‘Opec may cut output to defend $80 a barrel’

Financial Express ^ | 02/09/08

[USFRIENDINVICTORIA]

"If they keep the price where it is shale oil will be mined and permanent operations will be in place. They know it."

That's a very good point. The oil sands had a very high capital cost for development -- but, the ongoing costs are only a fraction of total costs. The capital costs are sunk costs -- they won't factor into any business decision about continuing operations. Even if the price of crude went below the average costs, production would continue as long as prices were above marginal costs -- which are under $25.00/bbl. I suspect that the same economics are involved with shale oil production. If shale were brought into production, the world price of oil would probably drop to well under $80.00/bbl.

[samm1148]

open ANWR
Good call and don’t forget off shore. But you’re preaching to the choir here brother. Write your rep, if he is a dem point out how high gas prices hurt the working class (almost sounds good enough to get me on Obama’s speech writing team. I guess it’s easy to spread ignorance).

Write a letter or two to the editor. The left knows the opinions of people on Free Republic. They don’t care. They ‘re scared to death when you publicize those views and force people to think.

Keep the sunny side up!