....so why is it not being extracted?
According to expert analysis, the good old USA has more oil here than in all the middle east. At current consumption rates there is enough black gold to fuel the USA for over 2000 years. Over a TRILLION barrels worth lie beneath Colorado and Utah. President Bush signed off the drilling permissions way back in August 2005 but so far not one drop has been recovered.
So, how could this be?
There are many reasons.
The price of oil is high and many people are making a fortune from it. Tapping into the new discovery will drop the price.
Could OPEC be funding the ecoloons who vehemently oppose any new oil field developments?
America won't have a reason to trample over foreign nations. Securing oil supplies is a handy excuse for throwing one's weight around the world.
America wants all the oil it can get it's hands on for itself to strengthen it's international power.
I'm sure there are other reasons. I'm sure you can think of a few yourself next time your at the pump and paying nearly £6 a gallon.
10 comments:
The ECO loons controlling governments don't want to let go of their primary reason for existence. They can't have us getting access to cheap and plentiful fossil fuel supplies - we might use them and spew out lots of luvverly CO2....
The Yanks are keeping their oil for themselves, just like the Chinese are keeping their 'Rare' Earths.
Perhaps they're waiting for the dust to settle after the dollar collapses and is no longer the reserve currency of the world, they've defaulted on their debts then they can refinance.
Indeed Joe.
Just like the UK Government is using up North Sea Oil before it loses control of it.
Are we planning another invasion? Cos if so, I don't fancy signing up. Not scared of the US Army, more like the well Armed Civies!
I think it's partly what you say and partly was Joe P says.
But in financial terms, if you expect oil to increase in value by (say) 5% a year (exponentially), and it will cost you 2.5% of today's value to extract it (this cost remaining fairly flat), then it is a better investment to leave it under the ground (add inflation on to both sides of equation).
For one unit of oil, your profit this year would be (say) $80 selling minus $40 drilling = net profit $40.
But if you leave it for a year, next year your profit will be $83 minus $40 = $46.
So is it better to earn $40 this year and stick it in the bank to earn maybe $1 interest, or to wait until next year and have $46?
That's a 15% real return on investment ($46 divided by $40), inflation protected for doing absolutely nothing, isn't it?
Of course, if you expect oil price to fall, then the calculation flips on its head.
oops, "it will cost you 2.5% of today's value to extract it" should of course read "it will cost you 50% of today's value to extract it".
Now Rab, because i am an educated cunt and read extensively, let me trell you about shale oil, briefly. No one claims they can actually make gasoline from this source. It is not 'oil' but a 'oil-equivalent' called Kerogen. The shale has to be mined, transported and heated to 4500 degrees C. The waste disposal problems are huge and it takes a ton of rock to produce enough for one car tank of petrol. Shale oil is like a mirage that retreats as it is approached. Shale oil will NOT replace oil. Is that clear now? :)
DL, no one likes a smart arse!!
Well none of you Killie cunts anyway!
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