BIG Companies

1. While much time, effort, and money has been allocated towards the exploration of alternative energy, petroleum remains our society's primary source of fuel and power. Oil and natural gas combined fuel 57% of all of the World's Energy.

2. Alternative energy sources are not positioned to replace fossil fuel demand any time in the near future. 2010 worldwide hybrid car sales made up only 2.2% of the total market. Combined hybrid and electric are projected to reach only 7.7% of total market share by 2020.

3. The United States is third in the world in oil production, and is one of only a few countries in which an individual can lease or own rights to oil and gas production.

4. Oil demand exceeds supply: The IEA states that peak oil, the point in time when the maximum rate of global petroleum extraction is reached, has already occurred. Meanwhile, between 1995-2009, world crude oil demand grew 21%. By 2030, it is projected to have increased another 21% from 2007 levels. Rise in price is inevitable.

5. Natural Gas is the cleanest and most efficient fossil fuel available. Total worldwide consumption is predicted to rise as much as 50% by 2035, making it the second most popular energy source behind oil.

6. China's economy is growing at unparalleled rate, and has an insatiable thirst for commodities, especially oil and natural gas.

Per capita oil consumption doubled from 2001 to 2009. The country has 1.3 billion people.
2008-2010: auto sales in China grew 89%
Natural Gas Consumption in China rose 20% in 2010, and is projected to rise another 20% in 2011

7. The 1990s also saw technological breakthroughs in the use of horizontal drilling techniques. Horizontal drilling in areas such as the Austin Chalk and Pecan Gap in Texas, has boosted the production rates of wells, making them more economical to drill, and providing a faster return on investment.

8. The reserves of the OPEC countries are overstated. Quotas for the members are determined by production capacity, and production capacity is directly related to reserves. In 1988 for example, Iraq announced that their reserves had more than doubled to 100 billion barrels. A miraculous feat despite continued production and the total absence of exploration. The Saudis, Iraq, and Iran have all engaged in overstating reserves.

9. The 1986 Tax Code specifically states that a working interest in an oil and gas well is NOT a "Passive" Activity, therefore, tax deductions CAN be offset against active income.

10. The oil and gas industry generates almost $100 million a day to the US Government (taxes, royalties etc.)