I don't remember seeing any press release on this, but for several months now it has been possible to buy December 2015 futures on NYMEX. That's a full 8 years out. Prior to this it was only possible to buy futures 5 years out (CLZ12). Why is that significant? Conventional wisdom is that it takes about 5 years from discovery to commercial production in an oil development, so when you could only accurately price and fix your revenue five years out, you really couldn't hedge against a price drop. Even with oil at $90 a barrel, it was still risky (essentially a peak oil bet) to produce oil that would cost you $50, $60 or more a barrel. Now that it is possible to sell futures 8 years out (currently the CLZ15 is trading at $77/barrel), it becomes a much more conservative financial move to start a project with a projected cost/barrel to produce of $50. On the flip side, this distant future allows fuel consumers to better hedge against future fuel costs.
So, if there are alternatives or expensive-to-produce oil reserves out there, there seems to be less of an excuse than ever. Lots of alternatives claim to be profitable at $50/barrel oil (though I have my doubts based on simultaneously rising metal prices, etc.). If this is true, the ability to sell 2015 futures means there are no more valid excuses to getting those into production today. I've heard people talk about Canadian tar sands, or Colorado oil shale. If these really are profitable at $50/barrel oil, why aren't we seeing more projects starting up? Where are they? Have these people realized that the ability to produce Colorado oil shale at less than $50/barrel is in part predicated on $30/barrel oil as an input (hence a constantly sliding 40% differential on the value above oil that oil shale is profitable)?? Maybe I'm just being pessimistic, but show me the projects!