the “financial return on selling” these products, we find a timing factor that borders on the absurd. There’s a major time lag between an energy company’s decision to invest in producing oil from an expensive source because the price of oil is high, and that oil being brought to market. It takes time to create the pipeline infrastructure and new wells and get them producing, and by the time that oil hits the market, the price may be low again. Oops. Suddenly, oil firms are selling oil at a financial loss, and need to limit that loss, so they close the wells. Rinse and repeat. Looking at the way these decisions are made by markets, it’s likely that oil production will begin to “yo - yo” between prices high enough to send the economy into a recession, and prices too low to be worth producing.
All growth in world oil supplies (height of bars in above graph) since 2005 is from unconventional sources (orange) which are more costly in money and environmental terms. Currently shale oil requires a price of over $60 a barrel to break even because it is an inherently more complex process. 176 Many OPEC countries, despite having access to cheaper-to-extract oil, now require over $100 per barrel to balance their fiscal situations (which may include giving out money to their populace to avoid revolution). 177 Since the beginning of 2015, 213 North American oil and gas companies have filed for bankruptcy with more than $85 billion in debt (about the same as the combined GDP of Montana and North Dakota). There is plenty of oil left but it’s getting more expensive. In the same way a cheetah has to shift strategies when there are few gazelles left, one day -possibly quite soon - this increased cost of extraction will necessitate a change in societal metabolism.
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