Why Gas Got So Expensive (It’s Not the War)

Why Gas Got So Expensive (It’s Not the War)

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Writing by Sam Denby and Tristan Purdy
Editing by Alexander Williard
Animation led by Josh Sherrington
Sound by Graham Haerther
Thumbnail by Simon Buckmaster

[1] https://www.eia.gov/outlooks/steo/data/browser/#/?v=6&f=M&s=0&start=200201&end=202312&map=&linechart=~PASC_OECD_T3&ctype=linechart&maptype=0 
[2] https://www.politifact.com/factchecks/2022/mar/10/facebook-posts/yes-oil-companies-are-reporting-record-breaking-pr/
[3] https://www.iea.org/data-and-statistics/charts/global-investments-in-oil-and-gas-upstream-in-nominal-terms-and-percentage-change-from-previous-year-2010-2020
[4] https://www.statista.com/statistics/1212157/capital-expenditure-of-exxon-mobil
[5] https://www.statista.com/statistics/561591/bp-capital-expenditure/
[6] https://www.statista.com/statistics/561546/shell-capital-expenditure/
[7] https://www.statista.com/statistics/1212180/capital-expenditure-of-chevron-corporation/
[8] https://www.rystadenergy.com/newsevents/news/press-releases/shale-getting-stingy-reinvestment-rates-in-the-US-hit-historic-lows-in-Q3-shaping-record-free-cash-flow/
[9] https://www.theatlantic.com/science/archive/2022/01/oil-prices-clean-energy-investments/621161/
[10] https://novelinvestor.com/sector-performance/
[11] https://www.statista.com/statistics/580711/sandp-500-returns-by-sector/
[12] https://finance.yahoo.com/news/the-real-reason-gas-prices-are-so-high-163554412.html
[13] The Quest: Energy, Security, and the Remaking of the Modern World – Daniel Yergin

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50 Responses

  1. h0ser says:

    Sad Story. I hear when the price of oil went negative, Chevron had to lay off a couple of their congressmen

    • Novalone says:

      *pay off

    • Keoki Higa says:


    • Planefan 08 says:

      @Diego Bert Because it’s not anymore, that’s the point. Like it or not, people are switching and quickly to the (now much cheaper) renewable options available. Waah, oil is essential. Right now that’s only fully true for aviation fuel. People run additive manufacturing using compostable plastics made of corn biowaste, heat and cool their buildings with electric heat pumps, and make hundreds per month selling their excess solar power to the grid while either taking the bus (electric) while driving their electric car (if they bother with a car) for a few dollars of maintenance on occasion. When solar’s low, the wind tends to blow but car batteries and standard storage do the trick perfectly well.
      And this is in a very, very oil-heavy area with plenty of people who don’t give a crap about the environment. They don’t care about that, yet even they realize it’s a losing game to not go renewable, because it’s more profitable. Go bankrupt trying to continue a mass extinction if you’d like.

    • Hillarys Emails says:

      Hahaha! That was a perfect quip! ♥

  2. Michael Walsh says:

    As a young pilot training for a career in the airlines, I find this a bit scary. There are no good alternatives to kerosene for large aircraft. Hydrogen may become a possibility, but it’s at least 10 years out. Higher fuel prices probably means less demand for flights and fewer jobs for pilots. Not necessarily a bad thing for the environment, just potentially a bad thing for me.

    • Tyler Balsam says:

      With the extreme pilot shortage as it is, I feel like it should be alright in the end. Though hopefully aviation goes through its “upgrade transformation” period soon.

    • Emil Josey says:

      @Thomas Hazell but we have the green hydrogen we can work on

    • Carlos Juarez says:

      That’s the point.
      Our owners want to stop transportation.

    • clray123 says:

      @Deep_Blue you’re not up-to-date, it’s no longer called “global warming” but “climate change”.. the reason being that the actual data no longer supports the “warming” part

  3. Adam Place says:

    One thing to note: there’s always been “fracking” (short for “fracturing”) in the oil industry, long before shale oil was possible. It’s just back then they used explosives (often nitroglycerin) instead of water. It would be more correct to use “hydrofracking” when talking about shale oil.

    I know it’s a minor point, but saying that fracking was what made shale oil extraction possible is a bit misleading. Fracking makes all oil extraction possible, it’s just hydrofracking that works on shale.

    • Nuwantha Kumara says:

      fracking vertically existed before. horizontal drilling also existed before. what make shale boom possible was fracking and horizontal drilling combining together. they used modified water and sand mixture with additional stuff that was secret to each company to do fracking. us was super luckey because useable gas percentage of their reserves were higher than other reserves around the world. there is a great video at MIT youtube channel describing this.

    • Javier Salcedo says:

      “saying that fracking was what made shale oil extraction possible is a bit misleading” – misleading is the whole point

    • Just Aguy says:

      Hydraulic fracturing was in use in the 70’s actually. It was used prior to shale exploration to increase flow in less permeable (but still somewhat) formations. The use of propants advanced it to be useful for more impermeable formations.

    • Tinil0 says:

      This is a completely fair quibble

    • salty roe says:

      @Tommy Maddox it’s economics and development. As oil prices go up one can spend more money on innovation and extraction.

  4. Kim Jong-un says:

    Not just Azerbaijan, another big Caspian natural gas country is Turkmenistan. Turkmenistan is so rich in natural gas, that for a long period of time, gas, electricity, and water were all free of charge. They also used that wealth from all the natural gas to build tons of marble structures in the capital city Ashgabat (they actually have a Guinness World Record for it). Under late leader Saparmurat Niyazov aka Turkmenbashi, he built a marble monument honoring the country’s neutrality with a spinning golden statue of him at the top. It spun so that it would always be facing the Sun, symbolizing that his era was the golden era. Like Azerbaijan, Turkmenistan has pipelines connecting its natural to neighboring countries like the Trans-Afghan pipeline connecting Turkmenistan through Afghanistan and Pakistan to India and the Central Asia-China pipeline connecting Turkmenistan to Xinjiang. As part of the pipeline from Baku through Turkey at 6:00, a subsea pipeline has been proposed to connect Azerbaijan to Turkmenistan. Because of the natural gas, Western leaders aren’t so keen on criticizing the Turkmen and Azerbaijani leaders when compared to criticizing me. Why? Because we’re not rich in resources they want

    Back in the 70s when the country was still a Soviet republic, the Soviets were drilling in the northern portion of the country looking for an oil field. When they found a natural gas pocket, the drill suddenly collapsed into a crater. Because of the concern of poisonous gases being released, they decided to set it on fire….that fire is still burning to this day. And the problem of poisonous gases being released is still an issue, thus in addition to saving the environment it’s been decided to seal the crater. As cool as the crater nicknamed the Door to Hell is, it’s not so cool when you have health issues because of it like the locals

  5. woodman_victory says:

    I think there may be a misrepresentation of the wells with fracking. The companies may have permits for the wells but with the advances in fracking technology you can use one wellhead and bore out in multiple directions both horizontally and vertically making multiple wellheads redundant.

  6. MdKLiTHiuM says:

    19:00 you summarise the situation perfectly. Turning profits now via scarcity and encouraging the switching to cheap (by comparison) renewables is the strategy. The funny part is, many of the Oil & Gas companies are now investigating in renewables as well. They are playing both sides.

    • Freedom Crusader says:

      @Vyl Bird
      Oil companies like Equinor who specialize in offshore production are using their existing infrastructure to be the largest developers of windfarms on sea.
      Their infrastructure is literally the exact same as is needed to build transformer stations and windmills offshore.

    • Jspice Cue says:

      @Paul Elderson its still anti poor. poor countries with poor consumers werent part of the equation

    • CrazyMaybe says:

      Everyone is praising this but us in the country are getting fucked. I can’t buy an electric car when there are no chargers near me. Fuck global warming why are we going from a system where you “charge” your car up with gas in 2 mins to a system where it takes an entire night unless u spend ludicrous amounts on a fast charger at home which STILL can take hours I beleive the minimum is STILL a whopping 30 mins. I have heard so many stories of people with electric cars suddenly having a reason to go away from the city and they find oh shit the car does not have the power to make it there and back and there are no charging stations on the way… now they are paying for a fucking Uber when THEY OWN A CAR!!! Electrical cars are not competitive yet we need insentives to lower the gas prices to save our lower middle class some of us can’t afford a car that is newer than 10 years and some of us have no chargers where we live!!!

  7. Jeff Wilson says:

    This was a pretty good analysis and history of oil volatility, but I’d be cautious about the final conclusion and more than cautious about prediction drawn from that conclusion. Two factors not mentioned in this video or anywhere I’ve seen in the comment section are:

    1. The oil industry, like everyone else, has been affected by general supply chain issues and inflation, which has driven up the price of tapping new wells. Effectively this makes supply expansion at the moment more costly than it otherwise would be.

    2. Oil companies also took on a ton of debt in the last two years, so increasing profits to both pay that down and pay shareholders is a higher priority for them at the moment, rather than expansion.

    Neither of those factors are small, and they both point to the current situation being a temporary recovery from the pandemic. I’m not saying this video is wrong and we will definitely go back to the old way, but trying to predict the future of the oil market is risky business. Nobody knows what’s going to happen, and the incentives guiding today’s market can change in unexpected ways tomorrow.

    • Mad Binxx says:

      “I love being dependent. i love that I can only get to work if a huge industry decides to sell me oil at a price I can pay for. Its good that they can arbitrarily budget money out of my pocket then yell at me for not being a good budgeter. Hrr. The billionaires needed to acquire debt or they wouldnt be able to pay for anything. Like me. The guy who has to beg a bank for a house because the employer class doesnt want to pay me enough.”

      Oil would be under a dollar if there was a free market. But they lock the door and lie to to when they say the supply is lessened. Its not a monopoly when your friend owns the other oil company.

    • Korakys says:

      Yes I have to agree; trying to forecast the oil industry even five years out has traditionally been futile. Once the independent frackers have finally recovered their costs from the last decade they will soon start to pump more. Hard to say if that’s in 2 years time or 5 years though.

  8. Lee Fields says:

    Great breakdown and Ive been telling people about this for a couple of months now. Basically, The high peak we saw after the first few weeks this all kicked off was the point they realised they had taken as far as they could, so the slight adjustment back to levels we have see sustained over the last few weeks will very much be the new norm. Because, we all just accept it now with little fuss. I ran the numbers on my 55mpg Ford Galaxy, where we do two tanks a month V’s the cost of running an electric vehicle (even at the new high KWH) and its nearly 1/4 the cost per month. Basically, the saving would pay the majority on monthly lease on a brand new EV (lower band). So yeh, they have just accelerated their own demise but have done it on their own terms for maximum short-medium term profit.

    • BoLoYu says:

      @Jay Godfrey Taxes on fuel alone generate almost $120bln a year.

    • BoLoYu says:

      @Ghost2Coast Nobody puts new parts in an old car, you buy cheap refurbished parts for a fraction of the price.
      If that is true, then why do new EV cars cost so much? Why do the parts cost a fraction of the complete car? It seems to me that you got scammed by Elon.
      Also the main cost of EV cars is the battery pack, which can’t even be easily replaced in most EV cars. The prices are not going down, they’re actually going up massively because many ingredients are in low supply and there is no relief in sight with new supplies.

    • BoLoYu says:

      @Dlisiouseverydayfrys Tesla brakes only last 2 to 3 times longer than in a normal car. It’s also quite cheap to replace brake pads.
      EV cars are much heavier than normal cars, this affects the ride negatively. You will notice it especially in cornering, you must just drive straight all the time.

    • BoLoYu says:

      @Martin Owens EV cars have brakes just like normal cars, they just use them less because they can use the engine more to brake.

    • Ghost2Coast says:

      @connor bingel your car will not last you another 10 years lmao. When you buy those 2k junk buckets they last 2 years tops before the repairs start costing more than the value of the car. You already started dumping money into it. Or you stick a bunch into it for suspension, tires, minor engine repair and then the transmission blows and you’re stuck putting a 3k transmission in a 3k car. EVs have lower maintenance costs that when added up over 10 years would cover the cost of a new battery, and batteries will be much cheaper in 10 years

  9. Brandflakess says:

    One interesting thing i have head is that some of the big oil companies in Houston have been buying up leases and old depleted wells off the Houston coast, like 20-30 miles offshore. Most likely not to drill again, but to use the already in place pipelines and pump CO2 back in to the ground from the refiners and power plants in that area, Im sure in the coming years there will be a higher CO2 tax that will be in place and incentives companies to do this.

    • letsburn00 says:

      @shsal110 You can breach the reservoir Cap, but that’s why we cement the holes. It’s pretty stable.

      Also, the deposits are very deep. Hundreds or thousands of Meters of depth down. Gas takes a long time to move through that much rock.

    • shsal110 says:

      @letsburn00 Would it be that simple? Yes, the reservoir formation was stable over millions of years, but since humans have changed the structure & pressure by extracting the oil/gas, wouldn’t further analysis need to be done?

    • Tao Liu says:

      @Trucker2019 That’s not how the tax works. You’re not being taxed for breathing, you’re being taxed for excessive release of CO2 into the air, which by all definitions is a form of air pollution.

    • MegaRad says:

      @Trucker2019 that’s not any different from property tax, income tax, inheritance tax, any tax ever.

  10. David Stewart says:

    “ignoring the countless externalities” seems like a good summary of most of this

    • JayDee Bishop says:

      @Alex Palacios Santos but hey, the food for thought part is what brings me here. The “Persuation” artist part is so obvious I’m not even mad.

    • JayDee Bishop says:

      I dig!

    • Alex Palacios Santos says:

      he circles back at the end. but full discussion of the very obvious externalities of the oil industry would change the topic of the video too much.

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