How is it infinite? Oil forms from ancient organic matter under intense heat and pressure, a process taking millions of years, making it non-renewable on human timescales.
It can be synthesized from air and water with energy and the right catalysts, although the process isn’t cheap. However if solar power keeps getting cheaper it might become feasible to produce it this way instead of drilling.
Despite spending a mind-numbing amount of time deeply embedded in the automotive world, I had no idea synthetic oil didn’t have oil or petroleum precursors.
This is an incredible, and wildly under discussed win.
As soon as solar energy is being used at scale, this will probably become way more commonly used - big electricity expense is the only main cost.
The problem is that solar only works when the sun is out and startup/shutdown on industrial chemical processes isn’t easy. Once you start involving batteries for around-the-clock operation, it’s more efficient just to use electricity directly. Synthetic hydrocarbons are best used for the cases like aviation where the energy density is the biggest hurdle.
Sarcasm? 150-200M oz of silver are recycled annually[1]. Oil obviously is mostly burned and won't be recoverable, and clearly finite (even if we managed to squeeze out more with fracking etc.)
Annually, we consume more oil than we find additional reserves of. The difference is something like 12 times less than annual consumption, and the gap is widening.
If you’ve found a way to escape that arithmetic, I’m all ears.
The math is pretty simple: the world consumes 36 billion barrels of oil a year and there are like 2 trillion barrels of known reserves. We have enough reserves for 55 years of current consumption. There’s 0 incentive to find more.
To follow up on that, I think that 50 year horizon number has even been the case for something well over 50 years now. It seems we are incentivized currently to extract from deposits around that threshold of years? One professor I had even claimed this will always hold true indefinitely, since at some point we’ll switch away from oil, this holding constant there being about 50 years of known reserves left, once it become economically infeasible to extract that oil.
Ostensibly not all known oil fields are actively being extracted. This fact alone makes it unlikely that discovering a new source would affect the price of oil, unless it can be retrieved using cheaper than the existing methods. It’s also worth pointing out that “oil” as a resource isn’t this homogenous substance. Basically every different source of oil has a different (and expensive) refinement process on the other end. It’s a lot more variables than the Reddit-style armchair oil tycoon would probably expect.
I'm sorry, Reddit-style armchair oil tycoon? I've been using the word "oil" commodity the same way as everyone else has, why did you pick out my comment for that aspersion? Why not upthread when people were discussing 0 incentives? You are applying this aspersion and standard asymmetrically.
Am I? I think I used it in 100% of my comments before this one… it was not meant as an offense, but more as an acknowledgement that almost nobody here (including myself; I’ll happily take the moniker if you won’t) has the appropriate knowledge to argue this topic.
Fair enough, though production does impact price to a degree. For oil this is less important than some other commodities, but it’s still a factor. But this is really a tangent from the central argument that is: oil exploration isn’t so important if we already aren’t producing from many existing known sources, and exploration itself is only sort of loosely tied to selling the end-product in terms of sales.
$35-40 takes into account the risks and time value of the investment, potential price fluctuations, and the preference for (all else equal) lowest cost extraction.
I would not expect someone to dump in a shit ton of money, hope the well works out, and nothing else go wrong right at an expected cost at $60/barrel with amortized investments/operations included.
Oil on the other hand is infinite.