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When I started studying economics the most baffling thing I learned was that the total amount of Oil we had was increasing and not decreasing. That weird fact k

When I started studying economics the most baffling thing I learned was that the total amount of Oil we had was increasing and not decreasing. That weird fact kind of made me learn the basic concepts better and I think I have learned not to read too much into these sort of news items. Journalist often lack this outlook. The world is not going to run out of Oil ever. The world is more likely to run out of "need for oil" sooner than the oil running our scenario. A particular oil field is fading means really nothing because Saudi has far too many unproven oil fields which it has not even bothered to explore yet. Now that this field might be running out very soon they will explore that oil and soon their production will grow up. The capital investment of discovery would reflect in slightly higher oil prices may be. Coming back to the CO2 emissions point you raised, even if the Oil in that Oil field goes to zero in 1 year, it wont matter. There will be more supply available soon enough. CO2 emissions will probably go down unrelated to Oil production as developed countries move to electric cars and better power plants fired by nuclear, solar and wind energy.

saagarjha 8y ago
> The world is not going to run out of Oil ever This is technically true but not really a great way to look at the issue. We will always have oil; it will just get progressively more difficult to extract it. The point where we “run out” is when it is no longer economical to extract it from whatever deposit it’s in.
- mruts 8y ago
  I think that there’s going to be an equilibrium for a long time. The less oil we use, the cheaper it will become and we will probably just be using the cheapest and most accessible oil fields. Or, if history and the Malthusian fallacy is any indication, increasingly advanced technology for cheap oil extraction will always put prices in equilibrium, regardless of the demand for oil and the cost of extraction.
- KorematsuFred 8y ago
  > The point where we “run out” is when it is no longer economical to extract it from whatever deposit it’s in. It is actually getting easier and easier to extract oil an not difficult. Fracking is a great example. Earlier you needed thousands of wells working round the clock these days you only need an area as big as a football field to trap into a large reserve. Your meta-point however is correct, it is not that Oil is going to run out but better options and cheaper options will come into existence. Also this probably will happen as a step change function and not something that can be extrapolated. Very likely fusion cells, battery cells etc. would become ridiculously cheaper to the extent that many oil fields will stop being profitable and hence will be closed down. That will be the time where "oil runs out" and in general a great day for humanity.
ppf 8y ago
In the 80's, OPEC tied the amount of oil a country can produce to their stated reserves. This led to the OPEC countries steadily increasing their stated reserves. This, combined with heavy and unconventional reserves being found in South America and Canada, has resulted in a huge increase of stated world oil reserves. The cost of extraction is not factored in to this figure though. This does mean that we will never "run out of oil", but the cost of extracting it will steadily increase, causing other energy sources to eventually become economical or palatable (eg, nuclear, or coal - there's loads of coal still. Good luck stopping China from powering its economy with coal for the next 100 years).

saagarjha 8y ago

> The world is not going to run out of Oil ever This is technically true but not really a great way to look at the issue. We will always have oil; it will just get progressively more difficult to extract it. The point where we “run out” is when it is no longer economical to extract it from whatever deposit it’s in.

mruts 8y ago
I think that there’s going to be an equilibrium for a long time. The less oil we use, the cheaper it will become and we will probably just be using the cheapest and most accessible oil fields. Or, if history and the Malthusian fallacy is any indication, increasingly advanced technology for cheap oil extraction will always put prices in equilibrium, regardless of the demand for oil and the cost of extraction.
KorematsuFred 8y ago
> The point where we “run out” is when it is no longer economical to extract it from whatever deposit it’s in. It is actually getting easier and easier to extract oil an not difficult. Fracking is a great example. Earlier you needed thousands of wells working round the clock these days you only need an area as big as a football field to trap into a large reserve. Your meta-point however is correct, it is not that Oil is going to run out but better options and cheaper options will come into existence. Also this probably will happen as a step change function and not something that can be extrapolated. Very likely fusion cells, battery cells etc. would become ridiculously cheaper to the extent that many oil fields will stop being profitable and hence will be closed down. That will be the time where "oil runs out" and in general a great day for humanity.

ppf 8y ago

In the 80's, OPEC tied the amount of oil a country can produce to their stated reserves. This led to the OPEC countries steadily increasing their stated reserves. This, combined with heavy and unconventional reserves being found in South America and Canada, has resulted in a huge increase of stated world oil reserves. The cost of extraction is not factored in to this figure though. This does mean that we will never "run out of oil", but the cost of extracting it will steadily increase, causing other energy sources to eventually become economical or palatable (eg, nuclear, or coal - there's loads of coal still. Good luck stopping China from powering its economy with coal for the next 100 years).