Saturday, June 09, 2007

Peak Oil

Every oil field has a finite supply and its output reaches a peak and then declines. It is sensible to believe that the collective supply of all the world’s oil fields would do the same. Of course, new oil discoveries change the calculation. But, it is impossible to know how much oil remains undiscovered.

All my life I have been hearing about the end of oil. In the 1970s the prediction was that we would run out of oil around the turn of the century. So, we should be freezing in the dark by now, with our useless vehicles all abandoned. But, with each new oil field discovery that day of reckoning keeps getting pushed back.

Is the end upon us? Here is a quote that provides an interesting perspective on the timing of this crisis:

“The question of the possible exhaustion of the world’s oil supply deserves the gravest consideration. There is every indication that we are face to face with this possibility.” - Scientific American, 1913

It seems that the end has been near for a very long time.


At July 30, 2007 1:22 AM, Blogger Market Factors said...

Peak Oil (production) only probably exists in the USA where we are purposely not drilling for oil we know we have. Instead we are making ethanol and heading (slowly) towards electric cars. Not exactly rational, but that does seem to be what passes for the "oil market" in the US.


Post a Comment

<< Home