What I thought was obvious was the cost of extraction remains the same, dependent on new tech lowering the cost further.What influences mkt price the most is the unknowns of Federal restrictions, be it drilling permits, EPA restrictions or shuttering a refinery, these are the cost that is virtually impossible to predict and why a lot of price fluctuations occurred in the past.Of course, fracking has put a huge damper in all of that, and why?Because most fracking has been confined to private land. The one thing that drives the Fed nuts and why America has become the leader in Ng export and why the price of oil is as low as it is.But I did start a thread in Finance to avoid further derailing this thread.
No, I was merely setting the record straight. This forum is about facts, not "Feelings".I retired as an expert in the field of alternative energies, and the above statement made absolutely no sense whatsoever, just a bunch of rambling opinion of yesteryear.The problem with the cost of energy has little to do with recovery cost, and nearly everything to do with govt interference in the free mkt.Not all, but a huge portion is redtape."What I thought was obvious was the cost of extraction remains the same""I did start a thread in Finance"
Really, just facts? Then where are yours?
We have more oil now in the world than any time in the past and new fields are still being found the world over.Were I KING: We know oil is finite, most of my contacts feel IF the govt gets out of the way we have ample supplies for the world for 75-100 years based upon current tech and known potential.
'Expert in alternative energy'...that sez it all IMO! I think, SOLAR a set of Ray Bans will fix that for ya.
Cost of extraction remains the same? While I fully agree the Feds are a huge burden on all businesses and in fact add to its market price, but this capitalist can assure you the cost of goods sold is extremely variable, there is nothing fixed. The oil business is global and chasing shale in Karnes County vs the Permian Basin vs Off Shore in the Gulf of Mexico or the North Sea or the sands of Saudi Arabian varies extremely from well to well, pool to field and everwhere in between. As stated the Mexicans can't drill below 9000 ft due lack of tech, exploration and tools. My X was a Petro Engineer, she was 3rd generation and mom and dad were both Petro Eng both practicing with their family company and Professors at one of the top schools in Petro engineering in the world.
You created a thread...don't wait on me sunshine
I answer for you. "How much has the cost of extraction varied in the last 5 years in the US?" Negligible in the big picture.
I think we are talking about different types of variance. You are talking about changes in cost of total production over time. I am talking about variances in the cost of production due to factors such as depth, type of trap, dry or offshore, etc. Heck, the price of production can vary between drill rigs on different ends of the same field. My point being the more expensive types of extraction are vulnerable to falling prices. There are already fields being capped and put on hold due to falling prices.The good news is those fields are known, surveyed, and in some cases already drilled. Should the price of oil rise, or the cost of production decrease (deregulation, anyone?) they could be back online with a minimum of additional investment.
Yes, I was using a broad approach, because God knows it's easy to sit down in accountant mode and go nuts, from processing to transportation.Yeah, I was only referring to tapping a hole to extraction, that cost only varies in depth without getting into minutiae like weather, the age of rig etc.My entire point is, Govt is usually the biggest mitigating factor in price, and getting rid of the EPA as DOE would go a long way in stabilizing the price of oil.
I agree that .gov intervention plays a large role in oil price fluctuations. But there are other factors in play, to include the fact that our U.S. government is not the only regulatory governing body which targets oil prices for domestic advantage. Then there is that age-old economic force which plays its hand in both free markets and controlled markets: Demand. For instance U.S. crude oil use has been relatively steady for the past 16 years, and in fact has dropped slightly since 2014. When compared to the Annual Energy Outlook from 2003, the U.S. is using almost 30% less oil than predicted. (https://www.weforum.org/agenda/2015/07/the-surprising-decline-in-us-petroleum-consumption/) Of course, figures such as the AEO are both traditionally pessimistic (carrying forward the panic ridden cries of the mid-1970s doomsayers) as well as characteristically incapable of anticipating the influence of newer technologies.In the U.S. average fuel efficiency for passenger cars has increased a full 30% since 1990, while our "gas guzzling" SUVs and pick-em-up trucks have seen a 25% increase in fuel efficiency. (https://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/national_transportation_statistics/html/table_04_23.html) When talking about supply/demand, the increase in fuel efficiency alone would allow for a 25-30% increase in total light passenger vehicle miles traveled with zero increase in gasoline consumption. Then there are other aspects, such as the vast increase in the use of artificial lubricants, easing another load on our demand for crude oil. There are no tables for heavy truck fuel efficiency, since load factors cause way too much variance, but I would confidently estimate fuel efficiency on a per-ton of cargo basis has also risen significantly.I believe we are on the same page with respect to the doom-sayer's continual cries of eventually running out of crude oil. My opinion is newer technologies will both increase available sources and decrease demand until technology ends up moving us away from petroleum products entirely - all without the need for government to intervene on the behalf of non-petroleum technologies.In the meantime, we should also be aware of the affects fluctuating oil prices have on local economies, such as the Bakken oil field and surrounding communities. I gotta feel for towns like Williston and Watford City - from small town to boom town, to (partial) ghost town in less than 5 years.....Adjusted font address size.walks