Fuel Prices
Withe crash in oil prices has the price dropped or is pemex still hiking it regularly? If so it must be more expensive than Arizona by now.
Forum Discussion
A few years ago we were roaming around ND and came upon the Bakken oil "boom" near Williston. We had no idea. So did a bunch of Googling and research to learn what was going on and why etc.
http://en.wikipedia.org/wiki/Bakken_formation
They have known there was a lot of oil down there for a long time. But the oil is trapped in the shale and is very deep. To get it they have to drill down a couple miles and then turn the drill horizontally and drill further under the shale. They then have to heat to sort of "melt" the oil out of the shale. With the depth and technological difficulty there has been no cost effective way to get this oil until recently. Books could be written so I doubt it can all be covered here - or in a way a normal person can comprehend it all. Basically it is pretty obvious that this is not cheap oil as it costs a lot to get it out - just like drilling platforms offshore cost a lot and have to go deep. All of the shale oil and fracking is going on in other areas of the US - Texas and Oklahoma. So oil production in the US is the highest it has ever been - making the US not only the largest consumers of oil but the largest producers. But Saudi oil is still cheaper to get out of the ground if they decide to lower their price. If the world market price goes lower the more expensive extraction methods will no longer be cost effective.
There are a couple of numbers we hear when the talk about how much oil is down there - well more than a couple but it gets more complicated. They have an idea how much is down there and then how much of what is down there is "recoverable" with current technology. So we may hear there is a lot of oil but that does not mean we can get it. A lot of oil is coming out of the ground in the US these days. But the other thing we hear is how long the known oil in the world can last. No matter how many billions of barrels are down there the fact remains the no new oil will ever be produced - what currently exists down there is all there will be. What is down there is what is down there and there will be no more. New technology may increase what is recoverable but the new technology will probably mean high costs of extraction. The harder it is to get the oil the more it will cost per barrel. If the price per barrel goes too low on the world market the "boom" in the US could end because the cost of getting the oil is higher than the barrel price.
We have seen both Schlumberger and Haliburton trucks in Mexico - years ago. There is oil in Mexico that Pemex does not have the technology to get to. That is why they are going to let outside oil companies come in to use their technology to go after the oil. But this will not be cheap oil. The days of seeing crude bubbling up out of the ground are over - they have gotten all of that oil. Now they have to go deeper and deeper which means it will cost more and more.
Lots of other factors and formulas - and there are still areas where oil can be extracted for less money - middle east of course - if they want to sell it for less they can. But once they sell all of their oil they will have nothing else of much value. They know it does not make sense for them to lower prices and increase production.
Most of this is old news........
http://money.cnn.com/2008/05/01/news/international/usgas_price
http://www.entrepreneur.com/article/206326
http://www.ibtimes.com/gas-prices-pump-europeans-pay-almost-twice-much-us-residents-1322727
http://usatoday30.usatoday.com/money/industries/energy/story/2012-04-21/global-factors-gasoline-prices/54421804/1
I am sure some forum readers know all about this - and more - but there are some out there who may not.
One thing to keep in mind - no matter how much oil is down in the ground in the US the more of it is pumped out today will mean the sooner it is all gone. Please do not turn this into politics - but I think we should use up the oil from other world sources before we use up all there is in the US. Let's not be the first to run out.
http://en.wikipedia.org/wiki/Bakken_formation
They have known there was a lot of oil down there for a long time. But the oil is trapped in the shale and is very deep. To get it they have to drill down a couple miles and then turn the drill horizontally and drill further under the shale. They then have to heat to sort of "melt" the oil out of the shale. With the depth and technological difficulty there has been no cost effective way to get this oil until recently. Books could be written so I doubt it can all be covered here - or in a way a normal person can comprehend it all. Basically it is pretty obvious that this is not cheap oil as it costs a lot to get it out - just like drilling platforms offshore cost a lot and have to go deep. All of the shale oil and fracking is going on in other areas of the US - Texas and Oklahoma. So oil production in the US is the highest it has ever been - making the US not only the largest consumers of oil but the largest producers. But Saudi oil is still cheaper to get out of the ground if they decide to lower their price. If the world market price goes lower the more expensive extraction methods will no longer be cost effective.
There are a couple of numbers we hear when the talk about how much oil is down there - well more than a couple but it gets more complicated. They have an idea how much is down there and then how much of what is down there is "recoverable" with current technology. So we may hear there is a lot of oil but that does not mean we can get it. A lot of oil is coming out of the ground in the US these days. But the other thing we hear is how long the known oil in the world can last. No matter how many billions of barrels are down there the fact remains the no new oil will ever be produced - what currently exists down there is all there will be. What is down there is what is down there and there will be no more. New technology may increase what is recoverable but the new technology will probably mean high costs of extraction. The harder it is to get the oil the more it will cost per barrel. If the price per barrel goes too low on the world market the "boom" in the US could end because the cost of getting the oil is higher than the barrel price.
We have seen both Schlumberger and Haliburton trucks in Mexico - years ago. There is oil in Mexico that Pemex does not have the technology to get to. That is why they are going to let outside oil companies come in to use their technology to go after the oil. But this will not be cheap oil. The days of seeing crude bubbling up out of the ground are over - they have gotten all of that oil. Now they have to go deeper and deeper which means it will cost more and more.
Lots of other factors and formulas - and there are still areas where oil can be extracted for less money - middle east of course - if they want to sell it for less they can. But once they sell all of their oil they will have nothing else of much value. They know it does not make sense for them to lower prices and increase production.
Most of this is old news........
http://money.cnn.com/2008/05/01/news/international/usgas_price
http://www.entrepreneur.com/article/206326
http://www.ibtimes.com/gas-prices-pump-europeans-pay-almost-twice-much-us-residents-1322727
http://usatoday30.usatoday.com/money/industries/energy/story/2012-04-21/global-factors-gasoline-prices/54421804/1
I am sure some forum readers know all about this - and more - but there are some out there who may not.
One thing to keep in mind - no matter how much oil is down in the ground in the US the more of it is pumped out today will mean the sooner it is all gone. Please do not turn this into politics - but I think we should use up the oil from other world sources before we use up all there is in the US. Let's not be the first to run out.
