Phil Zaccaria is a Petroleum Engineer, oil and gas producer, land developer and entrepreneur in San Antonio, Texas who is a regular contributor to energy news publications. In the article below, Phil Zaccaria discusses some of the pertinent questions many have related to today’s oil and gas industry, gas prices and real estate market in Texas.
Crude Oil
Many question why the USA went from “energy independent” to now importing crude oil and products and why has the gas prices have doubled in the last year. Zaccaria says, “The main thing to remember is that from 2015 through 2020 oil prices averaged $ 50.50/bbl. During this time most exploration companies were drilling new oil wells in what is called “unconventional shale oil” formations. These formations initially produce at higher daily oil/gas production rates then decline at as much as 80% the first year of production. If the Exploration companies don’t keep drilling then the overall oil production will decline severly. Many oil companies went bankrupt, out of business or were sold at bottom prices. The average American didn’t complain about the low gas prices at the pump but many oil companies and oilfield support and service companies went out of business.” Now with the combination of things such as: national policy changes, the Russian invasion of Ukraine and manpower shortages across all industries, the oil and gas industry is feeling the pain of higher drilling rig prices, equipment costs increases, steel pipe shortages, backordered parts and a limited number of available service companies to assist oil/gas producers.
Phil Zaccaria summarizes that, ”There doesn’t appear to be any near term solutions to oil prices but as we have seen in the past if prices stay high enough longer more drilling rigs and services companies will become available and therefore more oil will be produced and prices will begin to drop”.
Gasoline prices
As a former owner of over 140 gas stations in the USA, Zaccaria explains that the “prices at the pump” are a direct result of higher oil prices. Many gas station operators price their gas based on the average of the stores around them. There are a few instances in which the operator may take advantage of the market and increase prices much to the dismay of its customers. As with the oil prices mentioned above, gas prices will follow crude oil prices, so for now there is no near term solution.
Recently, the Biden administration wanted to release oil from our Strategic Reserve Oil supply. This reserve is intended for national emergencies like World War III. So to suggest that releasing 50 million bbls is going to help the USA which uses 20 million bbls per day is ridiculous.
Overall, the gas station operators have to stay the course and be patient.
As far as gas station operators are concerned, Zaccaria says that Texas Original Buc-ee’s is by far the leader in the industry in many categories. They are led by just two good ole Texas guys that have the drive to build the biggest, most product diverse as well as the safest gas stations in the world. Who in their right mind would build a 35,000 sf store with over 120 gas pumps, Buc-ee’s does and will continue. For a while, they have been a Texas secret but now they are bringing their great stores to other states like Colorado, Tennessee, Mississippi, Florida and others. Now we will begin to see Buc-ees t-shirts and hats all over the USA.
Texas Hill Country Real Estate
Texas, like Florida and Tennessee, is booming. Texas has what many US citizens are looking for a cheaper cost of living and a calmer way of life. Zaccaria, who is also a land developer in the Texas Hill country, says that we have our secret places in Texas and one is the “Texas Hill Country”. Our focus area is between Austin, San Antonio and Fredericksburg. People are moving here from other states as fast as they can. Prices have doubled in the last year but there is still plenty of space here in Texas.
America’s future?
Phil Zaccaria explains that in his view, “We need to remember that we are all American’s and need to realize that we are a great country and together we can handle all of the issues of today as long as we respect each other opinions and work together to solve them”.
