Tar Sands are now of Equal Value

http://www.economist.com/node/17959688


This is an interesting article relevant to Marx's points on the magnitude of value:
"What exclusively determines the magnitude of value of any article is therefore the amount of labour socially necessary, or labour-time socially necessary for its production" (Marx, 129)


As we all know oil prices are increasing as is the demand for oil. American (or the World for this matter) dependency on oil is by means declining. Until recently Canadian tar sand oil was not economically feasible to extract. It was unprofitable due to the lack of technology. The "labour socially necessary" for tar sand oil could not compete with OPEC and other major sources. Due to recent innovations the labour time is equal that of the competition thus making tar sands of equal value. Innovations are not the only contributing factor for this equalization (supply and demand principles are attributes as well). Although, they are significant in relevancy to Marx's "magnitude of value."


Interesting Quotes from Article:
"After a brief hiatus during the economic downturn, world oil consumption is rising again, pushing the price of a barrel towards $100. By 2035, believes the International Energy Agency (IEA), demand may reach 110m barrels per day (b/d), about 20% more than in 2009. For those who exploit the tar sands, which contain the world’s second-largest trove of oil, this is a welcome forecast."


"The cost of production has fallen: a few years ago most firms thought the break-even price was $75 per barrel, but now companies such as Shell say new developments are economical at $50."


"At 173 billion recoverable barrels, the tar sands are worth $15.7 trillion at today’s price."