Shell abandoning deep water drilling

[zeitgeist57]

Every couple of days I read an article or hear a story, and I feel that the general public has it all wrong (which they normally do...stupid sheeple.)

 

http://www.nytimes.com/2015/09/29/business/international/royal-dutch-shell-alaska-oil-exploration-halt.html?_r=0

 

Why are environmentalists "claiming a victory" and economists having a heart attack over this? I'm thinking of DJ (Orion) here, but if we're over-simplistic about Shell's decision it has everything to do with a decline in oil consumption but also a decline in prices - which many would say is temporary.

 

Shell, BP, Chevron, Exxon-Mobil, etc...control A LOTTA OIL. They see prices go down, they shut down production. Oil is consumed globally - albeit at a lower rate than in previous decades, and the price goes back up to $75+ a barrel and Shell goes right back to drilling, and frackers gon' frack.

 

I realize $7B is a huge nut even for Shell, but is the market NOT going to come back anyway? Will Shell and the rest of the oil industry not be back to business as usual in a few months?

[Coaster]

Yeah I didn't need to read past the headline to associate the fact that they stopped because oil prices dropped.

 

If I were them though I'd pay off someone at a large news org to write the story as they are doing it because they love the environment.

[POS VETT]

BRILLIANT!

[greg1647545532]

Why are environmentalists "claiming a victory"

 

Eh, I know nothing about this but if environmental groups have been standing in the way, then part of that $7B must have been paying lawyers to fight the lawsuits, lobbyists to fight the politics, and general overhead to comply with environmental regulations that these groups were able to encourage/pass/enforce. Obviously costs + overhead must be less than revenue in order for a project to continue, and if revenue drops or is projected to drop then that's a big deal, but increasing overhead via lawsuits or whatnot could certainly be a factor.

[unfunnyryan]

Why are environmentalists "claiming a victory"

 

Because renewable energy sources (mostly wind/solar) are all getting cheaper and more effective, enough so that it stops drilling which environmentalist hate.

 

It's a big sign of how far we've come though.

[Berto]

Yeah I don't know if I would call this an environmental win. If there is oil there, they will eventually lose the battle.

 

I thought I understood that the folks in the middle east were increasing production to drive down he cost of oil. The purpose was to discourage oil exploration, which was justified by the high oil costs. At this point it looks like they got what they wanted, but as stated above they'll be back once the costs are justified.

[mmrmnhrm]

I thought I understood that the folks in the middle east were increasing production to drive down he cost of oil. The purpose was to discourage oil exploration, which was justified by the high oil costs. At this point it looks like they got what they wanted, but as stated above they'll be back once the costs are justified.

 

Yep... the oil is still down there, and while the ME emirs are pumping for all their worth, at cheap prices, the oil is still down there. Then what happens when the ME runs dry? Hey, that oil is still down there, ready for us to sell at higher prices.

[Forrest Gump 9]

So time to stock up on USO again?

[mmrmnhrm]

So time to stock up on USO again?

 

Probably not just yet, but Soon.