How Big, Exactly, Is The Supply of Fossil Fuels?
Thursday August 28, 2008
In We Will Never Run Out of Oil I argue against calculations that oil will "run out" in some specific year:
A recent article New York Times article on Natural Gas suggests that we should not assume the supply is fixed either:
Predictions that we will run out of oil after a certain period of time are based on an ignorance of the economic way of thinking. The typical way to estimate the number of years it will take us to run out of oil is to consider the following factors:My specific argument was largely about point #2 - that the amount of oil we use is determined by the price of oil and as the price of oil rises, alternatives will become more economically feasible.The most naive way to make a prediction is to simply do the following calculation:
- The number of barrels we can extract with existing technology.
- The number of barrels used worldwide in a year.
Yrs. of oil left = # of barrels available / # of barrels used in a year.
A recent article New York Times article on Natural Gas suggests that we should not assume the supply is fixed either:
American natural gas production is rising at a clip not seen in half a century, pushing down prices of the fuel and reversing conventional wisdom that domestic gas fields were in irreversible decline.
The new drilling boom uses advanced technology to release gas trapped in huge shale beds found throughout North America — gas long believed to be out of reach. Natural gas is the cleanest fossil fuel, releasing less of the emissions that cause global warming than coal or oil...
While the recent production increase is indisputable, not everyone is convinced the additional supplies can last for decades. “The jury is still out how big shale is going to be,” said Robert Ineson, a natural gas analyst at Cambridge Energy Research Associates, a consulting firm.
Comments
From my point of view the problem is not to be found in the supply of fossil fuels but in their prices. People now face climbing high prices of oil, and this is due to such events as the war in Iraq or what now happens in Georgia. Thus, even if the supply of fossil fuels is increasing (as you say it, and I completely agree with that), this doesn’t benefit households since prices do not decrease.
Well i think people all around the globe should realise the true value of natural resources,and develop strategies to efficently utilize the limited resources, fossil feuls. We should use technology to create newer and cost effective sources of energy and be willing to transform the businesses cycles linked to rising oil prices.
In a mathematical sense we will never run out of oil because as the quantity available becomes smaller and smaller, the price will rise until it becomes cheeper to obtain energy by some other means. Thus the last few million barrels of oil will be so costly that their use will be reserved for more worthwhile purposes than energy production (such as in medicine).
However in practice, 99.9% of the present consumers of petroelum products will have to manage with an alternate source of energy or none at all! Thus to all intents and purposes we will have run out of oil.
David, I made the same point in a message to Mike when he posted his first article about never running out of oil.
While he’s right in suggesting that we will probably never truly run out of fossil fuels due to the market outpricing them, I take issue:
1) In the condescending manner in which you express this view. An ‘ignorance of the economic way of thinking’? It’s not an economic way of thinking, it’s merely a look at how prices can’t be held constant and how that impacts on behaviour. That’s more of a truism than a way of thinking in this case.
2) That you don’t highlight David’s point in your own argument, which ultimately makes your suggestion that ‘we will never run out’, misleading at best, false at worst.
With the increase in price of hydrocarbons and development of new technologies making new sources possible, the worlds supply of hydrocarbons is not even close to running out.
There are large deposits methane hydrates all over the world. Just off the coast of North and South Carolina, a pair of relatively small areas, each about the size of the State of Rhode Island, shows intense concentrations of gas hydrates. USGS scientists estimate that these areas contain more than 1,300 trillion cubic feet of methane gas, an amount representing more than 70 times the 1989 gas consumption of the United States.
Where there is a will, a need, and a profit, there is a way to solve almost any problem.