Skashion
Well-Known Member
I'm sure Sheikh Mansour is shitting himself.
metalblue said:Mikecini said:metalblue said: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.
Skashion said:I'm sure Sheikh Mansour is shitting himself.
Mikecini said:metalblue said:Mikecini said: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.
Thanks for the reply.
My confusion appears to come from the term ''shale oil'' and my lack of understanding that apparently shale oil can be drilled for or fracked. I had thought that the only way to extract oil from shale was by digging it out and then processing it but that appears to be shale sand.
From the article.
''The US is the home to vast shale oil and gas deposits made commercially viable by improvements to a 200-year-old technique called fracking and by the relentlessly high cost of crude.
Exploitation of fields in Appalachian states such as West Virginia and Pennsylvania, and further west in North Dakota, have transformed the US's energy outlook pretty much overnight. Professor Dieter Helm, an energy expert at Oxford University, said: "In the US, shale gas didn't exist in 2004. Now it represents 30% of the market."
The author changes terminology from energy, to shale oil, to shale gas, which also didn't help.
Cheers
Shashank Joshi, a fellow of the Royal United Services Institute, said: "The Gulf Arab political order for almost the entire post-war period has depended on US interest in the region.
"The monarchies endured for so long not because of any sort of popular legitimacy but because they could depend on enormous external support. Those regimes, which have already had to deal with a high degree of domestic mobilisation will come under unbearable stress and they cannot survive without the technical advantage of western weapons."