VIEW: 18-17: News Mis-Reporting

VIEW FROM HERE
By Bob McDowell (Born Neil Carson) Number 18-17
NEWS MIS-REPORTING Week of 2018/04/23
As one who 'grew up' in the oil business, refining and marketing, and spent
around fifty years, after college and military, in the exploration, producing, and
transporting end it continues to irk me the way that reporters, editors, and 'news
chiefs' continually fail to use proper terms in stories with relationships to those fields.
Case in point; a story in the Tulsa daily paper the first week of April datelined
"Aberdeen S.D. (AP)" carried the headline "Oil spill first estimated at 210,000
'gallons' now said to be 407,000". The first thing of irritation is that anyone at all
familiar with the oil exploration, production, and transportation business KNOWS
that oil is always listed in "barrels". Gallons are used once the products are
produced in refineries for sale. For the previously uniformed, a 'barrel' of oil
consists of 42 gallons. On the other hand, in the oil field a 'barrel' of water is 30
gallons.
For a number of years it confused me why the difference. Then it dawned on
me. In the earliest days of drilling for and producing oil there were no pipelines and
it had to be carried out in barrels on wagons, then trucks and rail cars. In mule train
wagons, the weight made a huge difference. A gallon of fresh water normally weighs
8 pounds while a gallon of oil is expected to weigh 7, with slight differences for the
'grade' of crude. The 'posted' price for a barrel of oil in the field at the time that my
retirement as a 'producer' happened, in 1999, was based on '40 API gravity' with
discounts of a cent or two for each degree above or below that base.
The story in the paper did not mention how the spill came to happen, except
that there was some damage to the pipeline. That almost aside remark caused me
to suspect that the damage could very well happened deliberately when construction
was shut down for the night, keeping in mind the protests that took place, with some
violence involved. My suspicion then then that these were funded by outside interests
desiring damage to the USA economy. That has not been allayed in the years since.
The story does state the line was the "Keystone Pipeline in South Dakota", but not
which line built and operated by TransCanada, as they operate more than one, and
my impression was that the Keystone had not been built from the Canadian border
across Dakotas and Nebraska.
Spills from line damage can also be caused by other construction digging into
the line, just as it is sometimes in cities. It should be noted that there has been serious
opposition to the Keystone line from companies like Berkshire Hathaway, which owns
BNSF railroad and has reportedly on order over 1,000 tank cars to haul crude.
Recent history has numerous instances of deliberate damage to trains, including 'unit
trains' hauling oil. Some of these have seemed more of a terrorist source than just
equipment failure, but reports on them seem to cease prior to those of the final
investigation. Regardless, the record indicates that pipelines are much safer than
railroads or trucks, and charge even more less to the shipper than any other
transportation, even river barges.
Incidentally, the prices one hears on radio or sees in TV or print has little bearing
on the price actually being paid at the 'wellhead' (actually coming out of the tank on the
lease). Those prices, which fluctuate about daily, are for oil "futures", that is a gamble
that at a certain time in the future oil will be selling at the listed price. Several years
ago
when those prices were just above $200.00 per barrel, the price being received by my
late wife, Anne, was just a little over half that. And in my memory my production
beginning in October 1954 was $2.69 in Nebraska. Lest one believes that oil producers
are 'getting away with robbery'. But then costs have escalated exponentially since as a
well there could be drilled to almost 7,000 feet at a contract price of $15,000.
END
Composed April 10, 2018
Robert W. McDowell, Jr. © 2018 841 Lynwood Lane
918-451-1051 Broken Arrow OK 74011-8608
Email: abdmcfpi@localnet.com