A basic "balance sheet" might allocate fuel needed for exploration, well development, production, crude oil transportation, refining, further product transportation and delivery to a customer. (This would vary, of course, depending on source and market.) It would seem quite important to know if we are approaching the point where producing more oil actually reduces the supply. Comparison with biofuel costs might also be interesting, but that's another question.

  • $\begingroup$ " producing more oil actually reduces the supply " Where did you find the information that oil companies loose money by producing oil ? $\endgroup$ May 5 at 18:35
  • $\begingroup$ As in « hey, let’s spend more than we earn and make a profit » hmm I don’t think that is how oil companies operate. $\endgroup$
    – Solar Mike
    May 5 at 19:54
  • $\begingroup$ I seem to remember many years ago some methods take 3 barrels to extract and process 4 barrels which was on the high end. Might have been oil sands which is why they try to use natural gas to do it. Sweet crude takes a lot less I imagine. $\endgroup$
    – DKNguyen
    May 5 at 20:35
  • $\begingroup$ Oil companies do this all the time. If the price of oil drops, drilling dries up. Price up, drilling increases. They have to know their costs/barrel. $\endgroup$ May 5 at 21:07
  • $\begingroup$ Regarding reducing supply... unfortunately for the environment, no evidence of this whatsoever. Global totals for oil and natural gas production have each been increasing on a nearly straight line trajectory for the last 55 years, with the only major speed bump in the curves being in oil around 1975-85. The cost changes, the price varies wildly, but demand is remarkably inelastic. $\endgroup$
    – Pete W
    May 6 at 13:06

A recent paper seems to provide an answer: https://www.researchgate.net/publication/354885905_Peak_oil_and_the_low-carbon_energy_transition_A_net-energy_perspective There is an interesting graph, displaying the energy cost of producing more energy- in petroleum terms- over time, with an extrapolation to the near future. Thus, according to the paper, producing 100 barrels of petroleum-sourced energy today requires 15 barrels. In 2050, it will require 100, thus making petroleum based energy exploration and production economically moot.


Some numbers that may help; A consultant on a business channel ( Fast Money) said that today The cost to produce oil in the US is 55 (West TX , US dollars) , internationally it is 50 (Brent, North Sea, US dollars). These are break even costs and include capital costs , so a socialist might argue that the cost is a few percent less. That is barrel prices (42 US gallons). I do not follow oil prices but I think it is now around 62 (WT, US dollars), so the $55 cost would be about 0.89 Bbls per Bbl if converted to oil.

  • $\begingroup$ The text looked ok on my screen , I don't know what I did but I think it is understandable. $\endgroup$ May 5 at 23:28
  • $\begingroup$ I agree. Other than a lot of extra spaces, I couldn't figure out what is wrong. Did you perhaps cut and paste instead of typing it in? When you say the price is $50, what volume is this for? It would be clearer if you use units like dollars/Bbl. $\endgroup$
    – Eric S
    May 5 at 23:44
  • $\begingroup$ It seemed that the dollar symbols were causing problems. I removed all the problematic ones. Please see if my edits are acceptable. My edits might not be visible as I don't have sufficient rep. $\endgroup$
    – Eric S
    May 5 at 23:49
  • $\begingroup$ The $ symbol is used to start and end MathJAX. On EE.SE they use \$ which is probably less problematic. $\endgroup$
    – Transistor
    May 6 at 12:41
  • $\begingroup$ I don't know why it is different for stackexchange sites. Very annoying. $\endgroup$ May 6 at 15:45

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