Final answer:
In the oil and gas industry, costs of finding the resource can be influenced by factors such as rising oil prices, new drilling technology, geological challenges, major new discoveries, and fluctuations in global economic and political landscapes.
Step-by-step explanation:
The oil and gas industry is influenced by a variety of factors. For instance, when the price of oil rises, it may become economically viable to pursue more expensive extraction methods. Innovations like new oil-drilling equipment that is cheaper and requires fewer workers can also shift the industry's landscape. Additionally, geological challenges play a role. As easier resources are depleted, companies are forced to turn to harder-to-reach reserves.Looking at historical data, such as in the case of the oil discoveries in the North Sea, we can observe patterns of brisk discoveries followed by a decline. It is important to note that of the locations known to have oil, only about 10% of exploratory wells are successful, making the industry both costly and unpredictable.Technologies like fracking and tar sands processing have extended the life of petroleum supplies. However, they come with environmental concerns and are still subject to the same finite supply issues that will eventually increase oil prices. Other factors, such as major discoveries (e.g., off the coast of Norway), economic slowdowns in oil-using nations (like Japan), conflicts in oil regions, energy efficiency measures, the rise of alternative energies like solar power, and demand increase from new products like plastics, all impact the industry as well.