Chicken Little

Michael Fumento on oil:

What about the future? According to a just-released Energy Information Administration report oil production will continue to steadily increase until the last year of the projection, which is 2025.

But oil consumption will continue to increase. This will be partly from population growth, albeit growth that’s leveling, and partly from worldwide improvements in living standards. Even so, if consumption continues to increase at an average rate of 1.4 percent a year and not a single new drop is found, we still won’t exhaust proved reserves until 2056 according to a 2003 National Center for Policy Analysis (NCPA) report.

Further, the “nice aspect” of high oil prices, if those driving around in gas-slurping SUVs will forgive the term, is that they are the greatest motivator for discovering and exploiting new reserves.

This includes Canada’s oil sands, containing a tar-like substance convertible to oil. These hold an estimated 1.7 trillion barrels of petroleum, of which 255 billion barrels is currently considered recoverable. Oil sands worldwide could provide more than 500 years of oil at current usage rates, calculates the writer of the NCPA report, David Deming. He’s a professor of geology and geophysics at the University of Oklahoma.

Maybe the sky isn’t falling so fast, after all.