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Discussion: (8 comments)

  1. N F Healy

    How much of this production is based on a per barrel price 10x higher than in 1986 and 1998 – or 5x times higher than the summer of 2002 before we invaded Iraq –
    Nat Gas vs. electric vs. gasoline competition – so why is oil @ $105??

    1. That my friend is one of the miracles of the free market. As real price goes up, there is more incentive to increase supply until the price drops again – or to supply alternate forms of energy for real cheap, like natural gas, which has never been cheaper (well at least two years ago).

      1. Actually the price of natural gas today is $3.35 which is up from its low of $1.89 in 2012 but that was for 2 months, the average for 2012 was nearer 2.65. Note that in 2008 the average was nearer to $10 (wellhead price). So while the price is up from the bottom it is far closer to the bottom than the top.

    2. Another note oil is only 3x what it was in the mid 80’s if you take inflation into account.

  2. So will the next 2M barrels/day also happen that fast?

    Probably not. But if it did, we could remove tons of imports from the Middle East.

    1. I bet the next 2 million will happen even faster, and then the increase will start to taper off.

  3. The dramatic increases in production will not slow until the price of oil drops appreciably. They haven’t even touched the Permian Basin in Illinois yet, or countless other proven shale reserves.

    1. Yes the limiting factor for oil is now drilling equipment. NG is slowing because of the low price and inability to move it to market.

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