We Will Never Run Out of Oil
2006-05-07 19:41 - Links
What will happen as the supply starts to diminish? First we would expect to see some wells run dry and either be replaced with new wells that have higher associated costs or not be replaced at all. ... When the price of gasoline rises, people naturally buy less of it; the amount of this reduction being determined by the amount of the price increase and the consumer's elasticity of demand for gasoline.
It really gets me when people think they're clever for saying that we'll just do something else when the oil runs out. Unfortunately I haven't managed to dig up a link, but the fact remains: Petroleum has an amazingly high energy density. It's so chock full of energy that it's a winning game to spend energy to pull it out of the ground, process it, and ship it around the world for people to burn.
Nothing else comes close. Some "renewable" sources like hydroelectric, wind, and so on are also a winning game in the long term. But nothing comes close to the efficiency and abundancy of oil. It's simply not enough to say "when the oil is too expensive, we'll just buy something else!" The problem with that assumption is that there is simply no alternative that provides so much energy for so little input. Major economic models will crumble without such a source of energy. And that's a problem for everyone in the modern world.
