A famous wager between Julian L. Simon and idiot Paul Ehrlich [1] famously pointed out that commodity prices fall over time. https://plus.google/+OlegZabluda/posts/abGPGQeGvzJ Oil/Gas was an exception. Oil Sands is an interesting twist on it. Although not quite big enough to supply the whole world for a long time from traditional commodity-like mining, its big enough on the margin. Now we know experimentally, that the cost is less than $33/bbl (because it sells for that much), and we know that the cost is driven largely by energy prices (heating sand, running centrifuges, transportation, etc, and injecting steam in-situ) [2]. Its quite easy to produce more oil that any country except USA, Russia, Saudi Arabia (China is 4th at 4.4 Mbbl/day, Canada 5th at 3.9 Mbbl/day, Iran 6th at 3.5 Mbbl/day). en.wikipedia.org/wiki/List_of_countries_by_oil_production There is also hope that technological oil/gas production will come to dominate stupid one, leading to normal fall in their prices. [1] https://plus.google/+OlegZabluda/posts/WW8t2YpgivJ [2] Of course Canadians should build a couple of nuclear reactors in the sands.
Posted on: Sat, 10 Jan 2015 01:33:19 +0000
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