1.5 mil b/d!
Times 365 days a year times however many years - and it starts looking cheaper huh?

It's 1.5 million barrels per day, at a cost of 600,000$ per barrel per day.  Thus, assuming the added production continues for five or six years, the cost would come down to roughly 300$ per barrel, still an incredible amount by todays standards, but perhaps not completely unreasonable given the direction the price of oil is heading.  Also, when considering that the 900 billion dollars is a subsidy of the oil industry, and the fact that our government already subsidizes oil a great deal, this may not be unreasonable at all.  With all the hidden costs associated with the war in Iraq, tax cuts to the oil companies etc.  who's to say that the real cost of oil isn't more like 300$ a barrel.  

This is exactly why production peaks. It is not economic to  raise production after peak production. The energy cost is to o high for it to make sense. Oil production will fall.

Hi Jeffrey

I'm wireless now, I can post!

Anyway, we've gone around about this Russian production thing and I'm coming more and more to your point of view. That TNK-BP statement really impressed me as well. Even if Rosneft teamed up with some big foreign investment bucks now, depletion would still outrace the long lead times for production in the outrageously difficult geological areas where development would have to take place. In general, see my Russian production story.

It may stay level this year (and maybe next) but it's definitely all downhere from there. I truly wonder if people here at TOD know now important this really is. Russia bailed the world out in the last four years but in the next four, even if Saudi Arabia gets to 12.5/mbpd, any gains might be offset by Russia. As usual, running harder to stay in place.

best, Dave