I guess I mean practically. It's not going to take a huge drop in demand to re-balance the entire industry. When demand does start dropping, the cheapest barrel to produce will be the one sold, and when we are talking about oilsands, long pipelines, and tankers I don't see our barrels standing up too well for cost. So once prices drop, any idea for big growth that ultimately requires massive spends and long timescales starts to look less likely.
Now, it's fair enough to argue demand will only ever increase, and my own assumption is it won't. Coal is easy energy. Dig it, move it, burn it. Oilsands is not that. As energy becomes more fungible(electrical sources can be anything) it becomes more likely the large variety and new innovations will displace oil, if only for the simplicity of other sources. Aircraft and shipping will be a long time before real noticeable changes take place but there aren't that many O&G uses that can't be replaced with electrical sources in time.
Sometimes I wonder if people really understand just how much goes into all the steps from finding oil to burning it. There are a lot, and a lot of people and expenses, even ignoring the environmental part.
|