OPEC just delivered the killshot to KeystoneXL pipeline (oil under $70/barrel)

[nashville_brook]

One of the reasons that Keystone hasn't been such a big deal lately is that oil prices have fallen so low that it's not been quite cost effective to remove oil from tar sands. The magic number everyone has talked about is $70 a barrel -- once oil falls below $70 a barrel, it's no longer profitable to mine tar sands and then transport it market.

Today oil fell to about $65 a barrel and that puts a major damper on tar sands oil.

The jury is out on how this will affect fracking. Shale oil PR spinsters are out in force today with the message that they can take a hit down to $48 a barrel. We'll see. I'd guess that this drop is going to slow some fracking operations, and make some deep water drilling less attractive. For this I am thankful.


http://www.bbc.com/news/business-30223721

Oil prices plunge after Opec meeting

Shale threat
Analysts suggest the strategy of maintaining output may be aimed at retaining dominance of the market in the face of increasing shale oil production in the United States.

The shale boom has been one of the drivers behind the decline in the oil price.

But as the oil price dips, shale becomes less economical to produce.

If oil prices are allowed to remain low for some time that could cap shale production over the longer term. So keeping oil prices low may in fact make sense for Opec.

"The Saudis want Opec to remain relevant,'' said analyst Phil Flynn, speaking before the end of the meeting in Vienna. "The only way in their mind is to subdue the US shale producer."

Opec accounts for a third of the world's oil sales.

[Champion Jack]

1. Crash Baby, Crash

[still_one]

2. They will figure out something to justify it either way

[Thinkingabout]

3. Dropping oil prices is part of the plan to choke Russia, Iran and ISIS.

Less money for ISIS to purchase arms, etc, deeper tightening on Iran and choking Russia for their moves in Crimea.

[AverageJoe90]

7. And I'm sure they don't like Iran.....they're Shias, after all.

But the Saudis have nothing against Russia's moves in Crimea, and there's evidence out there suggesting that persons in the Gulf States may have been heavily involved in funding ISIS in the first place. No, this is starting to look like it may have been targeted against US instead; there are already concerns about how it may seriously affect domestic energy production, perhaps especially of green technologies. And we all know how Big Fossil has been dreading the arrival of clean energy for years now.

[CJCRANE]

12. It doesn't affect ISIS. They're selling stolen oil for less than that anyway.

They didn't pay for the exploration or infrastructure so everything they get is profit, even if they sell at $20 a barrel.

[Thinkingabout]

13. I am aware the cost of producing the crude is nit an expense to ISIS, with the price going down

On OPEC, etc they will be getting less than before. It is affecting Iran and other sanctions are hitting Russia and Iran, but to have OPEC cut their delivery of production will only increase the need for the stolen crude from ISIS.

[former9thward]

4. Oil goes up and down.

When its going up people say we are at "peak" oil and soon the price will be $200 -300 a barrel. When it is going down people say shale oil is finished. Neither is true.

[RKP5637]

8. Quite true! It wasn't long ago the last drop of oil was soon to be pumped, now it's

the reverse. All games and numbers.

[hedda_foil]

5. I never could have imagined that I would ever, ever, EVER say this...

But thank you Saudi Arabia. Here's hoping their ploy pays off.

[AverageJoe90]

6. Given that this is Saudi Arabia we're talking about, I can't be so sure.

DO NOT trust the sheikhs; last time they pulled something like this was in 1973, and it didn't hurt the Soviets one bit(and I'm sure they wanted to!).
This is no time to celebrate right now. For all we know, this could end up benefitting both Putin's Russia AND Iran, and end up hurting us.....in fact, I'm already starting to suspect that it is(it may already be affecting green policies here at home).

Let me repeat myself again: do not trust these fucking Wahhabis.

[hedda_foil]

9. Agreed.

The Saudi Wahabists have been responsible for so many atrocities in their region and the West, they should never be trusted, much less celebrated.

[RKP5637]

10. It could have a huge affect on green policies IMO in terms of lowering the priority and

funding. Doing the right thing in this country is often difficult if there are cheaper paths to be found. Then, down the road, it will be a panic again.

[Stardust]

11. Why doesn't Canada refine its own tar sands?

[FLPanhandle]

14. And a kill shot to alternative energy sources too.

Hard to be competitive with cheap oil.

Eventually we have to get off fossil fuels and this just will delay then inevitable while pumping lots more CO2 into our atmosphere.