Thought this was always a fun topic for those unexposed. In actuality, however, it's true. The world's oil supply will never run out. By never, I don't mean 'not soon.' I mean a much stronger sense of the word – much like for as long as the solar system exists and the Earth is around, oil will be physically present.
This of course runs counter to environmentalist propaganda and intuitions. Time and time again, mathematicians have predicted that the Earth will run out of oil in an x number of years; x being a very small and finite number, such as 20, or 50. Many years have come and gone, and all that these mathematicians have realized is that in order to preserve their predictive credibility, they should make predictions that outlive their existence. Current oil supply predictions typically range anywhere from 30-60 years, depending on which environmental NFP one consults.
However, it is obvious this pessimistic prediction will never come to fruition. Additionally, it doesn't take a genius to figure out why. Anyone with an economic intuition has a right to roll their eyes at the redundancy of this passage – but for those who don't yet know, you soon will.
Simply put, the fallacy to having the world oil supply run out is attributed to the fixation of the rate at which oil is consumed. Mathematicians believe they can predict the rate at which oil will be used. Simply put, as the finite world oil supply lessens, supply will (by definition) decrease. As supply decreases price will increase as quantity supplied will be reduced. This trend will continue until it no longer becomes a viable option to use oil or natural gas as energy sources. As relatively expensive as hybrid or electric cars may be, a sufficient hike in gas prices will eventually deem even electric cars (with current market prices) relatively inexpensive. Once this relatively small amount of oil is left on the planet, using oil will simply be too expensive of an option as any energy source.
Therefore, despite the environmental damage continued usage of oil and natural gas can cause, rest assured that the Earth will never run out of oil.
I really like your post, here. Curious, though: what does it matter that oil's still around if we won't need it anymore? I think you're making the point that the value of oil will be just a memory, and that the use of oil right now isn't an issue since it'll always be around. Does it really matter, though? I don't think it'll affect the processes of the Earth whether or not there's oil sittin around.
ReplyDeleteActually, this is only half true. I know much about the topic and find it interesting myself. But under one condition will it actually run out:
ReplyDeleteFuture demand for oil must decrease to the point that oil is free. This would go to say that once we no longer rely on oil, we will run out. You are correct to say environmentalist propaganda is incorrect. But don't let them catch you on this.
Maybe environmentalists just needed to specify: our need for it will run out. In future years I truly believe more sources of renewable energy will surpass the demand of traditional oil, so yes the need won't be as great and yes there will still be some leftover. I like your post too Jensen, but I think people use that line as a way to lower our dependency on oil immediately, maybe not in such a literal way. It grabs the people's attention ha.
ReplyDeleteI'm not sure that environmentalists, which you refer to some distain I suspect, are unaware of this simple economic argument. Rather the issue seems to suggest that assuming a constant we have this much oil left.
ReplyDeleteWhether or not the world's oil supply will run out should not be the most important issue. What really matters is that the burning of fossil fuels has negative effects on our environment and is detrimental for our health and the future of the world.
ReplyDeleteThe mathematicians predict the future of oil consumption in the sam way as you do when you say "as the finite world oil supply lessens, supply will (by definition) decrease". They are both educated guesses. I think that the answer lies somewhere between both of your predications. Simply put, the world will either run out of oil because of high consumption or continue to have oil because of new technologies/ conservative usage.
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