As oil is extracted from an oil field, the internal pressures that aid in the extraction process decrease so that as more oil is extracted, the extraction process becomes slower and more challenging. Newer and more expensive technologies have to be researched, developed and utilized, significantly increasing the cost.

These extra costs migrate from the previous profit side if the equation to the current cost side of the equation. IOW, the oil companies use previous profits to fund current research and development in order to extract oil from less accessable and more challenging oil reserves.

As the current oil reserves continue to deplete, this extraction process will continue to become more difficult, which will continue to put upward pressure on the costs of extraction.

New oil reserves have been located, however their locations are geographicly very challenging. One is under the Siberian permafrost; another is off shore Brazil under historicly deep water for extraction. Both of these senarios make future extraction very difficult and costly.

It is difficult and dangerous work.

 

I am with you there. Any corporation can claim they only make 10% net profit if they write off 90% as expenses and overhead costs. They just have clever accountants. Doesn't take a financial genius to see through that.

 

I really can't believe you're serious........... I guess every day when the price goes up another $2 or $3 a bbl, the cost of extracting it went up too??? Inversely, when it goes down, I guess the price of extracting it goes down too!!! What a concept!!! BTW, what do you do for a living? I'm guessing it's not flying planes........

 

The problem is that in our OH SO sensative society today if you are on the side of lets drill for oil in ANWR then you are perpetuating the huge oil company profits and are anti-alternative fuels thus pro Earths ultimate destruction. If you take the position of looking for an alternative fuel source you are a tree hugging ELF sympathizer. No matter what idea someone comes up with to try and help solve the enegry crisis we face in America, there always going to be someone claiming they are offended by the idea and that it will never work and blah blah blah. Its SUCH a pesimistic society today that it all becomes that self-fullfilling prophecy and we end up right back at square one.

 

He is definitely not an airline pilot for him to spewing this kind of nonsense.
Reminds me of Russian communist Putin propaganda spreading lies about Chechnya so he can invade Chechnya.

He must think that we will actually buy into this bs. Like I said he sounds a lot like the oil company employee that I had the misfortune of sitting next to on one of early commuting flights.

 

No doubt refining costs have increased some, but I agree 50% seems unreasonable. It is those in control of the oil fields (and thus the raw crude) who are profiting the most.

So who controls the oil fields?

http://www.sfgate.com/cgi-bin/articl.../BUMDUOD7S.DTL

"The oil fields they [big oil] do control account for only about 6 percent of the world's known oil reserves. Government-run companies in oil-producing countries, such as Saudi Aramco in Saudi Arabia or the National Iranian Oil Co. in Iran, have the rest."

The article is an interesting read.

Conspiracy theory. Solid.

 

The correlation isn't that direct.

 

You'd be wrong.

 

I can see that because I don't agree with you, you think I don't belong here, but that isn't how this forum, or this country, works.

As to false information, my arguments are on occasion simplified to a degree, but hardly misleading or false.

You take a very vapid approach when people disagree with you in that you resort to personal attacks, trying to discredit other people who have just as much right to be here and express their opinions as you do.

I am retired from 20 years of Legacy flying, and have been a pilot since 1974.

 

A few simple truths. The oil companies don't and can't control the world price of oil. Neither can the politicos. As one astute observer pointed out, they own a very small percentage of oil wells. They are primarily in the business of extraction and refining.
There seems to be a very vocal element here without any understanding of the basic economic fundamentals. I suggest a course of study in economics. This same group could also make good use of a course in logical debate and manners.

I am always amused at the cries for more taxation and more regulation. I urge you gentlemen to take a very hard look at what taxation and regulation have done for much of the world. http://europe.theoildrum.com/node/2653

Finally, I have appreciated very much the logical and factual posts made here and urge anyone who is really interested to check your facts and not accept blather as any sort of well reasoned argument.

Out.