Maddy Hayden

Carlsbad Current-Argus

A grassroots organization made up of oil producers in the western United States is calling for a quota on overseas foreign oil imports.

The Panhandle Import Reduction Initiative, led by industry leaders including John Yates Jr., claims that Saudi Arabia and other Organization of Petroleum Exporting Countries members are flooding the market in order to re-establish the United States' dependence on foreign oil.

“They’re trying to drive competitors out of business so they can command most of the business,” Yates said. “Saudi Arabia is the main culprit.”

Daniel Fine, associate director of the New Mexico Center for Energy Policy at New Mexico Tech and project leader of energy policy in the New Mexico State Department of Energy Minerals and Natural Resources, researched and wrote a proposal for the initiative.

Fine said the United States was on a path toward independence from foreign oil until 2014, when an oil glut began.

A year ago, Fine said the U.S. was producing 9.7 million barrels a day and importing 7.7 million. Today, the U.S. is producing 8 million barrels a day and importing 8.47 million.

Saudi Arabia produced a record-high 10.67 million barrels of oil a day in July 2016.

Fine and the initiative's supporters hope to ask the next U.S. president to reinstate quotas on the amount of oil imported by the country originally put into place by President Dwight Eisenhower in 1959.

Those quotas were done away with in the mid-1970s.

"For 14 years, we increased domestic production 35 percent and new investment came back to the states. We were on a road toward independence from foreign oil," Fine said. "It worked and it can work again."

Opposing views

In May, several Texas and New Mexico organizations penned a letter declaring opposition to the initiative.

"We think just sticking to the principles of free trade is the best way to go on this," said Wally Drangmeister, vice president of the New Mexico Oil and Gas Association.

Along with Drangmeister's organization, the letter was signed by the Texas Oil and Gas Association, the South Texas Energy and Economic Roundtable, the Texas Independent Producers and Royalty Owners Association and the Permian Basin Petroleum Association.

"...after careful consideration we must inform you we are opposed to this concept because it violates our principles of promoting free trade and would certainly lead to unidentified and unmanageable unintended consequences," the letter said. "We certainly acknowledge OPEC's actions have been detrimental to our producers and strongly encourage the federal government to aggressively explore targeted remedies, including relief from misguided federal bureaucratic policies."

Drangmeister said in light of the recent lift on the exportation of U.S. oil, which his organization supported, to decide to end imports just wouldn't make sense.

"We think it's inconsistent and bad policy to turn around and say, now that we can export, we should stop imports," Drangmeister said.

The initiative is hosting a free rally for the industry and members of the public from 11:30 a.m. to 2 p.m. Sept. 27 at the Pecos River Village Center in Carlsbad.

Fine, Yates Jr. and other industry experts are expected to speak during the event.

Maddy Hayden can be reached at 575-628-5512.