We’re Not Running Out Of – Or Even Low On – Sources of ‘Nonrenewable’ Energy

by Don Boudreaux on February 17, 2010

in Energy, Myths and Fallacies, Property Rights, The Future, The Profit Motive

Rossputin’s Ross Kaminsky e-mailed to me a few links that offer yet further evidence that “peak oil” is peak nonsense.  For example:

BP’s reserve replacement ratio for the year was 129 per cent – making 2009 the seventeenth consecutive year of reserve replacement of at least 100 per cent.

And this:

Occidental Petroleum Corporation (NYSE: OXY) announced today that at year-end 2009, the company’s preliminary worldwide proved reserves totaled 3.23 billion barrels of oil equivalent (BOE) compared to 2.98 billion BOE at the end of 2008. In 2009, the company had proved reserve additions from all sources of 483 million BOE, compared to production of 235 million BOE, for a production replacement ratio of 206 percent.

And this:

Questar E&P reports year-end 2009 proved gas and oil reserves of 2.75 Tcfe, up 24% from year-end 2008.

Oh, and don’t miss this superb letter in today’s Wall Street Journal:

Patience Wheatcroft argues that “peak oil—the point at which global production reaches its maximum—is no more than five years away.” (Agenda Europe, “The Next Crisis: Prepare for Peak Oil,” Feb. 11) In fact, peak oil has been five years away for decades.

So far, despite the gloomy prophecies on resource exhaustion, not only oil, but every other resource has become, on average, more abundant, not more scarce. Such increasing abundance is reflected—in the long run—in decreasing real prices. We have enough oil below the ground to focus on more urgent and less permanent “crises.”

Moreover, Ms. Wheatcroft might consider that nuclear power—a reliable and clean energy source—is not a substitute for oil, as the former can only be used for electricity generation, while the latter is mostly used for transport and petrochemicals. Buying into the peak oil myth is a poor service to the cause of nuclear power.

Carlo Stagnaro

Istituto Bruno Leoni

Milan

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