The "Oilmen Lie" Rule

As a rule, the men who lead the petroleum industry cannot be trusted to tell the truth about their industry. In other words, you should never accept at face value what oilmen tell you about the oil business. And by oilmen I mean the men who run the petroleum business, not the many honest, hard-working folk who risk their lives to bring us the oil and gas products to which our country is sadly addicted. 

(For the record, I am saying "men" quite intentionally, because historically the oil business was started, and is led and run, almost entirely by men, not women. I am not saying that women are incapable of discovering novel uses for naturally occurring substances. Many have. However, while managing a large petroleum-based enterprise with ruthless efficiency and blatant disregard for the environment is not something a woman cannot do, not many have.)

I realize that publicly questioning the moral integrity of the leaders of a large and powerful industry in a blog post is a bit risky. Who knows when someone might be checking out my background—maybe as part of a hiring or employment process—and come across this post. But hey, if you can't get to say what you believe when you're pushing 60, then when?

I'm not just talking about all the lying BP executives have been doing in the last 40 days (and before that when they said they could do deep water drilling without screwing up life as we know it for millions of people). I worked with oilmen for three years back in the 1980s. I was Chief Oil and Gas Tax Auditor for a state that became the tenth largest oil-producer in the Union.

I approached that job as I do most things, with a passion for the past and as a path to the future. I read the history of the oil business. And I went on Petroleum Accounting courses. I did a week-long petroleum auditing boot camp out in Texas Hill Country, courtesy of the Texas Comptroller's office. 

I also did a lot of research for politicians and taxpayers who wanted to see an increase in the state's oil production tax—the one I was tasked with enforcing—from 5% of gross value to 10%. In hearings for those proposed tax increases, the oil industry spokesman told state lawmakers that the oil industry would leave the state if the tax was increased. Eventually the tax was doubled and the state eventually rose from 17th to 10th in the production rankings. That oilman lied. 

He also lied when he said, in about 1983, that there was no need to double the production tax because the price of oil would soon double, from the then current price of $30 per barrel, to $60 a barrel, so the state would soon see a doubling of oil tax revenues without changing the tax rate. Oil did not reach $60 a barrel until about 2006.

A great way to gauge the honesty of oilmen over the years is to read these four books:
  1. The Seven Sisters by Anthony Sampson.
  2. The Prize: The Epic Quest for Oil, Money, and Power by Daniel Yergin.
  3. Texas Rich: The Hunt Dynasty from the Early Oil Days through the Silver Crash by Harry Hurt III.
  4. Oil! by Upton Sinclair (not the 2007 film “There Will Be Blood”).
Among the interesting things you will learn from these books is the way oilmen lied to Arabs in order to cheat them out of a fair price for their oil. And the fact that controls on the price of oil in America were originally put in place at the request of the oil industry, not imposed by the federal government. This may come as a shock if you grew up with the huge propaganda campaign oilmen mounted in the 1970s to get domestic oil prices deregulated. Yep, a whole lot of lying went on.

BTW, the last of those four books, Oil! may have the shortest title but it is one of the richest reads in twentieth century American literature. Forget the movie for which this book was butchered (There Will Be Blood). This long-neglected novel reveals a lot about American history that they just don't teach in (American) schools. Like the rule I'm citing here: Oilmen lie!

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