The truth is that high oil and gas prices encourage the oil and gas companies to find new and different ways to find the oil and gas.
There are many Freepers who think that the high prices are are the result of some conspiracy to keep supply off the market. That couldn’t be more false.
Any oil company wouldn’t care if the others curtailed production or drilling activity, but the simple fact is that each is highly motivated to find and produce as much at these price levels as they can possibly afford.
I don’t know how many booms and busts in the industry that I’ve endured. Probably at least ten. Right now is a boom. Maybe something has fundamentally changed with the awakening of China and India and the increased demand for energy, but I haven’t seen a boom that didn’t with a bust yet.
The only fundamental change that I can tell, is that the floor has moved up a notch or two. Other than that, it is interesting that you mention the busts that we've all gone through, way too many times. I've been talking a lot about that recently with several friends that have been in the business, like me, for 25-30 years. We're all a little concerned that the signs of a crater are becoming increasingly familiar with past crashes. The natural gas end scares me a lot more than crude plays do, particularly since all my projects have tended to be 90/10 weighted in gas plays.
Ah well, it is always fun. Gotta sign off now for a conference call with my co-conspirators in an effort to figure out how we can keep driving up crude, natural gas and most particularly, gasoline prices. Love to sting all those whinin' FReepers that know what I'm up to.