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Great. When oil hits $400 a barrel, we'll be the Petroleum Kings. But unless you fancy the idea of paying $15 a gallon for gas, just be glad that right now there are still parts of the world where all you have to do is pound a pipe into the ground and hang a bucket from it. When the only oil that's left in the world is the oil that we're sitting on top of, nobody's going to be able to afford to drive.
Typical oversimplified scare-tactics. The point here should be that as oil prices rise, other options become more attractive. This is how the workings of the markets determine how resources are allocated, without any "help" from Big Brother/Sister.
But there's not much excitement (or sales potential) in business as usual.
Great. When oil hits $400 a barrel, we'll be the Petroleum Kings. But unless you fancy the idea of paying $15 a gallon for gas, just be glad that right now there are still parts of the world where all you have to do is pound a pipe into the ground and hang a bucket from it. When the only oil that's left in the world is the oil that we're sitting on top of, nobody's going to be able to afford to drive.
Actually they were turning nice profits when the price was a fraction of $400.
I'm talking about alternatives in a wider sense, such as the use of forms of transportation other than the private automobile -- not to mention energy efficiency with regard to, for example, the movement of freight. But a media culture overly attuned to the concerns of the stereotypical suburban Soccer-Mom isn't too interested in discussing the wider picture.
"The data were published July 4 by Rystad Energy and include proved and probable reserves, discoveries and undiscovered fields."
"Discoveries are new fields that haven't yet been sized and undiscovered fields are places where nothing has been found yet but where recoverable amounts are likely to exist."
Uh....okay? How'd they work out these numbers?
The CIA doesn't have close to the same numbers for the US, Russia, of SA.
Actually they were turning nice profits when the price was a fraction of $400.
You're right, Finn, and I'm somewhat exaggerating to make a point. The point I'm making is that having it is one thing; being able to afford to drill it is another.
Right now, oil is trading in the low 40s, I believe. Average extraction costs for American crude are in the mid- to high 30s, if I recall correctly (I'm going mostly by memory here), and Saudi, Kuwait, Bahrain, UAE, and Iran are pumping it for 10 bucks or less. So the Arabs are still getting filthy rich, and the oil that US producers are extracting now is still cheap enough to make a profit when it's trading in the 40s.
But when we run out of the oil that's easy to get at, the production costs begin to rise. And when the production costs rise, so does the price of the product. I believe that much if not most American oil shale can be worked for somewhere in the mid-60s, which - as you point out - is a lot less than 400, but the point is, most of our oil reserves can not be extracted unless oil prices go up by a considerable amount. And while I don't recall the exact percentages, I do know that there are some American reserves that would cost between $300 and $400 a barrel to extract.
So my point is, while it's true that we have a lot of oil here, it's also true that we can't even afford a lot of our own oil at this time. And by the time we can afford it - by the time it does become profitable to produce oil that costs hundreds of dollars per barrel to extra - we're screwed. Because our entire economy is in the tank by that point.
Last edited by Mr. In-Between; 07-05-2016 at 05:51 PM..
I'm talking about alternatives in a wider sense, such as the use of forms of transportation other than the private automobile -- not to mention energy efficiency with regard to, for example, the movement of freight. But a media culture overly attuned to the concerns of the stereotypical suburban Soccer-Mom isn't too interested in discussing the wider picture.
OK, sure. But when and how is that going to happen? Is it technologically feasible? Yeah, probably. But is it economically feasible? I would suggest that it's not, or we would already be doing it.
We will change the way we use oil only when we have absolutely no choice left, because people simply do not want to make the major changes that they must make in order to move away from oil. People will not stop driving Hummers to the grocery store until they literally can no longer afford to buy the gas, and by the time it gets to that point, the easy oil will be long gone.
You're right, Finn, and I'm somewhat exaggerating to make a point. The point I'm making is that having it is one thing; being able to afford to drill it is another.
Right now, oil is trading in the low 40s, I believe. Average extraction costs for American crude are in the mid- to high 30s, if I recall correctly (I'm going mostly by memory here), and Saudi, Kuwait, Bahrain, UAE, and Iran are pumping it for 10 bucks or less. So the Arabs are still getting filthy rich, and the oil that US producers are extracting now is still cheap enough to make a profit when it's trading in the 40s.
But when we run out of the oil that's easy to get at, the production costs begin to rise. And when the production costs rise, so does the price of the product. I believe that much if not most American oil shale can be worked for somewhere in the mid-60s, which - as you point out - is a lot less than 400, but the point is, most of our oil reserves can not be extracted unless oil prices go up by a considerable amount. And while I don't recall the exact percentages, I do know that there are some American reserves that would cost between $300 and $400 a barrel to extract.
So my point is, while it's true that we have a lot of oil here, it's also true that we can't even afford a lot of our own oil at this time. And by the time we can afford it - by the time it does become profitable to produce oil that costs hundreds of dollars per barrel to extra - we're screwed. Because our entire economy is in the tank by that point.
It is trading low, because the Saudis launched a price war to make US drilling unprofitable. This is why I said what I said in the OP. A lot of the US oil is already being extracted from the shale, and it does not cost as much as you suggest. Also, the price of extraction will go down as they invent new methods of getting it out.
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