop conventional oil today is doing it. There is no hesitancy in developing oil resources on onshore and offshore areas. The hesitancy is in these new areas and that is where we need to put the Government in. But as far as old oil is concerned, as I said earlier, I think, in part, we ought to decontrol the prices; we ought to remove the price on secondary recoveries. Senator HANSEN. There are some practical problems, as you know. We happen to have some small refineries in Wyoming, and a number of them have a substantial amount of their own oil. But under the entitlements program, they are having a tough time. They are having to pay for the difference between the price of old oil and the average oil price. They are paying for the privilege of using their own oil. I must say I have to come down squarely on the side of moving as quickly as we can toward a totally unregulated energy economy. I know a lot of people don't agree with me on that. But when you have to answer constituents, as I have, and when you have Texaco send in a man to say they might shut down the refinery in Casper, Wyo., because they are cut back on their ability to use their own oil, then you begin to wonder about the entitlement and allocation regulations. It just seems to me to be an impossible situation. I would say also that the price of stripper well oil should remain unregulated. As you know, a stripper well is a well that produced last year less than 10 barrels of oil per day. There are about 350,000 stripper wells in this country today, and I think the public is very fortunate that all of that stripper well oil is exempted. So we are getting over 114 million barrels a day from stripper wells. If you cut the price back as some people recommended-not many months ago, members of this very committee recommended putting it all back to $5.25 a barrel-I can tell you, you would be capping most You can pull the casing and sell that for $25,000, and you would be far better off than you would to keep pumping. Mr. LICHTBLAU. I don't think there is any argument to roll back the price of new oil to the $5.25 level. But while I don't go along with you that we ought to remove control on all of the old oil, I would say $5.25 today is a lot less than $5.25 was 14 or 15 months ago. Senator HANSEN. That is the point that you made in your testimony. I am aware of that. Mr. LICHTBLAU. You ought to adjust for the inflationary increase periodically and let the industry know you are not doing it on a haphazard basis. That, plus the removal of price control on secondary recovery, would probably phase out the restrictions of old oil over a period of years. That is as far as I would go on that. I certainly would not recommend a rollback, though there may be a rollback because of the OPEC cartel breaking up eventually. Dr. SAWHILL. I don't have anything to add, Senator Hansen. Senator HANSEN. Thank you very much; you have all been very patient. [Whereupon, at 1:50 p.m., the hearing was adjourned.] |