"shale oil will not be more expensive to produce the middle east crude....for christ sake the canadians have proved that"
I don't believe that statement show a high level of understanding of either the economics or technology involved.
My understanding is that US shale oil costs between $40 and $80 per barrel to produce. Much of the middle east oil costs less than $10 per barrel. This is why Saudi Arabia wants the price to come down to something lower than the US production costs - to squeeze the US producers out of the market. Over time the technology of shale oil may improve but I don't believe the cost of production will match the middle east any time soon.
The comment on Canadians is a furphy. The Canadian oil sands production is totally different from US shale oil. Oil sands are huge open cut mines - low cost to collect the oil sands but high cost to separate the oil from the sand. Shale oil are hundred of holes drilled into shale layers using specialist techniques to direct the drill and break up the shale to release the oil. Totally and completely different technology and economics. Oil sands and shale oil production cannot be compared.
"little known fact is that we are using the ports we once used to import and service oiltankers now for the export of oil in the gulf (of mexico)"
Important point. However, this will only continue while the price of oil is high enough to allow US shale production to continue.
I don't believe your comment is correct, or it requires further qualification.
The question of whether shale oil is "profitable" depends on the price of oil, the specific geology and the producer's expertise. It also depends on whether there are sunk costs or if it is a new venture. However, my understanding is that US shale oil is generally profitable when oil is more than $80 per barrel, and unprofitable when less than $40 per barrel.
I don't understand your comment about using other people's money. The whole western capitalist system is based on using other people's money - either through equity or loans. I see no reason that the use of these financing resources makes them losers.
Traditional oil is found where porous rock (say sandstone) is overlain by non-porous rocks, in say a dome shaped rock formation, although faulting may also create an oil "trap". The oil sits in the porous rock. To extract this traditional oil all you need is to find it and drill down to it it will flow easily.
I assume you know the black and tightly banded rock called shale. In shale oil the oil is bound in the non-porous shale - so shale oil is also called "tight" oil, as extracting it takes more than just drilling to the right spot, you need lots of drill holes and break up the shale to allow the oil to flow. This is similar to what happens in extracting coal seam gas. These drill holes need to be curved in exactly the right way and a lot of new technology is involved.
It has only been recently that the right combination of a high oil price and the available technology have occurred together.
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Guess What Happened The Last Time The Price Of Oil Crashed Like This
"shale oil will not be more expensive to produce the middle east crude....for christ sake the canadians have proved that"
I don't believe that statement show a high level of understanding of either the economics or technology involved.
My understanding is that US shale oil costs between $40 and $80 per barrel to produce. Much of the middle east oil costs less than $10 per barrel. This is why Saudi Arabia wants the price to come down to something lower than the US production costs - to squeeze the US producers out of the market. Over time the technology of shale oil may improve but I don't believe the cost of production will match the middle east any time soon.
The comment on Canadians is a furphy. The Canadian oil sands production is totally different from US shale oil. Oil sands are huge open cut mines - low cost to collect the oil sands but high cost to separate the oil from the sand. Shale oil are hundred of holes drilled into shale layers using specialist techniques to direct the drill and break up the shale to release the oil. Totally and completely different technology and economics. Oil sands and shale oil production cannot be compared.
"little known fact is that we are using the ports we once used to import and service oiltankers now for the export of oil in the gulf (of mexico)"
Important point. However, this will only continue while the price of oil is high enough to allow US shale production to continue.
Guess What Happened The Last Time The Price Of Oil Crashed Like This
I don't believe your comment is correct, or it requires further qualification.
The question of whether shale oil is "profitable" depends on the price of oil, the specific geology and the producer's expertise. It also depends on whether there are sunk costs or if it is a new venture. However, my understanding is that US shale oil is generally profitable when oil is more than $80 per barrel, and unprofitable when less than $40 per barrel.
I don't understand your comment about using other people's money. The whole western capitalist system is based on using other people's money - either through equity or loans. I see no reason that the use of these financing resources makes them losers.
Guess What Happened The Last Time The Price Of Oil Crashed Like This
Traditional oil is found where porous rock (say sandstone) is overlain by non-porous rocks, in say a dome shaped rock formation, although faulting may also create an oil "trap". The oil sits in the porous rock. To extract this traditional oil all you need is to find it and drill down to it it will flow easily.
I assume you know the black and tightly banded rock called shale. In shale oil the oil is bound in the non-porous shale - so shale oil is also called "tight" oil, as extracting it takes more than just drilling to the right spot, you need lots of drill holes and break up the shale to allow the oil to flow. This is similar to what happens in extracting coal seam gas. These drill holes need to be curved in exactly the right way and a lot of new technology is involved.
It has only been recently that the right combination of a high oil price and the available technology have occurred together.