We are depleting oil reserves at about 5 million times the rate they formed.[1] Corollary: oil price reflects an off-books depletion factor of roughly 5 million-fold. The price is vastly too low.
Our fossil fuel consumption translated to present total biomass production (NPP, or the "photosynthetic ceiling"), is a very substantial fraction of all plant growth, I believe about 40%. We currently account for 20% of NPP consumption without utilising biomass as fuel.[1]
The history of why extractive natural resources are costed on a labour-required basis only (and some very questionable economic and legal theories support this) is an interesting accident of history, religion, law, geology, business, oil, and more. I've been digging into that, though have further to go. The short answer is that we'd started using the stuff long before we understood its creation, and by the time we understood we pretended not to care.[2]
The history of oil price response to overextraction in particular is mesmerising, with the booms at Titusville, Spindletop, and East Texas especially. The latter saw price per barrel fall from a $1 target, to $0.13, and then further to $0.02/bbl, before the national (and effectively global) production quota system managed by, of all organisations, the Texas Railroad Commission, was established in 1931. That lasted until 1972, after which you may be aware oil's price fluctuated somewhat.[3]
Similar issues exist for other strategic minerals, as first grasped during WWII, leading to the creation of the Harbord List, now the U.S. Strategic Mineral Reserve.[4]
(Oil is also subject to strategic reserves. You may be aware of an incident involving the U.S. Naval Strategic Petroleum Reserve a few years back, the Teapot Dome scandal of the Harding administration.[5])
Until the early 20th century, only direct labour was considered as a cost of production.[6]
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Notes:
1. https://dge.carnegiescience.edu/DGE/Dukes/Dukes_ClimChange1.... See also https://redd.it/2cvap7 and https://redd.it/1x9maq
2. Partial expansion here https://redd.it/5w1zw3 and here https://redd.it/5rnjg0 In particular, the religion and Young Earth Creationist associations are fascinating.
3 Daniel Yergin, The Prize, chapter 13 generally, though also the history of monopolies and cartels: Standard Oil, As-Is Agreement, Seven Sisters, National Producers, OPEC. http://www.worldcat.org/title/prize-the-epic-quest-for-oil-m...
For oil price, BP's Annual Statistical Review. See:
http://static2.businessinsider.com/image/4defd684cadcbbe55e0...
Current report: http://www.bp.com/en/global/corporate/energy-economics/stati...
4. E.g., http://www.marketoracle.co.uk/Article33647.html
5. https://en.m.wikipedia.org/wiki/Teapot_Dome_scandal
6. Alexander Hamilton Church, Production factors in cost accounting and works management, 1910, p. 9.
https://archive.org/stream/productionfactor00churrich#page/8...
https://www.c2es.org/technology/factsheet/FreightTransportat...
Ocean transport is roughly 20x more fuel efficient per tonne-kilometer as overland trucking.
Rail is the new element, it's essentially dry ships, though aabout half the efficience of marine transit.
It's important to know that when considering the factor of 5 million you toss out there.
The cost is what's required to create it.
The price is what it exchanges for.
These are three independent attributes.
Generally, though, sustainability comes when cost <= price < value.
https://www.reddit.com/r/dredmorbius/comments/48rd02/cost_va...
The horrors of oil being all used up and energy cheaper than ever.
I asked you to complete the information required to back up the claim and you rejoined with some aside about how there were multiple ways to interpret one of the words in my question.
My framing is sloppy (because I only talk about the future value of oil rather than the cost of obtaining the equivalent), but I think the point survives it, because the value of oil would drop to the cost of obtaining the equivalent.
I'm not sure if you're aggreeing with me, disagreeing with me, or purple the unicorn umbrella ran ran syzzygy!!!
If you've got a specific question or point you'd like to make, please make it or ask it.
But to clarify, my statements above are made in all earnestness and as my best-faith effort to model and understand the world I see.
You?
Natural gas as feedstock to the Haber-Bosch process and coking coal in steel production, for reducing ore, are both much more formidable. They account for a large fraction the consumption of both (15% in the case of coal), and substitutes are difficult.
The story of where Earth's crustal iron comes from, when, and how, particularly as banded iron formations, is another interesting story.
For example, the Newtown Pippin: http://www.nytimes.com/2003/11/05/dining/it-s-crunch-time-fo...