A new Business Week article starts with an interesting observation:
Not many people think of the Netherlands as oil country, but a billion-barrel field lies under a nine-mile strip of grazing land along the Dutch-German border. When oil prices cratered in the 1990s, Royal Dutch Shell and ExxonMobil shut the Schoonebeek field down. Company executives reckoned that its thick, hard-to-extract crude wasn’t worth the trouble, even though only about 25% of Schoonebeek’s oil had been produced. The main evidence of the town’s petroleum past was an old-fashioned bobbing oil pump, known as a nodding donkey, which still stands in a parking lot near a bakery.
Now higher prices and technological advances are spurring a new joint venture ? to pump Schoonebeek’s reserves once more.
Imagine that: an increase in price is leading to an increase in the quantity of oil supplied. It?s as if basic economic principles were playing out. You know ? supply and demand.
