No, we will never run out of oil .. BUT ... we have already passed the point where the oil can be pumped *cheaply* at a rate to satisfy the world. Incremental new oil is getting more and more expensive.
“No, we will never run out of oil .. BUT ... we have already passed the point where the oil can be pumped *cheaply* at a rate to satisfy the world. Incremental new oil is getting more and more expensive.”
you better tell that to Brazil...they just discovered a vast amount of oil last week.
Prices are driven by:
1. refinery capacity
2. Speculation
Iraq alone has huge reserves that are cheaper to tap than Saudi Arabia - problem is that there are just not enough wells drilled at this moment to get it out of the ground. Texas has about 1 million drilled wells, Iraq has less than 10,000.
Saudi Arabia lifting costs (cost to get the oil out of the ground): $2/barrel . Iraq - 50 cents / barrel.
The new Brazilian oil is going to be expensive to get out, but there is plenty of easy to get to oil off the west coast of Florida, just waiting for a jack up rig.
Need I say "good"?
From a strictly competitive point of view...
When the price gets high, only those economies (capitalist) will be able to compete for the comodity - this will either cause the non-capitalist states to change their system or do without.
Your statement is exactly what I meant when I said "running out of oil" makes no sense if you understand economics. New oil DOES get more expensive, but if the price supports it, the development will happen. And, we know, competition in development brings prices back down.
Yes we have.
That occured about 1925. It's become increasingly expensive to recover the worlds oil since that time.
The world is awash in oil, but by 1940 the expense to recover it began to place a drag on the use of oil.
Just imagine where we as a nation would be if only the oil price was still the same as it was in 1905.