Further, more than 70 percent of the production from the shale has occurred during the last two years alone, according to the Houston Chronicle.
That's part of the reason gas prices have come down so far so fast, and it had nothing to do with the government.
Although at some point the price of a barrel of oil will challenge the Texans to produce at a profit, the same innovation that allowed the shale boom in the first place are constantly lowering the cost of getting that next barrel out of the ground.
Both the Saudis and the Russians are frowning.
Supply and demand.
ReplyDeleteThe Saudis have turned off the tab before and have literally set the world price for the past 40 years. That won't work as the US production ramps up. Eventually the price will find a bottom that makes sense.
And there will be a natural ceiling on the price as well. As it tries to go up, more and more wells become economical, go online, and increase supply. It's all good.
Delete