Collapse the price of oil and you collapse the industry keeping America afloat right now.
It is a question of where our money goes, and whether we fund our adversaries, or whether we spend it in America. Otherwise, Asia will keep demand for oil up as a global commodity.
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true. But the collapse won’t happen for 15 years. There will be at least 12 years where the oil industry will be adding 1 trillion dollars to the economy.
Here’s the thing. energy costs are very elastic. if you lower the cost of energy its like pure oxygen to the economy. the economy lights on fire and the demand for energy goes up.
while cheaper energy will chop down new fracking 15 years from now.,..the USA will have entered into a whole new era of technology and abundance brought on by lower energy prices. The economy will be growing much faster than it is right now —when the only thing keeping forward momentum is the oil patch.
Lower energy prices kill one trick pony economies like Russian and Saudi Arabia. But for countries with very diverse economies like the USA and China say...lower energy prices are a great boon.
We have seen this before, and it is how we ended up producing less than half of our oil to begin with.
Lower prices will benefit Iran, Venezuela, the Saudis and others who are tapping conventional reservoirs, especially when the US has slowed down offshore drilling.
As current wells mature, their production drops off, especially the case with horizontal wells which stabilize somewhere around 20% of IP in a year or so. That wave of initial production will flatten out without new wells, and we'll end up importing more.
The current floor for WTI (or Bakken crude, roughly equivalent) is about $80.00 for drilling to continue. Get much below that, and drilling will grind to a halt.