Oil & Gas : leave it in the ground?

CLAPTON

I've always thought that the UK oil and gas rush since the 80s has done little good and that it would have been better to exploit it at a much slower pace.

It now seems that the one thing that UK government and the Scottish Government agree on, is the rapid exploitation of what is left.


What's best?

Max profits now or slow and steady and leave some for the future?

ging84

get it out now
tomorrow it will be worthless

grizzly1911

ging84 wrote: »

tomorrow it will be worthless

Why?......…....

iAMaLONDONER

CLAPTON wrote: »

I've always thought that the UK oil and gas rush since the 80s has done little good and that it would have been better to exploit it at a much slower pace.

It now seems that the one thing that UK government and the Scottish Government agree on, is the rapid exploitation of what is left.


What's best?

Max profits now or slow and steady and leave some for the future?

I agree saving will be good but in the way things are going the tax (fossil fuel taxes) on oil/gas will be so high that the UK wouldn't be able to afford to use it!

cells

Its quite easy to say just leave it in the ground

but what would you do to fill the lost £10B or so per year in taxes?
Cut spending or increase other taxes or borrow more? What are the

Also more than the tax is the balance of trade. Cut oil production by 1mbpd and you need to spend £23B a year importing it. The value of the pound would fall meaning the cost of imports rise so people would have less money for other things if foods and foreign goods cost more.


Overall I would say produce as much as you can for your needs but there is little reason to export it (unless you are a Russia or a Saudi and are awash in it)

CLAPTON

cells wrote: »

Its quite easy to say just leave it in the ground

but what would you do to fill the lost £10B or so per year in taxes?
Cut spending or increase other taxes or borrow more? What are the

Also more than the tax is the balance of trade. Cut oil production by 1mbpd and you need to spend £23B a year importing it. The value of the pound would fall meaning the cost of imports rise so people would have less money for other things if foods and foreign goods cost more.


Overall I would say produce as much as you can for your needs but there is little reason to export it (unless you are a Russia or a Saudi and are awash in it)

we are net importers of oil and gas.

although we do export oil its because of the quality and refining but overall we are net importer

my question arises because during the 80s and onwards we produced as much as possible to reduce taxation; one might observer that we would be better off now if we had produced less then.
when it's gone will we regret it?

vivatifosi

grizzly1911 wrote: »

Why?......…....

Currently extraction costs about $40-50 in the North Sea (per article I put on Scottish independence thread). Substitutes such as fracking could make it uneconomically viable if the price per barrel falls. Saudi oil on the other hand costs about $4-6 per barrel to extract. Bear in mind there are other costs to factor in on top of that. Can't remember what the trading price per barrel was, just over $100 per barrel iirc (links on other post).

cells

CLAPTON wrote: »

we are net importers of oil and gas.receipts oilwe do export oil its because of the quality and refining but overall we are net importer

my question arises because during the 80s and onwards we produced as much as possible to reduce taxation; one might observer that we would be better off now if we had produced less then.
when it's gone will we regret it?

I don't know do you regret the higher employment higher tax reciepts and lower debt of the 80s vs the clapton plan?

Were the 80s a time of plentiful joy and wealth for the masses of the uk ?



the correct answer is that no one knows if oil should have been oumoed out today tomorrow or yesterday it all depends on too many unknowns. Also note oil is not a tap to turn on and off the geology means you can produce only at a given rate

cells

vivatifosi wrote: »

Currently extraction costs about $40-50 in the North Sea (per article I put on Scottish independence thread). Substitutes such as fracking could make it uneconomically viable if the price per barrel falls. Saudi oil on the other hand costs about $4-6 per barrel to extract. Bear in mind there are other costs to factor in on top of that. Can't remember what the trading price per barrel was, just over $100 per barrel iirc (links on other post).

the marginal cost of an existing fossil fuel site be it oil or gas is close to zero

It is like a nuclear plant. Quite expensive to build but the marginal cost is less than $10 per Mwh once built.

it is the reason why fossil fuels will be around for many decades even if nuclear or solar or whatever becomes cheaper. The coal gas and oil mines will just have to reduce prices below this new source of energy (of course investment into starting new fossil fuel sites will be cut back but the existing ones will still have 40-60 year lives)

CLAPTON

cells wrote: »

I don't know do you regret the higher employment higher tax reciepts and lower debt of the 80s vs the clapton plan?

Were the 80s a time of plentiful joy and wealth for the masses of the uk ?



the correct answer is that no one knows if oil should have been oumoed out today tomorrow or yesterday it all depends on too many unknowns. Also note oil is not a tap to turn on and off the geology means you can produce only at a given rate

In my view, the oil and gas in the 80s caused the pound to become too strong and helped kill off a lot of Uk industry.

A lower pound at that time would have encouraged new export industries to start up so it's likely that there would have been higher employment during that period.

Once the 00s arrived we really didn't need the oil and gas as we had a sustained boom (without bust) until 2007/8.

So, in my view we would have been a lot better off then and now if we had left a lot more in the ground.

I'm not an expert on oil and gas production but we could have restricted the number of licenses to restrict the flow.

vivatifosi

cells wrote: »

the marginal cost of an existing fossil fuel site be it oil or gas is close to zero

It is like a nuclear plant. Quite expensive to build but the marginal cost is less than $10 per Mwh once built.

it is the reason why fossil fuels will be around for many decades even if nuclear or solar or whatever becomes cheaper. The coal gas and oil mines will just have to reduce prices below this new source of energy (of course investment into starting new fossil fuel sites will be cut back but the existing ones will still have 40-60 year lives)

Interesting, thanks. I don't suppose you would happen to have any stats on how much of the oil reserves is in currently exploited wells and what is elsewhere (in other words, where the marginal cost would be higher).