The Carbon Tracker Initiative says the break-even price for these fields is likely to be $120 a barrel. It is much the same story - for different reasons - in the Arctic 'High North', off-shore West Africa, and the Alberta tar sands. The major oil companies are committing $1.1 trillion to projects that require prices of at least $95 to make a profit.
The International Energy Agency (IEA) says fossil fuel companies have spent $7.6 trillion on exploration and production since 2005, yet output from conventional oil fields has nevertheless fallen. No big project has come on stream over the last three years with a break-even cost below $80 a barrel.
"The oil majors could not even generate free cash flow when oil prices were averaging $100 ," said Mark Lewis from Kepler Cheuvreux. They have picked the low-hanging fruit. New fields are ever less hospitable. Upstream costs have tripled since 2000.
"They have been able to disguise this by drawing down legacy barrels, but they won't be able to get away with this over the next five years. We think the break-even price for the whole industry is now over $100," he said.
A study by the US Energy Department found that the world’s leading oil and gas companies were sinking into a debt-trap even before the latest crash in oil prices. They increased net debt by $106bn in the year to March - and sold off a net $73bn of assets - to cover surging production costs.
The annual shortfall between cash earnings and spending has widened from $18bn to $110bn over the last three years. Yet these companies are still paying normal dividends, raiding the family silver to save face.
This edifice of leverage - all too like the pre-Lehman subprime bubble - will surely be tested after the 30pc plunge in Brent crude prices to $78 since June.
Prices could of course spike back up at any moment. Data from the US Commodity Futures Trading Commission show that speculators have taken out big bets on crude oil futures. NYMEX net long contracts have reached 276,000. This is a wager that the OPEC cartel will soon cut output.
Yet there is little sign so far that the Saudis are ready to do so on a big enough scale to make a difference. JP Morgan expects US crude to slide to $65 over the next two months, a level that could lead to a "cumulative default rate" of 40pc for the low-grade energy bonds that have financed much of the fracking boom, if it drags on for two years.
Gordon Kwan from Nomura says OPEC (or at least the Saudi-led part) is "engaged in a price war with US shale producers" and will not rest until it has inflicted serious damage. He thinks Saudi Arabia will deflate US crude prices to $70 and hold them there for three to six months, targeting high-cost shale plays in the Bakken and Eagle Ford fields.
OPEC has a clear motive to do this. The US has slashed its net oil imports by 8.7m barrels a day (b/d) since 2005, equal to the combined exports of Saudi Arabia and Nigeria. Yet this game of chicken could be dangerous. There will be collateral damage along the way.
Deutsche Bank says the oil price needed to balance the budget is $162 for Venezuela, $136 for Bahrain, $126 for Nigeria, and over $100 for Russia. Algeria is extremely high, and already sliding into political crisis. Any one of these countries could fly out of control.
Nor is it certain that $70 oil prices will in fact stop the US juggernaut. Shale wildcatters have hedged much of their production by selling forward into 2015 and 2016. They can withstand a short hit. Citigroup's Edwin Morse says shale critics are "wildly underestimating" the resilience of key US fields.
Yet the greater question is whether any of the world's oil projects in high-cost regions make sense as China and the US agree to slash carbon emissions. The accord signed between President Barack Obama and China's Xi Jinping last week - if ratified by the US Congress - has devastating implications. Oil companies have booked vast assets that can never be burned.
These are the world's G2 superpowers, the two biggest economies and biggest polluters. Their deal marks the end of a bitter stand-off between the rich nations and the emerging economies that has dogged climate talks for years. It isolates the dwindling band of hold-outs, and greatly increases the likelihood of a binding global accord in Paris next year.
The IEA says that two-thirds of all fossil fuel reserves are rendered null and void if there is a deal to limit CO2 levels to 450 particles per million (ppm), the target level agreed by scientists to stop the planet rising more than two degrees centigrade above pre-industrial levels.
Chevreux's Mr Lewis said the fossil fuel industry would lose $28 trillion of gross revenues over the next two decades under a two degree climate deal, compared with business as usual. The oil companies would face "stranded assets" of $19 trillion.
The Obama-Xi deal does not in itself secure the two degree goal but it does commit China to peak CO2 emissions by 2030 for the first time. China will raise the share of renewable energy by 2020 from 15pc to 20pc, a remarkable target that can only be achieved by breakneck expansion of solar power.
China is already shutting down its coal-fired plants in Beijing. It has imposed a ban on new coal plants in key regions after a wave of anti-smog protests. Deutsche Bank and Sanford Bernstein both expect China's coal use to peak as soon as 2016, a market earthquake given that the country currently consumes half the world's coal supply.
The US in turn has agreed to cut emissions by 26-28pc below 2005 levels by 2025, doubling the rate of CO2 emission cuts to around 2.6pc each year in the 2020s.
Whether or not you agree with the hypothesis of man-made global warming, the political reality is that the US, China, and Europe are all coming into broad alignment. Coal faces slow extinction by clean air controls, while oil faces a future of carbon pricing that must curb demand growth far below what was once expected and below what is still priced into the business models of the oil industry.
This is happening just as solar costs fall far enough to compete toe-to-toe with diesel across much of Asia, and to reach "socket parity" for private homes in much of Europe and America. The technological advantage is moving only in one direction only as scientists learn how to capture ever more of the sun's energy, and how to store the electricity cheaply for release during the night. The cross-over point is already in sight by the mid-2020s.
Mr Lewis said shareholders of the big oil companies are starting to ask why their boards are ignoring so much political and technological risk, investing their money in projects that are so likely to prove ruinous, and doing so mechanically as if nothing had changed.
"Alarm bells are ringing. Investors can see that this is unsustainable. They are starting to ask whether it wouldn't be better to return cash to shareholders, and wind down the companies," he said.
Great fortunes were made in 18th Century in the British canal boom. The network of waterways halved coal prices and drove the first leg of the Industrial Revolution. Yet you had to know when the game was up.
The canal industry was on borrowed time even before the Liverpool and Manchester Railway first opened in 1830, unleashing the railway mania that entirely changed the character of Britain.
These historic turning points are hard to call when you are living through them but much of today's the fossil fuel industry has a distinct whiff of the 19th Century canals, a pre-modern relic in a world that his moving on very fast.