Every religion has its story of the end times, and accommodates the human need for existential terror about the end of the world. For Christians, it’s in the Bible. For liberals and environmentalists it is provided in the fear of global warming and the end of oil. The current theological term is Peak Oil, meaning that the peak in oil production is near and from then on it will be all down hill.
Here’s a status report on the oil situation. Oil reserves are increasing in relation to oil production and consumption, writes David Deming.
One way to determine if the world is beginning to run out of oil is to look at the ratio of petroleum reserves to annual production. In the 1960s, the average ratio of world petroleum reserves to production was 35. During the energy crises of the 1970s, the ratio decreased to 32. In the 1980s, it increased to 37. During the 1990s, the ratio of reserves to annual production rose to 45. In 2005, the ratio of oil reserves to annual production was 49, nearly a record high.
So why have oil prices skyrocketed (apart from the decline in the dollar)?
From 2002 through 2004, demand for oil increased by an average 3.7 percent annually. This is more than triple the rate of increase from 1990 through 2000, which averaged an anemic 1.1 percent. Low demand during the 1990s, combined with surging reserves, caused oil prices to bottom out near $10 a barrel in December 1998.
A glance at gold and oil prices in the last month indicate that the current price peak may be behind us. It wouldn’t be the first time. After all, when you jack up the price of something then people are going to bust their butts to find more of it to sell.
Oh, oil will run out eventually. But it will still not be the end of the world. Instead we will find another way to obtain and use energy.
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