CRYING WOLF: Warnings about oil supply
In the past two years, a number of articles have appeared warning not only of a new oil crisis, but of the end of the oil era, as oil production inevitably peaks and declines due to inexorable geological forces. These include 'Mideast Oil Forever?' by Joseph J. Romm and Charles B. Curtis and 'Heading Off the Permanent Oil Crisis,' by James J. MacKenzie, among others.
The profusion of articles on the subject is unfortunate, since the casual reader (and policy-maker) might conclude that the large number of articles have an equally large amount of research behind them. In truth, most of these are not actually about oil, but take the assumption that oil scarcity is imminent, especially outside the Middle East, and nearly all rely on a few pessimistic quotes from oil men, or recent work by one or two geologists using what is known as a 'Hubbert approach.' Most notable are the recent publication of the book The Coming Oil Crisis by Colin Campbell and the March 1998 Scientific American article 'The End of Cheap Oil' by Colin J. Campbell and Jean H. Laherrere.
The gist of their argument is that most of the world's oil has already been found, as evidenced by the alleged lack of recent giant discoveries; Middle East reserves have been overstated for political reasons; actual total recoverable resources are only about 1.8 trillion barrels, not the 2.4 trillion barrels that others have estimated; existing fields will not continue to expand in size and production as others suggest; and most oil producing countries outside the Middle East are said to be near, if not past, their point of peak production, which occurs when 50% of total oil resources have been produced. Production is predicted to drop off steeply afterwards. Thus, they forecast that 'The End of Cheap Oil' is at is at hand and prices will be rising shortly.