We are not going to run out of oil in the near future but all is not well in the oil world. It is decades now since oilmen have found more oil than we are consuming and increasingly difficult exploration has led to very deep ocean wells, Arctic exploration and fracking for tight oil. All are extremely expensive. Fracking has helped the USA to boost its oil production substantially and consumption savings in other parts of the world has offset the rising demand in emerging economies such as China and India.
What has changed is the high cost of exploration and extraction for very meagre returns. The oil companies have been selling assets and taking on more debt to fund their operations and the breakeven price of new oil has moved from $40 dollars a barrel to around $100 a barrel and some at $120 a barrel.
At the moment the price of oil is hovering around $100 but if ever there was a time for countries to be investing in electrical transport it is now. Many countries, including New Zealand have almost no other type of transport power except oil and their economies will be hard hit with a big price rise.
Oil is a diminishing resource with a volatile price and it would be prudent to have alternative transport systems to insure the economy against sudden price hikes.
http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/11024845/Oil-and-gas-company-debt-soars-to-danger-levels-to-cover-shortfall-in-cash.html
What has changed is the high cost of exploration and extraction for very meagre returns. The oil companies have been selling assets and taking on more debt to fund their operations and the breakeven price of new oil has moved from $40 dollars a barrel to around $100 a barrel and some at $120 a barrel.
At the moment the price of oil is hovering around $100 but if ever there was a time for countries to be investing in electrical transport it is now. Many countries, including New Zealand have almost no other type of transport power except oil and their economies will be hard hit with a big price rise.
Oil is a diminishing resource with a volatile price and it would be prudent to have alternative transport systems to insure the economy against sudden price hikes.
http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/11024845/Oil-and-gas-company-debt-soars-to-danger-levels-to-cover-shortfall-in-cash.html
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