"Cost of extraction" is a fuzzy term. If it costs $100 to set up a well that lasts 10 years and $1 to pump 1 barrel of oil a year, then is the economic cost is around $11 per barrel (loosely estimated) and the marginal cost $1 per barrel.
This is how an existing well can price below the economic cost of extraction but above the marginal cost. It doesn't make sense to compete with them by setting up new pumps. But pumps last a long time, and there are a lot of pumps out there.
This is a statement about demand, not cost.
Nobody is saying oil is going to zero. And the cost curve for oil production varies greatly from well to well. Many wells are already extracting at total costs above price.
A barrel which costs $50 to produce will cost $50 to produce regardless of its use. There is no "dividing out" costs.
Supply, demand, and subsidies.
Supply, demand, subsidies and political stability of the country that produces it.
In short: oil prices are affected by many factors.
There is of course plenty of oil left but it is not the same cheap oil that we were used to last century where you basically stuck a pipe in a ground in a place like Texas and cheap oil would come out. Most of that oil is gone. Also, not all oil is created equally and some oil is a lot nicer to work with than other oil when it comes to refining it. Which is why the US still imports oil from the middle east. Refining is not free either obviously and actually uses lots of energy. Ironically, a lot of wind/solar is being used for that.
This is indeed not news. Oil investors have known this for some time and have been voting with their feet. Also, most EV owners are well familiar with the fact that the cost of recharging is peanuts compared to filling up a car with petrol/diesel. I'd say that 20$ is going to come down by 2-4x over the next 20 years.
Oil has unpaid for economic externalities, specifically climate change. This is not the same as a subsidy.
(The article also discusses some of the indirect subsidies that you're describing as a 'tired trope', but the main theme is economic stimulus that directly supports extraction, exploration, distribution, transport and consumption of fossil fuels).
https://www.vox.com/energy-and-environment/2017/10/6/1642845...
>Yet this fact, so inconvenient to the conservative worldview
Can you explain what "the conservative worldview" is for the readers? Sounds like the author has an obvious political leaning.
Precisely. Energy of all types receive subsidies, and oil receives fewer subsidies per unit of energy produced than other types of energy. And, in most advanced nations, it's taxed at extremely high levels on the consumer side.
We need to reduce our fossil fuel use, we get it. But this idea that we only burn oil because it's subsidized is bunk. Oil (and coal) is cheap, regardless.
If it wasn't for oil, then for what? Those chemical weapons that were never found? All wars that US starts (and 80 percent of all wars in the world are started by US) are either for oil, or other economic interests. "Spreading democracy" is just an excuse used by government's public relations division, but it is not even remotely true. There are many non-democratic countries, which US leave alone, because they have not enough natural resources or other wealth to be taken from them to pay the bill for war - Cuba is one such example.
You have a pretty simplified political view, my friend.
Iraq sells oil into a market; how did invading them "get us the oil"?
This assumes a perfectly competitive market, which is far from reality. Oil production is dominated by a cartel.
As a cartel can increase prices to maximise profitability, to a large extent, the price of oil is controlled by the price elasticity of demand.