On Mon, Dec 22, 2014 'Chris de Morsella' via Everything List < [email protected]> wrote:
>> In the USA oil production rose by more than half a million barrels per >> day between 2007 and 2011 to the highest level in 15 years, and in that >> same year the USA exported more gasoline and diesel than it imported for >> the first time since 1949. And in 2012 USA oil production increased by >> another 760,000 barrels a day, the largest yearly increase since records >> about oil production started in 1859. But incredibly 2013 beat even that >> record, oil production in the United States rose by another 992,000 barrels >> a day! And in 2014 the USA overtook Saudi Arabia to become the largest >> producer of oil on planet Earth, it was already the largest natural gas >> producer in the world and has been since 2010. >> > > > Yes, so what? > So the "false projections" about the USA becoming the next Saudi Arabia turned out to be true. > I was under the mistaken impression that you understood what reserves > mean, > And I was under the mistaken impression that you understood that historically the proven oil reserves of a country have remained about as constant as the New York Stock Exchange, it changes every time a new oil discovery is made, and even more important, it changes every time a new technology is developed that allows for the economic extraction of oil in places where it had previously been uneconomic. > > Reserves measure what is in the ground that can be recovered. > Reserves measure what is known to be in the ground that can be recovered economically with existing technology. >> Explain to me how the Saudi's will make more cash when oil is selling at >> $60 a barrel then it did when it was selling at $130 a barrel. Is this some >> new form of mathematics? >> > > > Are you trying to be ironic or cute? Clearly the Saudi's feel they can > endure the loss now in order to drive a large portion of the higher cost > producers out of business. > So your theory is that the price of oil collapsed from $130 to $60 because of some sort of byzantine conspiracy of the Saudi's, but your theory just does not fit the facts. During the time of the oil collapse Saudi Arabia did NOT increase their oil production, they kept on using the same old technology and their production remained constant. However during that time the USA started using a new technology, and they increased their oil production, and did so DRAMATICALLY. And the USA increased its gas production even more. There is no need to invoke sinister plots by James Bond style villains, it's a simple rule of economics that when the supply of commodity X increases the price of commodity X falls. And the free market ensures that the sort of silly conspiracy you're so concerned about could never work. I manufacture 99% of the worlds widgets, you make 1%. I want to drive you out of business, so I figure I'll lower my price until you go broke and then I can jack them up to anything I want. So now you lose money on each widget you sell, the trouble is I do too. I have 99 times as much money as you do, but I'm losing it 99 times faster. Even worse, because the price is very low the demand for widgets is huge, and if prices are to remain low I must build more factories (or oil wells) and increase production. I'm losing money faster and faster, meanwhile you just temporally halt production in your small factory and wait for me to go broke. It won't be a long wait. John K Clark John K Clark widget -- You received this message because you are subscribed to the Google Groups "Everything List" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. To post to this group, send email to [email protected]. Visit this group at http://groups.google.com/group/everything-list. For more options, visit https://groups.google.com/d/optout.
