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I believe there is much more oil out there than what most people think. I also remember the'crisis' of the 70's. It was artificially induced, not just by OPEC, but by our own government regulations with cooperation from the oil companies. I had friends who ran two good size boats from North Carolina through the Panama Canal and back up to California during the height of the Carter 'Oil Crisis'. They had to postpone departure because they had to wait until they could get enough fuel. As soon as they left US waters and docked in foreign ports, there was plenty of oil, and it was CHEAP. It remained that way through Panama and up the West coast, until they hit California. Then suddenly, there was an 'oil crisis'.
There was a find announced May 4, 07 of offshore oil in China. There are new finds in Cook Inlet, Alaska. The current producing oil and gas wells in Cook Inlet were thought to be unrecoverable by the 90s, but are still going strong. My family has built seagoing vessels, some of which have been leased out for offshore exploration. I know enough about oil exploration to know that we haven't come close to exploring all of the potential areas for oil & gas. I have been told by a prominent late geologist who had one of the best records in the industry (Keith Calderwood) that there is far more oil in Alaska than what I would likely ever hear reported in the media. I believe his estimate. Most of the southwest, west and North coasts of Alaska are prime geological strata for oil production, and very little exploration has been done there.
I would like to have alternative energy sources, but until that happens it would be in our best interest as a nation to be more economically friendly to the oil companies. They are going to find and produce oil, and are likely to keep their hold on the energy market. That means that countries that are friendly to them will reap the benefits now, and will likely also have significant benefits from whatever future energy resources are developed. Meanwhile, by not allowing domestic exploration and production, which is done in a much more environmentally friendly manner in the US because of regulations, the companies are drilling in Russia, China and other countries that don't have the same environmental conscience, using our old technology which has a much larger ecological footprint. I know because I grew up in the oil fields and have friends who drilled in Alaska using old and then new technology, and are now drilling overseas using the old technology because it is cheaper and they don't have the environmental restrictions. The resulting effect is that we are causing more net global economic, national security and environmental harm by not allowing domestic drilling and production.
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Thank you for your letter. I am not an expert about oil drilling or potential oil reserves and have never claimed to be. Because of that I appreciate hearing from knowledgeable people such as yourself.
The points made in We Will Never Run Out of Oil were not of a technological nature, but an economic one. The point, simply stated, is that oil is not going to 'run out', rather that supply and demand forces will push the price of oil up, which will cause alternatives to become more attractive, from an economic point of view.
There seems to be two kinds of peak oil types out there. The first seems to claim that when the supply of oil 'peaks', that prices will rise significantly and economic growth will be slower than it otherwise would be. That is a completely uncontroversial point. The question then becomes, "How much will prices rise, how much will growth slow, and what political tensions will this cause?" For those questions, it is important to have some idea of what the size of untapped reserves are. Again, there are people far more qualified than me to determine that.
The second type of peak oil fan out there believes that all the oil will run out in a literal sense, like a straw sipping the last bit of water out of a cup. This is the type of argument I find wholly unconvincing, for reasons I discussed in We Will Never Run Out of Oil.
But for either type of peak oil fan, I still have three questions that never seem to get answered:
- When will the peak be?
- If the peak will be soon (in less than 5 years), then what will oil prices be in 5 years time?
- If prices are going to be significantly higher 5 years from now, then Why are Oil Futures so Undervalued?
