[Recon Dad]

Elect Bernie Sanders and control price controls...1 year later you have a toilet paper shortage...

[Obadiah]

Proving - yet again - that Liberals are wrong nearly 100% of the time, and that the mantra of Conservatives to “drill, baby, drill” has proven dead on. Perhaps some will even recall the derision by the left of the call to drill.

[econjack]

What really pisses me off about politicians is comments you read about the “obscene profits” made by the oil companies. They give no quarter to the work and risk involved in bringing oil to market, but their average return of 9% on gross distillate fuel sales is “obscene”.

Really?

If that’s the case, then why is the average average federal and state taxes of 47.99 cents/gallon less obscene? (http://www.api.org/oil-and-natural-gas-overview/industry-economics/fuel-taxes/gasoline-tax) At an average price of $2/gallon, that works out to almost a 24% return to the gov’t, but I don’t hear anyone bitching about their “obscene” taxes.

[redgolum]

The same place many of the farm land speculators went.

Bankruptcy court.

[norwaypinesavage]

It costs a million bucks, or so, to sink a vertical well. When the fuel producing layer is only a few feet thick such as in the Bakken and Eagle Ford, the odds of finding a producing well are quite low. Add a couple of million do drive a horizontal well in the layer, and the odds go up quite considerably. Add another couple million to 'frack' it, and you've likely got a winner - That is if you can sell the fuel for a decent price.

Thirty bucks a barrel is not a decent price. Nevertheless, if you have the well, you can either sell the fuel, or wait for a better price.

More importantly, though, this also puts an upper ceiling on price. When the price gets high enough, there can be a whole lot of people out there willing to drill the wells. It won't stay at $30 for long.