> It can't be priced below the cost of extraction

"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.

For oil the cost of extraction isnt as simple as you seem to imply. The diversity of what oil can be used for and the value of those things, far exceed to the cost of extracting it. No other material is as valuable and diverse as oil.

> The diversity of what oil can be used for and the value of those things, far exceed to the cost of extracting it

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.

The cost needs to be divided out on other things than just for energy, thats the point.

> The cost needs to be divided out on other things than just for energy

A barrel which costs $50 to produce will cost $50 to produce regardless of its use. There is no "dividing out" costs.

Of course there is as the cost goes to other things than for energy which is the comparison. Its not $20 per area oil can be used, its $20 divided out on all the things its used for.