Posted on 06/04/2006 7:59:38 AM PDT by rdmartinjd
With oil prices reaching record levels, the left is up to its old tricks, blaming the President and calling for lots of expensive big government “solutions”.
As part of this push, they argue that we're running out of oil.
But clearly, this argument is not new -- and it's dead wrong.
In 1874, Pennsylvania's state geologist fretted that America had only a four-year supply of oil left.
He was wrong.
In 1914, Washington claimed we had only a ten-year supply.
It was wrong.
In 1940, the government announced that reserves would be depleted within 15 years.
Wrong again.
In 1977, President Jimmy Carter lamented that within a decade, we wouldn't be able to import enough oil, "from any country, at any acceptable price," to meet our needs.
Hardly shocking, the peanut farmer from Plains was wrong too.
Truth be told, the world's estimated oil reserves grew from 60 billion barrels in 1920 to 600 billion by 1950, 2,000 billion by 1990, and 3,000 billion by the year 2000.
And in the next few years, they'll keep rising.
Why? Because when demand increases and prices rise, companies explore for more. When oil is cheap, they don't. Why should they?
According to Daniel Yergin of Cambridge Energy Research Associates, from 2004 through 2010, production capacity will likely grow from 85 million to 101 million barrels per day, a 20% increase. This forecast is based only on projects already under development.
So the gloom-and-doomers are about to be shown up again.
It's not just exploration either. The left consistently underestimates the power of human ingenuity -- given sufficient price incentives -- to devise new technologies which expand supply.
But in fact, researches say that today -- right now -- we could extract 150 billion additional barrels of domestic oil just by utilizing specialized software and low-cost supercomputers, 175 billion barrels locked in Canada's oil sands, nearly 300 billion barrels -- that we know of -- below the world's oceans, 377 billion barrels trapped in existing oil reservoirs, and a mind-boggling 2.6 trillion barrels embedded in oil shale across western Colorado and parts of Utah and Wyoming.
Altogether, that's more than the entire world's “proven reserves” estimates put together; and that's before we do any new exploration.
Given our high crude oil prices, it's now profitable to do all of this and more. And once done, prices will fall again, just as they did in the 1980s.
But that may not be all. What if oil isn't a scarce fossil fuel derived from dead dinosaurs, but a plentiful resource from inorganic material embedded in the Earth's crust: basically a liquid rock? Joseph Stalin's scientists thought so, and by employing this "abiotic" theory of oil formation, the old Soviet Union found numerous oil fields where Western scientists said little or no oil could exist. Their theory has received greater attention in the West in recent years, most notably from the late Cornell astrophysicist Thomas Gold, and if true, would mean that the world is literally floating on a sea of oil deep in the Earth's core. There might even be oil in space!
The “Limits to Growth” crowd rejects this out of hand, of course; but it doesn't really matter. Either way, the environmental extremists are mistaken:
There is no oil shortage.
There's plenty of oil, even for the 2.5 billion consumers in rapidly industrializing India and China.
Those countries' unprecedented consumption has driven up prices for now, but this will only unleash the supply needed to bring them right back down.
So what about today? How do we lessen the magnitude of price hikes?
Remember those environmentalists who've wailed about supposed oil scarcity?
They've reduced available supply -- and therefore hiked prices -- more than anyone else.
They've blocked offshore drilling. They've blocked drilling in Alaska's ANWR. They've even come up with the most ludicrous political slogan of all time, “you can't drill your way to lower prices.”
They oppose drilling, period. And through their draconian rules and regulations, they've stopped even one single new refinery from being built in America in more than a generation.
The result? Needlessly higher prices for everyone, especially the poor northeastern widows and African villagers for whom they endlessly claim “compassion”.
Isn't it time America stood up to these extremists?
From his first days in office, President Bush has done just that.
It's time we stood up for him. George W. Bush believes in markets, entrepreneurship and human potential. Democrats believe in fear and “redistribution”. And anyone old enough to remember Jimmy Carter should know which course actually works.
-- Rod D. Martin is Founder and Chairman of TheVanguard.Org, America's premier online conservative group. A noted author and speaker, former policy director to Arkansas Gov. Mike Huckabee and Special Counsel to PayPal.com Founder Peter Thiel, he is a member of the Arlington Group and of the Council for National Policy's Board of Governors, and he serves as Executive Vice President of the National Federation of Republican Assemblies (NFRA), “the Republican Wing of the Republican Party”.
This is not a timely argument. And if you don't hold oil stocks, you know it's time to get off this train.
This nation is overdue for making innovative strides in energy.
Oil is a loser for our future. China and India will not be using less energy but more.
That's a lot of dead dinosaurs. /sarc
There is no shortage. The essence of Peak Oil Theory is not the running out of oil, but the running out of easy oil--cheap oil--, which is still not quite here. The fact that the oil shale and tar sands are being poked at now is an indication that the day of easy oil is already in sight and the harder oil will have to be mined. Maybe $70 oil is not seen as cheap oil since we have had $2 oil in recent history, but it is still a bargain. Mined oil will cost more, which is the point of Peak Oil Theory.
Oil is what we use now, and it is at prices which will make the development of alternatives an economic possibility.
A loser? Hardly.
When drilling is prohibited for all but the Gulf Of Mexico on the Continental shelf, (and not too close to Florida, mind you--the Cubans can drill closer than Americans), it is tougher to be a 'winner'.
Add to that ridiculous restrictions on the creation of infrastructure, formulations of gasoline and other motor fuels, and a host of other government mandates, spurred by the envirolobby, and it gets tougher yet.
The shortage isn't created on a drilling rig, but in the halls of Congress and State legislatures across the country.
But Congress wants to keep the price up, it gives people something to rant about while Congress taxes fuel at three times the oil companies' profit, and puts the blame on the oil companies.
Jihad oil is raking in billions of dollars to prop up unstable, facist dictators and unstable, sabre rattling countries, who previously would have never thought about a world without alliances to the world's most powerful nation.
The oil speculators are making money for Iran and Venezuela. They use that money to buy arms and build nukes.
They know Americans will pay a premium for peace. We let them live on because our leaders are afraid to act decisively.
Thomas Sowell explains this in brilliantly understandable prose in his book "Basic Economics: A Citizens Guide to the Economy".
How much of a given natural resource is known to exist is a function of how much it costs to know.
Idiotic. Oil comes from organic matter that predates the dinosaurs.
Gold's theory is BS.
Which doesn't keep it from getting posted here on FR in some form nearly every day.
Nice theory. Prove it.
If you follow the old adage of follow the money, the so called environmentalists are big oils best friend, the environmentalists are more effective at limiting supply than a cartel such as OPEC and the result is to dramatically increase the price oil companies earn for their oil.
'''''''''''''''''''''''''''''''''''''''''''''''''''''''
All your statements were just as true during the eighties and nineties when oil was $20 a barrel. In order to understand why the price is now $70 you have to find a variable that has changed this equation. Its just wrong to blame the same oil companies that were unable to explore for new oil when the price was $20 for "capitalizing" on price increases now when they are still unable to explore. The same can be said for the argument that speculation in the futures market is responsible for increases. The same futures market existed in the eighties and nineties, and the price of oil was "speculatively" low. Something has changed to explain these large price increases. the change comes on the demand side.
No. Gold's theory is the bizarre theory outside all conventional understanding.
A simple fact that oil can't survive extremely high temperatures ought to be ample proof enough that it doesn't seep up from the mantle or core.
Believe what you want. Flying saucers, abiotic oil generation, crop circles, I don't care. The burden of proof is on you. Gold is dead. You prove his bizarre theory.
Simple. Oil is liquid fat. Only organic material can produce fat. Ergo, oil comes from animals.
good post
Duh. See these people flew planes into the world trade center. Then there was a war in the middle east. Still is one. And then Iran developed nuclear weapons tech and we all found out about it, still happening. And then several dictators nationalized oil industries in their countries.
Meanwhile, all that happened on the demand side is gradual growth of a few percent per year, marginally faster in 2003 and slowing in the last year and a half due to higher prices. The average growth in demand over the last 3 years is less than 3%, and the current projected rate is 1.5% per year. US crude stocks have grown throughout the price increases. There is no shortage.
The capital available to the industry has about doubled at these prices, if it wants to capitalize its present earnings to fund anything. It doesn't take twice the capital to get 1.5% more oil. And the extra earnings are not going to capital - they are going to governments in the consuming countries in taxes, a modest portion to existing shareholders as cash returns (dividends, share buybacks, cash piling up in the bank), and almost all to the governments of the producing countries, where it finances current consumption of things other than oil.
Like, you know, Chazev buying AKs and the Iranians getting nukes.
The standard and most likely theory is that oil comes from decomposing biotic matter mostly from plants. The alternate theory, which notes that e.g. natural gas (a much simpler organic molecule) occurs in plenty of places where there is no possibility of a biotic origin, thinks oil may have organic but non-biotic origins, as well as occuring biotically. I think the evidence for that is rather thin, but it isn't transparently impossible, as your comment pretends.
Wow, that's good news. I can't wait until we find massive new oil reserves that our politicians won't let us drill.
Don't be ridiculous. Oil is a bigger future for North America than the Middle East. But don't limit your thinking to traditional reserves. Count the Oil Sands and Oil Shale and even Coal.
I agree.
>>>>Oil is a loser for our future.
I disagree. Oil will be part of the US future energy policy and the future of the the worlds energy policy for the next 200-300 years. As long as there is oil in the ground and human beings can extract it at a reasonable cost, we'll get it out. Period!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.