Could fracking change the world? Relevence to our owners?

[BoyBlue_1985]

I would much rather there were more investment in this: <a class="postlink" href="http://www.gazettelive.co.uk/business/business-news/2012/10/23/air-fuel-synthesis-reveal-why-they-chose-teesside-84229-32087641/" onclick="window.open(this.href);return false;">http://www.gazettelive.co.uk/business/b ... -32087641/</a>

yes but like everything else it will be purchased by a large oil company and put in research and development for the next 40 years so they can still sell oil

 

[Chris in London]

So do we think that if this came to anything the oil producing nations of the world (our owners included) would

(a) carry on charging $100 a barrel, or

(b) cut the price of oil to make it competitive?

Fracking hell, that's a tough one.

 

[metalblue]

So do we think that if this came to anything the oil producing nations of the world (our owners included) would

(a) carry on charging $100 a barrel, or

(b) cut the price of oil to make it competitive?

Fracking hell, that's a tough one.

Extraction of shale oil isn't cheap and it becomes (currently) theoretically economically viable at around $70 per barrel, we also need to factor in energy and infrastructure costs. There is no cheap oil left in the world so I'll go with a).

The "good" news is that now it's not only predominantly the middle east who will benefit from high oil prices but also places like South Africa and Argentina.

 

[BoyBlue_1985]

So do we think that if this came to anything the oil producing nations of the world (our owners included) would

(a) carry on charging $100 a barrel, or

(b) cut the price of oil to make it competitive?

Fracking hell, that's a tough one.

Extraction of shale oil isn't cheap and it becomes (currently) theoretically economically viable at around $70 per barrel, we also need to factor in energy and infrastructure costs. There is no cheap oil left in the world so I'll go with a).

The "good" news is that now it's not only predominantly the middle east who will benefit from high oil prices but also places like South Africa and Argentina.

And maybe us when we figure how to drill shale oil from the sea

 

[Chris in London]

So do we think that if this came to anything the oil producing nations of the world (our owners included) would

(a) carry on charging $100 a barrel, or

(b) cut the price of oil to make it competitive?

Fracking hell, that's a tough one.

Extraction of shale oil isn't cheap and it becomes (currently) theoretically economically viable at around $70 per barrel, we also need to factor in energy and infrastructure costs. There is no cheap oil left in the world so I'll go with a).

The "good" news is that now it's not only predominantly the middle east who will benefit from high oil prices but also places like South Africa and Argentina.

True, but it doesn't cost $70 just to get a barrel of oil out of the ground, that's the break even figure for the whole shebang. $70/barrel includes an awful lot of support services which are themselves essentially dependent on the oil economy - shipping and labour costs being two obvious examples.

If the market cannot support $100/barrel it won't just be the oil producers who take the hit.

 

[Mikeegrini]

So do we think that if this came to anything the oil producing nations of the world (our owners included) would

(a) carry on charging $100 a barrel, or

(b) cut the price of oil to make it competitive?

Fracking hell, that's a tough one.

Market forces would leave them with no option on price. Until that is it was so low (if it could go so low) as to make energy produced by fracking and/or the air fuel synthesis more expensive to produce.

The problem for the oil producing nations would be that once a new technology gets a foothold, something Boyblue alluded too, it's difficult to turn things around again.

Imagine though a world in which the USA which isn't spending a huge percentage of GDP on its military in the Middle East.

Who fills that void, what happens to Israel and will Nostradamus prediction of ''yellow men ruling the world'' be proven to be correct. China will be the new global force regardless but could this make it happen quicker?

 

[metalblue]

So do we think that if this came to anything the oil producing nations of the world (our owners included) would

(a) carry on charging $100 a barrel, or

(b) cut the price of oil to make it competitive?

Fracking hell, that's a tough one.

Extraction of shale oil isn't cheap and it becomes (currently) theoretically economically viable at around $70 per barrel, we also need to factor in energy and infrastructure costs. There is no cheap oil left in the world so I'll go with a).

The "good" news is that now it's not only predominantly the middle east who will benefit from high oil prices but also places like South Africa and Argentina.

True, but it doesn't cost $70 just to get a barrel of oil out of the ground, that's the break even figure for the whole shebang. $70/barrel includes an awful lot of support services which are themselves essentially dependent on the oil economy - shipping and labour costs being two obvious examples.

If the market cannot support $100/barrel it won't just be the oil producers who take the hit.

I didn't say $70 per barrel was simply the cost of getting out of the ground ...it's what is called the break even or gate cost of oil (this is all processes from extraction to refining). You then have some additional variables that can't be easily quantified generically, these are building the infrastructure to extract (the shale reserves could be sitting under a city for example making extration vastly more complex and thus expensive) and the ongoing fluctuations in energy costs.

In the absense of any alternative to oil good old fashion supply and demand dictates that the market will support whatever price the producers need.

 

[Mikeegrini]

Extraction of shale oil isn't cheap and it becomes (currently) theoretically economically viable at around $70 per barrel, we also need to factor in energy and infrastructure costs. There is no cheap oil left in the world so I'll go with a).

The "good" news is that now it's not only predominantly the middle east who will benefit from high oil prices but also places like South Africa and Argentina.

True, but it doesn't cost $70 just to get a barrel of oil out of the ground, that's the break even figure for the whole shebang. $70/barrel includes an awful lot of support services which are themselves essentially dependent on the oil economy - shipping and labour costs being two obvious examples.

If the market cannot support $100/barrel it won't just be the oil producers who take the hit.

I didn't say $70 per barrel was simply the cost of getting out of the ground ...it's what is called the break even or gate cost of oil (this is all processes from extraction to refining). You then have some additional variables that can't be easily quantified generically, these are building the infrastructure to extract (the shale reserves could be sitting under a city for example making extration vastly more complex and thus expensive) and the ongoing fluctuations in energy costs.

In the absense of any alternative to oil good old fashion supply and demand dictates that the market will support whatever price the producers need.

Isn't that the gist of the article though in the future there may well be an alternative?

You mention shale oil. I thought that was produced by open cast mining and the bigger costs are extraction of the oil from the shale and the returning of the environment to its original state?

That only remains viable while the cost of a barrel of oil are high.

Why are you using the cost of that as an example of the economies of oil and gas production from fracking?

No expert here I just looking understand?

 

[Chris in London]

[Isn't that the gist of the article though in the future there may well be an alternative?

You mention shale oil. I thought that was produced by open cast mining and the bigger costs are extraction of the oil from the shale and the returning of the environment to its original state?

That only remains viable while the cost of a barrel of oil are high.

Why are you using the cost of that as an example of the economies of oil and gas production from fracking?

No expert here I just looking understand?

I think all metalblue and I are discussing is that (a) oil producers won't give up without a fight, but (b) they may not have that much to fight with.

 

[metalblue]

True, but it doesn't cost $70 just to get a barrel of oil out of the ground, that's the break even figure for the whole shebang. $70/barrel includes an awful lot of support services which are themselves essentially dependent on the oil economy - shipping and labour costs being two obvious examples.

If the market cannot support $100/barrel it won't just be the oil producers who take the hit.

I didn't say $70 per barrel was simply the cost of getting out of the ground ...it's what is called the break even or gate cost of oil (this is all processes from extraction to refining). You then have some additional variables that can't be easily quantified generically, these are building the infrastructure to extract (the shale reserves could be sitting under a city for example making extration vastly more complex and thus expensive) and the ongoing fluctuations in energy costs.

In the absense of any alternative to oil good old fashion supply and demand dictates that the market will support whatever price the producers need.

Isn't that the gist of the article though in the future there may well be an alternative?

You mention shale oil. I thought that was produced by open cast mining and the bigger costs are extraction of the oil from the shale and the returning of the environment to its original state?

That only remains viable while the cost of a barrel of oil are high.

Why are you using the cost of that as an example of the economies of oil and gas production from fracking?

No expert here I just looking understand?

The article was about shale oil and the title of this thread included "relevence to our owners", the point I was making to Chris's question is that shale oil needs a high per barrel price to make it viable (for whatever reasons) as such this means that oil will not suddenly become "cheap" it will remain at a relatively high price thus the impact to our owners is muted...the standard of living for residents of the middle east isn't likely to suddenly change and bring with it revolution as a result of shale oil.

Will the US withdraw military from the region? Unlikely IMO they won't want the Russians or Chinese in there doing the policemans job on account of a distinct lack of trust of either of them on the part of the Americans.