From the San Antonio Express-News:
The lowest crude prices in six years might not be enough to put the brakes on the U.S. energy renaissance.
Some parts of North Dakota’s Bakken shale play are profitable at less than $30 a barrel as companies tap bigger wells and benefit from lower drilling costs, according to a Bloomberg Intelligence analysis. That’s less than half the level of some estimates when the oil rout began last year.
The lower bar for profitability is one reason why U.S. oil production has remained near a 40-year high even as crude prices fell more than 50 percent over the past year to the lowest level since March 2009.
“One of the explanations for why production hasn’t fallen off is that the cost has gone down so much,” David Hackett, president of Stillwater Associates LLC, an energy consulting firm in Irvine, California, said by phone. “The marginal cost to produce has shrunk pretty dramatically with the drop in prices. The efficient drillers are now able to take advantage.”
West Texas Intermediate crude for September delivery fell to $42.23 a barrel Thursday, the lowest settlement since March 2009. In North Dakota, where producers have to offer discounts to account for extra transportation costs, the price of Bakken oil was to $30.80 Wednesday, according to Royal Dutch Shell PLC.Between 1870 and 1885, the price of kerosene (the main use of oil then) dropped from 25 cents a gallon to 8 cents.
John Davison Rockefeller made even more money.
Today's oilmen are doing it again.