We Will Never Run Out of Oil
The Oil Supply – The Doomsday Scenarios are Flawed
For as long as I can remember, I’ve been hearing that the world oil supply will run out in a few decades. I remember quite vividly growing up in the early 1980’s hearing that there wouldn’t be any oil left by the time I learned how to drive. Fortunately these predictions never came true, but the idea that we will exhaust all the oil under the surface of the earth is a persistent one.
Predictions that we will run out of oil after a certain period of time are based on an ignorance of the economic way of thinking. The typical way to estimate the number of years it will take us to run out of oil is to consider the following factors:
- The number of barrels we can extract with existing technology.
- The number of barrels used worldwide in a year.
The most naive way to make a prediction is to simply do the following calculation:
Yrs. of oil left = # of barrels available / # of barrels used in a year.
