For our oil to be developed we need some minimum pricing as well since fracking wells deplete faster. I believe that number is $80/barrel.
Thackney, do you have a handle on how low oil prices can fall and America still have an expanding supply of petroleum?
From the article:
“the cost of electricity in the US is already 40% lower than in Germany”
That’s an incredible competitive advantage and I’d like to see how we match up against other countries. Low energy costs are critical to an expanding economy.
I agree that energy costs can be an incredible competitive advantage. However, nothing cures high prices like high prices and the reverse is true as well. Prices will tend to relate to the cost of production. Government does not do the economy any favors when it attempts to pick a wining energy source because the subsidies and cronyism are not “sustainable”, a topic the left (er, “progressives”) love to scold the rest of us about.
In a few years when government gets exhausted from subsidizing wind power, and as wind companies become distressed, start to neglect maintenance and upkeep, as wind turbines start to become eyesores (and ear-sores) and as companies go bankrupt, there will be a tipping point when it these monsters are no longer fashionable in the minds of people concerned with migratory birds or some such.
Then there will be a great cry upon the land for a government subsidy to decommission “unsightly” wind turbines that “are killing our precious migratory birds and endangered bat species by the thousands”.
I do not believe there is a set number that anyone person can determine. And even if such a number could be calculated, there are too many variables for it to stay the same for long.
Regulations, the cost of labor, steel, competition in Natural gas for the same equipment, labor, etc.
If the price of natural gas climbs drastically due to regulations against coal power plants, the drilling rigs will swing from oil searching to gas, just as they went to oil in the past 5 years.
I think under current conditions, $80/barrel will lead to an expanding domestic oil supply, for now.