Thursday, June 17, 2004

We Will Never Run Out Of Oil

We Will Never Run Out Of Oil

George Will has a fine column this week about how oil is only technically a limited resource because it will become cost-inefficient to collect before we ever run out and since we're a market-based society, we will never run out of oil - we just won't want to pay for it anymore.
Excerpts from The Washington Post
Oil: How Bad Do You Want It? by George Will
Sunday, June 13, 2004

Of course, oil supplies are, as some people say with a sense of profound discovery, "finite." But that distinguishes oil not at all from land, water or pistachio nuts.

Russell Roberts, an economist, says: Imagine that you love pistachio nuts and are given a room filled 5 feet deep with them. But you must eat them in the room and must leave the shells. When will you have eaten them all? Never. Because as it becomes increasingly difficult to find nuts amidst the shells, the cost of the nuts, in time and effort, will become too high. You will seek a substitute -- pistachios from a store, or another snack.

Tim Appenzeller, writing in National Geographic, says tar-sand deposits in Alberta "hold the equivalent of more than 1.6 trillion barrels of oil -- an amount that may exceed the world's remaining reserves of ordinary crude." Alberta, a future Saudi Arabia? Perhaps. Full-throttle production of oil from tar sand is not economical. So far.

MIT's [M.A.] Adelman notes that even before 1800 -- before the coal-fired Industrial Revolution -- Europeans worried about exhausting coal supplies. "European production actually did peak in 1913 and is nearly negligible today." Billions of tons remain beneath European soil but are uneconomical to remove. So far.