Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: thackney
Agreed. I know that a lot of costs are literally sunk, but there have to be significant marginal costs to frack a new area from the existing hole in the ground. All I'm saying is that $60 oil makes all that a lot more questionable than $100.

Which all gets away from my original point: the recent surge in fracking as an extraction method is a result of $100 oil, general deflation (aside from oil) actually is another driver to delay new exploration or new areas of production - delay means lower prices for the fixed equipment and the likelihood that temporarily reduced production will help raise oil prices. Almost no-one alive today has experience of deflation in a major economy, it will have the most peculiar effects on business decision making in general, and make businesses resistant to investment given that they will be very unsure on their returns.

46 posted on 01/07/2015 6:38:35 AM PST by Riflema
[ Post Reply | Private Reply | To 44 | View Replies ]


To: Riflema
Which all gets away from my original point: the recent surge in fracking as an extraction method is a result of $100 oil,

Do you understand, the drilling rig count, went significantly high before we reached those prices?

47 posted on 01/07/2015 6:54:05 AM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 46 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson