The chief economist for the American Petroleum Institute is trying to change people's perception of the industry.

John Felmy said a recent industry survey of 1,500 people showed that some public impressions aren't correct -- such as where our country's oil comes from -- so the institute is embarking on an educational program.

"We learned after (hurricanes) Katrina and Rita that people don't know much about the oil industry," Felmy told the Independent Record's editorial board on Wednesday. "We as an industry have done a bad job in the last 150 years in educating people, and we are an important part of their lives.

"Having (television characters) J.R. Ewing as a spokesperson is not really good, nor is Jed Clampett for that matter."

So Felmy is on the road, helping distribute a 33-double-paged "primer" on "The Truth About Oil and Gasoline," as part of the education effort.

Felmy notes that economists like to base market changes on supply and demand, but he said the oil industry is much more complicated. Factors like hurricanes, the war in Iraq and decisions by OPEC all figure into the mix.

He added that even if the United States continues to lower its consumption of refined products from oil, like gasoline, that won't make much difference in demand in what's become a worldwide market.

"Even with the U.S. demand down, that's more than offset by China, India and the Middle East," Felmy said.

And with Mexico's oil production waning, plus some experts predicting that peak oil production worldwide already has occurred, the specter of worldwide shortages continues to keep oil prices high, Felmy added.

Still, in Felmy's perspective, while the price of a barrel of oil skyrocketed this year from around $100 to $145 a barrel, it's also decreased dramatically since mid July to around $110 a barrel this week.

That's translated to average gasoline prices nationwide dropping by 43 cents per gallon since mid July.

"There's a perception that prices go up quickly and are slow to come down. That's not true now," Felmy said.

He declined to speculate as to whether gas and oil prices will continue to decline, stabilize or increase in the near future, noting that he's prohibited from doing so by law.

One place where oil production may increase is to the north, as Canada works on developing technology to better mine the oil sands in Alberta. Experts estimate that the 170 billion barrels of oil in the sands recoverable through today's technology makes that country second only to Saudi Arabia in terms of supply.

"That's a very bright spot, but that's not like hitting a giant gusher," Felmy said.

Felmy will speak today as part of a panel discussion on oil prices, oil production in Montana, oil taxation, and the impact higher oil prices may have on the Montana economy. The discussion begins at 9 a.m. in room 172 of the State Capitol building.

Other speakers include Tom Richmond, administrator, Montana Board of Oil and Gas Conservation; Beth Claude, manager, state and government affairs, Enbridge Pipelines, Inc.; Terry Johnson, principal fiscal analyst for the state Legislative Fiscal Division; Eric Dale, associate revenue analyst for the governor's Office of Budget and Program Planning; Bob Decker, executive director for The Policy Institute; Scott Rickard, director of the Center for Applied Economic Research, Montana State University-Billings; and Pat Barkey, director of the Bureau of Business and Economic Research at University of Montana-Missoula.

Reporter Eve Byron: 447-4076 or eve.byron@helenair.com