ExxonMobil
is fighting criminal charges over a waste-water spill in Pennsylvania with an unusual defense contending that Pennsylvania’s attorney general singled the company out to stop hydraulic fracturing. The case regards 57,000 gallons of waste-water that leaked from storage tanks on an XTO (an ExxonMobil subsidiary), seeping into a tributary of the Susquehanna River.
Apparently other companies in Pennsylvania used proper methods and techniques to prevent such spills. According to the principle of “best practices” oil companies are expected to apply the best available technologies both for the discovery of new deposits and their maximum exploitation under existing economic circumstances.
Failure to apply best practices by XTO in Pennsylvania could imply approval of the opposite which could be called “bad practices” and especially big oil companies which are known to have manipulated oil prices throughout the history of oil and the European Union as recently as May 2013 reported that giant energy companies such as BP PLC, Royal Dutch Shell PLC and Statoil ASA manipulated prices in the $2.5 trillion physical oil market by giving false data to an oil index publisher, the Platts unit of McGraw Hill Financial Inc.
World oil consumption has increased and most projections expect higher consumption at least for the next 20 years despite higher prices than costs which have been achieved through manipulation and monopoly organizations such as OPEC with support or lack of real opposition or sanctions by major countries such as the USA.
The increase in shale oil production in the USA could imply support by the oil companies and the USA Government for even higher prices. This would be against the interests of America in general but very supportive of oil company profits. Investors in oil companies should form their own opinions and decide accordingly.
II. Introduction
An article in the Wall Street Journal of July 11, 2014 (pg. B2) on “Exxon Does Battle in Pennsylvania” by Daniel Gilbert caused my writing this paper as will be explained below because it raised issues that are fundamental to the world petroleum industry and include long-term exploration and development contracts between oil companies and host countries, exploration and development practices under such contracts, the use of technologies in all aspects of the petroleum industry, government legislation and perhaps the most important issue of them all, namely oil pricing.
Shale Intel 