Published: November 20, 2008 03:19 pm      

Oil industry insight given at Farm-City Breakfast

When folks in the city and Cumberland Countians whose livelihood is farming sit down to their Thanksgiving meals and think about all their blessings, their minds might also be on one of the catalysts responsible for driving up the price of food production in America — oil.

J. Phil Wilbourn, adjunct professor at Tennessee Tech and retired as manager of the international offshore engineering department for Texaco, was guest speaker at the annual breakfast sponsored by the Cumberland County Farm Bureau.

Just two months ago when a gallon of gas topped the $4 mark, Wilbourn's timely topic would have been foremost on everyone's mind. With recent gas prices dipping to $1.80 or lower per gallon, the cost is not the number one topic of the day.

Not to worry, however, Wilbourn said those in the industry are simply waiting for the next cycle. Today we are enjoying "just one of those dips," Wilbourn said.

Wilbourn worked for 31 years for Texaco and traveled the world in job-related travels and now admits, "We took it for granted that everyone in the world understood the oil and gas business."

Now he knows otherwise. Wednesday's breakfast speech provided him an opportunity to share some facts and information with Cumberland Countians so they can better understand the issues that drive the fuel market that affects nearly every aspect of the American economy.

Class on Oil 101 starts with understanding how the business operates. Two main entities — IOCs or Integrated Oil Companies (Shell, Mobil, Marathon) and NOCs (Saudi Arabia, Iraq, Kuwait), are vying for the same oil market.

Worldwide, the NOCs own 80 percent of the oil reserves, IOCs six percent and Russia six percent.

Oil is dealt with and discussed in terms of barrels. Each barrel represents 42 gallons. The makeup of those 42 gallons pre-refinery is as follows: 19 gallons of gasoline; 10 gallons of diesel or heating fuel; four gallons is jet fuel; five gallons is used in plastics and chemicals; and two each for propane and heavy fuel.

The hotbed in this country for oil production is deep water drilling in the Gulf of Mexico off the coasts of Louisiana and Texas, where 72 percent of product harvested is oil and 38 percent is natural gas.

Wilbourn went on to discuss a variety of topics and then provided a generous amount of time for questions and answers.

One point of interest was the controversy over opening up a part of the Arctic National Wildlife Refuge (ANWR) for oil exploration and possible production.

"We are not even sure oil is here in ANWR," Wilbourn responded. He went on to say that the area being discussed would be comparable to a period at the end of a sentence on a newspaper page.

He said issues like this will continue to hold oil exploration in some areas at a standstill.

"The country lacks a long-term federal energy policy" that is based on science, economics and the environment.

Roger Thackston served as emcee for the event and Jack Chadwell, president of Highland Federal Savings and Loan, gave a devotional and invocation. Closing comments were provided by Cumberland County Farm Bureau President Al Wilson.

A brochure at each table noted that the average cost for a Thanksgiving dinner for ten is approximately $44.61, up over ten percent from last year.

In the 1960s, one farmer supplied 25.8 persons in the U.S. and abroad. Today, one farmer supplies food for 145 people.

Americans spend less than ten percent of their income on food, compared with 17 percent in Japan, 27 percent in South Africa and 53 percent in India.

It takes the average American only 34 days to earn enough disposable income to pay for his or her year food supply.

National Farm-City Week was established to "express gratitude for the bounty with which God has blessed our land and to recognize the achievements of the farmers, rural townspeople and city residents who make our nation's agricultural production and distribution system so successful," the brochure read.