In an earlier post I wrote that the idea that we'll ever "run out" of oil is absurd, because market forces will act to increase exploration and technological innovation as oil prices rise. Commenter TRE pointed out that we don't have to completely run out of oil before our economy will feel the effects of rising prices, and he's right of course, but I think his claim that we're already facing oil depletion is unsound. Alan Greenspan agrees.
Oil prices closed at a record of $54.76 per barrel on Thursday as fears about supplies in the United States and the possibility of attacks on oil pipelines in the Middle East have sent the price of crude to record levels in dollar terms.As the first paragraph notes, the main reasons oil prices are high today are fear and war, not depletion -- and even these prices aren't that high by historical standards.Greenspan, however, noted that even with the recent jump, energy prices are still only three-fifths as high, after adjusting for inflation, as they were at their all-time peak in February 1981.
He said this means that the overall impact on the economy should be lower this time around than during that period, when the oil shocks of the 1970s and early 1980s were enough to push the country into a series of recessions.
Greenspan said that so far this year, the rise in energy has probably trimmed the gross domestic product (search) by about 0.75 percentage point, far less than the shocks of two decades ago.
However, Greenspan warned, "Obviously, the risk of more serious negative consequences would intensify if oil prices were to move materially higher."
However, he said he believed that existing technology and improvements spurred by the increase in prices should be sufficient to "ensure the needed supplies (of energy) for a very long while."
The idea that we will ever run out of oil is NOT absurd. Oil is a non-renewable resource... for all practical intents and purposes. There is only so much of it in the earth.. and of that, only a small trickle will be replenished via natural processes or current recycling programs.
So, there are really only three solutions to this problem...
1.) Find more oil.
2.) Recycle more oil so that we can recycle as much as we use... eliminating the need for more oil to be mined from the earth.
3.) Use alternative and more abundant resources as fuels.
The only problem with solution 1, which happens to be the solution we're using most extensively, is that it's going to hit the wall at some point.
Personally, I think we need to do all three of the solutions... (which means doing solutions 2 and 3 more than we're doing now) so we're more ready to adapt to having to rely on any one of them should the need arise.
We use too much energy, period.
Mark: Go read my earlier posts for a long explanation of why we'll never "run out" of oil.
jez: There's no way to maintain our standard of living (and lift the third world out of poverty) without increasing our energy consumption. What criteria have you used to determine that we're using "too much" energy?
Obviously you're thinking of the timeline involved as being far smaller than I am. And if you're going to nitpick over what "run out" means, fine.. go right ahead.
Your argument is that as supply decreases, prices will rise and consumption will drop... working out, over time, to resemble, on a graph, radioactive decay.. for example.
Overall, yes... we WILL "run out" of oil. There will come a time... unless we start relying more on alternative sources of energy BEFORE we're forced to by reduced supplies of oil... when the amount of oil we can extract from the earth will be insignificant to meet any sort of demand, short of hobby and recreational interests... and it's price will reflect that.
Now I, for one, would rather switch to alternative fuel sources BEFORE reduced supply forces me to... and we should work to get the cost of those alternative fuels down.. not wait for the cost of dino-fuel to go up enough to force the issue.
The more I read the responses to your earlier post on this subject, the more it turned into what we're going to do when cheap oil runs out.
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