A couple of points to consider. First off, for the last 50 years I have been hearing people predict that we were just 20 years away from running out of oil. These predictions are updated annually and are pretty much the same.
Secondly, the point that the "last field has been found" has always been made after each field was found, starting over 100 years ago. How do you know which is the "last" one? Actually, there have been a number of fairly large fields found since Prudhoe Bay, including the recent finds in the Caspian Sea area where we don't have enough information to size the reserves.
There is a lot more untapped reserves in Russia, Africa, China and even the Middle East that are not being considered for political reasons. Forty or Fifty dollar oil will solve a lot of political problems.
The primary production phase of an oil field only produces 30% - 50% of the recoverable oil. Secondary and tertiary production recovers more total oil, but it takes a lot longer. The middle east, North Slope and North Sea fields are not yet into the secondary production stage. There is a lot more oil there, it just doesn't come out as fast and as cheaply.
Having said all this, I think the oil situation is serious, and we are going to have to make some tough decisions, but I think your time horizons are too short. Expect price increases, but on an inflation adjusted basis over the last 25 years, $35-$40 is about where oil should be priced. $40 oil will create some pain, but it will not cause a world-wide depression.
Best to all,
JH |
