Would $7 per gal effect your RV lifestyle?

thomasmnile wrote:
What Reisender posts is right on the mark. When WTI prices fell below $50 a barrel, the endless prattle on financial media revolved around producers in the Bakken region of North Dakota and Permian Basin in Texas faced with the decision to continuing to sell for less than production cost and risk bankruptcy, or leave their oil in the ground and risk bankruptcy. Mostly "independent" producers, but lot of crude nonetheless.

we have some old wells still producing in the bakken field, when oil is below about $50/barrel we get about $25/quarter. when oil prices are up, we get about $100/month. Bakken field is expensive to pump from,
1) LOTS of salt water to get rid of
2) Limited/no pipeline to transport in, so it's usually rail
3) limited refineries that can handle the low sulfur light crude, a few in MT, and ND but not the ones in Texas processing high sulfur heavy crude from Saudi etc.
4) Fracked wells output drops like a rock after a few months, if you can't get your investment back in a few years, your dead, while conventional wells in that area have been producing for 60 years or more and high constant output for a few decades.
5) they have to drill about 10,000ft down then up to a mile out laterally in all four directions, pretty spendy
6) there is limited ability to capture the NG from the wells, again limited pipelines.

so, the bakken is a good field for oil, but only at when oil prices are high enough to recover the investment. And since the wells output drops fast, they have to keep drilling just to keep the total output flat.

In the past the Bakken field producers helped create their own downfall, when volume increased, prices decreased and the had a "make it up on volume" which drove prices down more, and endless death spriral. And I suspect that most of them are afraid that if prices rise way up, to many will drill, prices drop, back to the same old low profit problem.