Falling gas price is bad news for oil production

Falling oil prices might be a welcome sight for the consumer, but they aren't likely to ease oil supply concerns in the long term.
A lot has been made about the high cost of alternative energy solutions. But oil producers face a similar cost problem these days as a result of loss of revenue from the falling world market price. Most new oil discoveries are taking place in deposits that are more expensive to drill - whether that be oil sands or oil shale, or deeper offshore fields. Take the example of Brazil which has announced some spectacular oil finds in recent months. Now the president of the state oil company, Petrobras, says the current financial crisis means investment plans for new oil fields will have to be delayed to 2020.
In other words, don't expect oil prices to stay low for long.
OPEC is expected to slash production at an emergency meeting on Friday. But analysts wonder if the dramatic fall in global demand may outpace OPEC's moves to shore up the price.
It's astonishing how the tables have suddenly turned on the oil producers - at least for now.

- David Adams, Times Staff Writer

Comments

[Melissa M]

Now is a great time for America to continue reducing demand which in turn will lower prices. Let's take this opportunity to begin a meaningful switch to more fuel efficient vehicles like plug-in hybrids.
I hope the next president moves away from the past (fossil fuels) and into the future.

[David Mathews]

"Falling gas price is bad news for oil production"

This is the best news I have heard all day!

Hopefully, oil will become so cheap that the horrendous pollution of oil sands mining will become unprofitable and stop forever.

Hopefully the oil industry will lose all of its horrendous profits (derived from trashing the planet) and in the process lose political power as well.

Hopefully, the American auto industry will go belly up soon (not a hope, really, just reality) ... a well-earned fate for an industry which pushed Americans into buying mammoth SUVs while whistling besides the graveyard of Peak Oil.

I filled my tank for less than $30 today ($2.70 a gallon). Great. But Americans shouldn't take too much comfort in cheap gasoline ... bankrupt and insolvent nations won't enjoy access to the global oil market for very much longer, regardless of how many aircraft carriers America can float in the Persian Gulf and how many bombs American can drop on women and children in Iraq, Afghanistan and Pakistan.

Peak Oil has occurred. The American (and global) economy is in collapsing. Capitalism is dead. Capitalism is as dead as communism.

What this means is that Americans are going to lose their cars. Americans will suddenly discover that they are deprived of a lot of things in the years ahead ... including both luxuries and "necessities" and actual necessities.

This world in which we are living is passing away right in front of our eyes.

Fortunately, there is another world which is much older than humankind and which shall endure long after humankind is gone:

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