Big Oil Cutting Back on Exploration

Before oil can be produced and refined into gasoline it has to be discovered. Without maintaining a pace of discoveries at least equal to the pace of production, obviously the total amount of oil available as reserves will decline. For anyone thinking about how much oil and gasoline might cost a decade from now, knowing how much effort is being put into discovery today is very important. Bad news I am afraid. Big Oil has recently begun investing their profits into mergers, stock buybacks and dividend payouts instead of exploration. Of course playing financial games will not discover even a single drop of oil.

The fact that Big Oil is cutting back exploration budgets means that we can expect fewer discoveries in the years ahead. The reasons for the exploration budget cutbacks are of course known only the the corporate bosses of Big Oil. But it seems increasingly obvious that one contributing factor is that all of the best oil has been found. What is left will be hard to discover and hard to produce. So instead of doing that honest hard work, Big Oil prefers to try for easy money in the world's financial casinos.

The US cannot count on big oil in the future. It is up to us to save on gas!