Costly oil: Now I think I get it.

[trof]

Excellent peak oil video on the Documentary Channel now.
And now I think I at least partially understand the high price of oil.

All the cheap, easy to get oil is gone.
There's still oil to be gotten, but it's much, MUCH harder to get at, and thus exponentially more expensive.

In offshore drilling, 1000' used to be considered 'deep'.
Now rigs are capable of 9000'. But that comes at a huge increase in price of the rig and more roughnecks and technicians to operate it.
And to get that oil to refiners and markets is much more costly because...it takes ever more expensive oil (gasoline, diesel, etc.) to get it there. A vicious circle.

There's a lot of recoverable oil locked up in oil shale and oil sands.
But again, the extraction methods are much more expensive in time, equipment, labor, transportation and processing.

So there's no more hauling a relatively cheap rig out to somewhere in West Texas, poking a hole in the ground, and bringing in a gusher.

Yes, the oil companies are making a huge profit. And I think we're being ripped off, at least to a degree.
But that's not the whole problem by a long shot.

OK, I'm ready for your critiques.
:-)

[rucky]

1. From purely a business perspective...

wouldn't it make for sense for Exxon to invest in harnessing renewables at this point?

[trof]

2. Sure seems so.

I think that's inevitably the next 'big thing' in energy.

[Junkdrawer]

3. There's maybe 400 billion barrels of easy-to-drill light, sweet crude in Iraq...

The threat of this oil making it to market is suppressing investment in more expensive oil explorations.

[GliderGuider]

5. Where do you get 400 billion barrels? The accepted figure is 115 billion.

http://en.wikipedia.org/wiki/Oil_reserves#Iraq

[Junkdrawer]

6. 112 billion proven...upto 400 billion probable or possible (why I said maybe)...

“Iraq contains 112 billion barrels of proven oil reserves, the second largest in the world (behind Saudi Arabia) along with roughly 220 billion barrels of probable and possible resources. Iraq’s true potential may be far greater than this, however, as the country is relatively unexplored due to years of war and sanctions. Deep oil-bearing formations located mainly in the vast Western Desert region, for instance, could yield large additional oil resources (possibly another 100 billion barrels), but have not been explored.”

http://www.eia.doe.gov/emeu/cabs/iraq.html

http://www.globalpolicy.org/security/oil/2002/12heart.htm

[sharesunited]

4. I just watched "There Will Be Blood" three times in a row.

Wow, what a great picture. Not just good, but truly great. An enduring cinematic achievement. Like Citizen Kane on steroids.

Splendid depiction of the early days of oil when it oozed out of the ground begging anyone with eyes and a nose to take it.

[Initech]

7. That movie kicked ass.

Plainview was quite the psycho. He'd stomp over anybody and everybody including his own son to get his precious oil. No different from Bush really.

[Contrary1]

8. Nah, oil companies make zero profit...

http://www.comedycentral.com/colbertreport/videos.jhtml?videoId=167611