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Originally Posted by hadit
There is no greater incentive to innovate than increasing prices. One of the reasons we have more oil available to us now than we had before is that it was not economical to extract at lower prices. We leave large amounts of oil in every field for that reason.
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You are correct but you also omit that the reason extracting this oil isn't economical is also because it is not feasible. Advances in deep-well drilling technology have enabled us to extract oil that was impossible to get at until just a few years ago. A new, $500 million platform was recently launched in the Gulf of Mexico that can tap recently-discovered oil fields in water over 7,000' deep (drilling several miles into the Earth's crust, for a total of 28,000' of pipe). This represents a degree of difficulty orders of magnitude greater than standard offshore drills, and it won't get any cheaper.
Quote:
Originally Posted by hadit
As prices rise, it becomes more economical to extract.
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This is arguable. The high cost of extraction will justify correspondingly higher prices, but I wouldn't call it more economical to get it, just potentially more profitable. Keep in mind the basic axiom of pricing in the marketplace: you can charge what the market will bear, but eventually you reach a ceiling above which your product will not sell.
Quote:
Originally Posted by hadit
...As oil becomes more expensive, there will be a point at which the wahabbis will see a leveling off of income and ultimately reductions, because we will have switched from petroleum as our primary source of energy.
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I would think our national security issues demand we start "leveling off" the wahabbists' income
now instead of waiting for the market to do it for us...what is this, free-market capitalism will save us from terrorists?