Peak International Oil Company CapEx Spending

Gail Tverberg has excerpts from a Steve Kopits presentation on how big oil companies are cutting their capital expenditures budgets on exploration and drilling (Upstream) spending. The price of oil isn't high enough to justify enough drilling to maintain and increase oil production rates. Kopits argues that exploration and production costs are rising much faster than prices and have been for years. Those costs have now gotten high enough that oil companies can not economically justify spending enough to maintain production. This is how Peak Oil happens. When costs go even higher than the price a monopolist could charge production is going to drop. Says Kopits: Not in a Supply constrained model! In a Supply constrained model, the price goes...

Source: FuturePundit - February 28, 2014 Category: Health Medicine and Bioethics Commentators Authors: Randall Parker Source Type: blogs