Re: Unlimited Oil? Yeah right..
- --- In carfree_cities@y..., "dubluth" <dubluth@y...> wrote:
> You stated that it currently costs a dollars worth of energy tomust
> extract a dollars worth of oil. For that to be correct, someone
> be giving the oil companies the energy because they would elect notBill,
> to produce if their costs exceed revenues under current prices.
I was referring to the current costs of extracting oil from oil
shale, which involves the additional cost of mining and extracting
the oil from the shale. This additional costs roughly translates
into $1 spent on extraction to recover $1 worth of oil at today's
prices - not exactly a bargain. The extraction process isn't
particularly environmentally friendly either as it makes drilling for
oil in ANWR look benign by comparsion.
Earlier I wrongly stated that the price of gas would triple in the
United States if the price of oil rose to $40 a barrel. I didn't
factor in the static costs such as refining, distribution, and taxes
which explains the error. Incidentally, The last time we had
sustained prices of around $40 a barrel in the U.S. was during the
severe recession of the early 80s after the whole Iranian fiasco. The
price of gas back then, adjusted for inflation, was around $2.50 a
gallon or about twice what we pay today. Hardly insignificant if you
remember the double digit inflation and interest rates of the era.