Hypothetical Question: if crude = $35 next week, would that fix the economy?

Discussion in 'Economics' started by Happy Hopping, Dec 11, 2011.


  1. Probably, just probably, QEs would be actually good or very good for the US economy in long run!

    But not too many people in general, and only few investors in particular realised that Yet!!!


    http://en.wikipedia.org/wiki/Oil_shale_reserves

    Q

    The economic feasibility of shale oil extraction is highly dependent on the price of conventional oil; if the price of crude oil per barrel is less than the production price per barrel of shale oil, it is uneconomic.

    ...

    However, worldwide technically recoverable reserves have recently been estimated at about 2.8–3.3 trillion barrels (450×109–520×109 m3) of shale oil, with the largest reserves in the United States, which is thought to have 1.5–2.6 trillion barrels (240×109–410×109 m3).[2][3][4][5]

    UQ

    http://dailyreckoning.com/oil-shale-reserves/

    Q

    Can Oil Shale Change The World?

    America’s oil shale reserves are enormous, totaling at least 1.5 trillion barrels of oil. That’s five times the reserves of Saudi Arabia! And yet, no one is producing commercial quantities of oil from these vast deposits. All that oil is still sitting right where God left it, buried under the vast landscapes of Colorado and Wyoming.

    Obviously, there are some very real obstacles to oil production from shale. After all, if it was such a good thing, we’d be doing it already, right? “Oil shale is the fuel of the future, and always will be,” goes a popular saying in Western Colorado.

    But what if we could safely and economically get our hands on all that oil? Imagine how the world might change. The U.S. would instantly have the world’s largest oil reserves. Imagine…having so much oil we’d never have to worry about Saudi Arabia again, or Hugo Chavez, or the mullahs in Tehran. And instead of ships lined up in L.A.’s port to unload cheap Chinese goods, we might see oil tankers lined up waiting to export America’s tremendous oil bounty to the rest of the world. The entire geopolitical and economic map of the world would change…and the companies in the vanguard of oil shale development might make hundreds of billions of dollars as they convert America’s untapped shale reserves into a brand new energy revolution.

    Presidents Gerald Ford and Jimmy Carter may have been entertaining similar ambitions in the late 1970s when they encouraged and funded the development of the West’s shale deposits. A shale-boom ensued, although not much oil flowed. The government spent billions and so did Exxon Mobil. New boomtowns sprung up in Rifle, Parachute, Rangely, and Meeker here in Colorado.

    And then came Black Monday. May 2, 1982. The day Exxon shut down its $5 billion Colony Oil Shale project. The refineries closed. The jobs left (the American oil industry has lost nearly as many jobs in the last ten years as the automobile and steel industries.) And the energy locked in Colorado’s vast shale deposits sat untouched and unrefined.


    UQ

    http://www.reuters.com/article/2011/11/21/us-oil-new-aramco-idUSTRE7AK1T520111121

    RIYADH | Mon Nov 21, 2011 1:29pm EST

    (Reuters) - Saudi Arabia's state energy company said on Monday that its dominant role in world oil supply had been altered by large new reserves in North America, sapping the urgency to develop the kingdom's own reserves.
     
    #41     Dec 27, 2011