April 25, 2006
There's plenty of oil
Regarding various assertions that oil is going to run out someday:
This is significantly less true than previously thought, abiotic theories aside. The world has north of 6 trillion barrels of heavy oil reserves. By contrast, current light sweet crude reserves are estimated at about 1 trillion barrels (which could last for 75 years even at an average consumption of 40 million barrels/day). New technology has made the extraction and refining of heavy oil - as well as the hundreds of billions of barrels of oil trapped in oil shale and sands - commercially viable. Oil selling for $75 a barrel certainly hasn't hurt, but the cost to extract a barrel of heavy oil is now around $10/barrel, down from twice that a few decades ago.
There is plenty of oil. There's even plenty of the light sweet crude that people really want. But we haven't constructed a new oil refinery in this country in 29 years. The regulatory and environmentalist situation makes it almost impossible.
Too bad people still think that the oil companies are price gouging...even though their profit margins are either remaining the same or decreasing.
Learn economics people.
Posted by: Nathan at April 25, 2006 08:06 PMYeah, the more time I spend with representative government, the less I'm enamored with it.
Posted by: ryan at April 25, 2006 08:43 PMNot to be asinine, but daily global oil consumption is about 84 million barrels/day right now (nowhere near 40 million). That number increases, on average, at 1.4% every year. So, not accounting for leap years, a trillion barrels of light sweet crude would only last about 27 years. That is assuming that the worlds oil producers can add another 36 million barrels to their daily output by then.
Posted by: Jason at April 26, 2006 09:13 AMPoint taken. The 40 million I indicated is a ballpark figure for US consumption. Even so, 6+ trillion is still plenty to go around.
But we still need more refineries.
Posted by: ryan at April 26, 2006 11:33 AM