tag:blogger.com,1999:blog-8695598.post111385288620615844..comments2023-12-17T19:35:07.459-08:00Comments on Bouphonia: The Shale GamePhilahttp://www.blogger.com/profile/15849261651028725772noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-8695598.post-1113979097275486282005-04-19T23:38:00.000-07:002005-04-19T23:38:00.000-07:00Anon, OK, after a bit of fact-checking, I think I ...Anon, <BR/><BR/>OK, after a bit of fact-checking, I think I see where we're getting mixed up. Assuming a production cost of $25/pb, shale oil would sell for a good deal more than $50/pb. The externalities put it through the ceiling, IMO. <BR/><BR/>Production costs for conventional oil are in the vicinity of $3 - $10/pb, depending on the country and site. <BR/><BR/>Regarding Australia's Stuart Project, <A HREF="http://www.greenpeace.org/international/news/shale-oil-victory" REL="nofollow">Greenpeace</A> claims that $360 million was spent to produce 1.5 million barrels of shale oil, before the project closed down. That's - what - $245/pb? As Greenpeace said, they proved that "It's feasible to produce oil from rocks at great environmental expense and with devastating toxic side effects and not be able to make a profit even with huge government subsidies."<BR/><BR/>Given that you'd expect early production costs to be very high, and to drop as processes are streamlined and economies of scale are realized, that's not entirely fair. But as you've probably guessed by now, I don't believe that shale-oil production will be economically feasible within the decade. And if you factor in environmental intensivity/damage to "ecosystem services," it may not be feasible in our lifetimes. <BR/><BR/>Just one man's opinion, though. And I'm no expert.Philahttps://www.blogger.com/profile/15849261651028725772noreply@blogger.comtag:blogger.com,1999:blog-8695598.post-1113972083933836642005-04-19T21:41:00.000-07:002005-04-19T21:41:00.000-07:00Anon,Perhaps you're thinking about cost versus mar...Anon,<BR/><BR/>Perhaps you're thinking about cost versus market price? If shale oil costs $25.00/pb to produce, it'd be roughly twice as expensive as conventional oil.<BR/><BR/>Anyway, I'll dig up the cite for my claim, and post it ASAP.Philahttps://www.blogger.com/profile/15849261651028725772noreply@blogger.comtag:blogger.com,1999:blog-8695598.post-1113967348844946572005-04-19T20:22:00.000-07:002005-04-19T20:22:00.000-07:00re: financial risk to drillers, something you may ...re: financial risk to drillers, something you may be forgetting to consider is the ready availability of swaps/forwards/futures as hedging instruments (which for oil didn't really exist in the early 80's.) Companies can today lock in high forward oil prices in ways that weren't available then. Suncor eg has been hedging part of its forward oil sands production for years. WTI is >$50/bbl all the way out to '07.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8695598.post-1113966436676253902005-04-19T20:07:00.000-07:002005-04-19T20:07:00.000-07:00The cost of extracting and refining shale oil is, ...<I>The cost of extracting and refining shale oil is, obviously, going to put its price well above $50 per barrel</I><BR/><BR/>Do you have a source for this? Every study I have read on shale oil puts the all-in per barrel cost at @ $25, including energy cost.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8695598.post-1113950685619360072005-04-19T15:44:00.000-07:002005-04-19T15:44:00.000-07:00Thanks for the tip, AJ!You too, Ted...I saw your c...Thanks for the tip, AJ!<BR/><BR/>You too, Ted...I saw your comment and responded.Philahttps://www.blogger.com/profile/15849261651028725772noreply@blogger.comtag:blogger.com,1999:blog-8695598.post-1113941590745657712005-04-19T13:13:00.000-07:002005-04-19T13:13:00.000-07:00OT: answer to your question at 3:24 pm on Eschaton...<A HREF="http://www.haloscan.com/comments.php?user=atrios&comment=111393121034817156#2657181" REL="nofollow">OT: answer to your question at 3:24 pm on Eschaton</A>Anonymousnoreply@blogger.com