Out of Gas
I've been seeing a lot of information on internet about how the world oil supply is running out and we are heading into a new dark ages. So I started reading some more to form an opinion. The writings range from the above prophecy to 'no problem'. The doomsayers are a form of survivalists that believe the end of civilization is at hand and they are the only ones that will be prepared. The other side simply says the oil predictions about peak world oil supply are nonsense and there will be plenty of oil for the indefinite future.
First lets tackle the doomsayers. The fact is that prediction about the future oil supply is an inexact science at best. Yes, it must be finite but finite can be a big number. I won't go into the details I've read from other sites but believe me, you can find people with creds that will hotly debate forward looking statements about oil resources. However, the doomsayers will have none of that: "Were running out, were almost out and were all going to die..." In addition, the doomsayers have a very static view of economics. They see things going exactly as they are until ..poof it happens, we run out of oil. In fact as oil becomes more expensive two things will happen. (1) People will use less of it. People waste gasoline now because even at 3+/gal it is cheap. When it's not cheap, consumption will fall. The more prices rise, the more consumption will fall. Isn't capitalism great. (2)Another wonderful feature of capitalism is that rising oil prices will spur innovation into alternative energy and energy efficiency. I think the doomsayers will be disappointed with the soft landing but they'll find another cataclysm to prophetize.
Now the don't worry be happy folks. It's clear that with Indian and Chinese economies growing at an explosive rate and their demand for oil growing just as fast, the global demand for oil is going to raise prices even if new resources are developed. The United States has set the example of one SUV per person , a 4000 sqr ft house, lots of appliances a second car etc... The people in the emerging economies want to have fun too and they need oil. Lots of oil. In the end the people in the US are going to have to scale back energy usage and the people in the emerging economies are going to have to scale back there expectations of how much energy they will be able to consume as their economies grow. In fact I do believe that life in the US will have to scale back to a lower energy profile because we will enter an era of expensive energy.
First lets tackle the doomsayers. The fact is that prediction about the future oil supply is an inexact science at best. Yes, it must be finite but finite can be a big number. I won't go into the details I've read from other sites but believe me, you can find people with creds that will hotly debate forward looking statements about oil resources. However, the doomsayers will have none of that: "Were running out, were almost out and were all going to die..." In addition, the doomsayers have a very static view of economics. They see things going exactly as they are until ..poof it happens, we run out of oil. In fact as oil becomes more expensive two things will happen. (1) People will use less of it. People waste gasoline now because even at 3+/gal it is cheap. When it's not cheap, consumption will fall. The more prices rise, the more consumption will fall. Isn't capitalism great. (2)Another wonderful feature of capitalism is that rising oil prices will spur innovation into alternative energy and energy efficiency. I think the doomsayers will be disappointed with the soft landing but they'll find another cataclysm to prophetize.
Now the don't worry be happy folks. It's clear that with Indian and Chinese economies growing at an explosive rate and their demand for oil growing just as fast, the global demand for oil is going to raise prices even if new resources are developed. The United States has set the example of one SUV per person , a 4000 sqr ft house, lots of appliances a second car etc... The people in the emerging economies want to have fun too and they need oil. Lots of oil. In the end the people in the US are going to have to scale back energy usage and the people in the emerging economies are going to have to scale back there expectations of how much energy they will be able to consume as their economies grow. In fact I do believe that life in the US will have to scale back to a lower energy profile because we will enter an era of expensive energy.
posted by hotair at 3:22 PM
3 comments
