Re: Oil at $40 a barrel...

On Mon, 12 Jun 2006 10:09:55 -0400, "John Gilmer" <gilmer@xxxxxxxxxxxxx>

typed:

are "oil sands" and "oil shales">

and they are nowhere near viable in terms of current prices or production
levels...let alone environmental impact

That's no longer quite true (as far as economics is concerned.)

if you choose to ignore externalised costs....
if you ignore the small scale of the useful extraction

I
understand that is an on-going full scale operation somewhere in Canada.

look up the company 'suncor'

It was expensive to set up and easily go from making money to losing money
if the price of crude drops.

true...

Like a lot of business operations, the costs
seem to expand when prices go up.

depends on the business....
eg in the energy business the low fruit is picked first....or perhaps
increasing prices encourage further investment...

government subsidy strongly distorts parts of these markets.

Some of these costs are from extra
demands by the workers or the governments. The result is that private
investors can never make a killing and end up in a "Heads, I win, Tails, you
lose" situation.

i don't follow what you are trying to say or why you are saying it...

If private interests could keep the costs fixed then a "break even"
operation at $40 oil would be a fantastic money maker at $70.

if...

Bankers will
often force private operators to sell future production in advance (via the
futures markets) so that the money to pay off loans will certainly be there.

The selling of future production is keep bankers happy is one reason why the
stock of Gold and Silver mines doesn't take off: unless the miners can
increase production, all their output has been sold in advance at lower
prices.

i don't understand what you are trying to claim here....nor why you have
raised it as any sort of issue.

The "environmental" impact on the same order as coal strip mines in the US.

while the damage in coal mining is considerable....i doubt that claim....
http://www.abelard.org/briefings/energy-economics.asp

The "waste" from the actually process might eventually have some use as
"select fill". The VERY heavy crude tends to have more carbon per BTU than
light oils and this might concern the anti-global warming crowd. The scale
of operation is just short of fantastic!

it is small atm compared with the scale required to extract serious energy

regards....

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