Crude oil prices have doubled since 2001, but oil companies have increased their budgets for exploring new oil fields by only a small fraction. Likewise, U.S. refineries are working close to capacity, yet no new refinery has been constructed since 1976. And oil tankers are fully booked, but outdated ships are being decommissioned faster than new ones are being built.What does this mean? He says that it means that the people who know believe that there is no point in investing in oil because "according to some geologists’ estimates, we have discovered 94 percent of all available oil."
The article discusses Kenneth Deffeyes book in Beyond Oil: The View from Hubbert’s Peak in which reviews predictions of
geologist M. King Hubbert … that world oil production [would hit] a peak around the year 2000. Thereafter, he argued, production would drop—slowly at first, then ever faster. …The question now is, when it's gone, what will we have done with that gift?
Deffeyes has no doubt that by 2019, the year in which Hubbert’s theories indicate global oil production will drop to 90 percent of current rates, human ingenuity will have found replacement energy sources (see “What Energy Crisis?”, p. 19). But Deffeyes is optimistic about the long term only because he believes that by 2010, pressures will grow so intense that they’ll create the resolve necessary to develop a new energy economy. In the short term, he foresees continually rising oil prices that force industry after industry closer to the wall. He fears not just escalating resource wars around the world but also mass starvation in some countries, since the 6.4 billion people living on the earth today are fed thanks largely to the successes of the 20th century’s “green revolution,” which, among other innovations, brought petrochemical-based fertilizers into wide use. …
Abundant energy from fossil fuels was a one-time gift, Deffeyes concludes, that lifted humanity up from subsistence agriculture and has led to a future based on renewable resources.
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