Quote:
Originally Posted by Broadsword2004
I think a good way to greatly lengthen out the supply of petroleum is to stop using it (and other fossil fuels) for energy and seek alternative sources, or figure out a way to greatly reduce its use (like an IC engine that gets the same power for 50% of the fuel use). That way it could be used solely for chemicals and materials mostly.
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Disagree.
That is not how mineral economics works.
The current problem with petroleum is not the amount in the ground, it is the infrastructure required to extract it, transport it to market, and sell it...for a profit.
This infrastructure is a considerable long-term investment.
Threaten the long-term profits, and no investment will be made.
This is why Russia, Mexico, and Venezuela are facing declining production.
Nobody will make long-term investment, because long-term profits are unlikely.
Venezuela's production has declined during Chavez's tenure:
http://tonto.eia.doe.gov/country/img...etro_large.png
Mexico's started declining around the time US oil consumption peaked and Canada's production was increasing.
Mexico:
http://tonto.eia.doe.gov/country/img...etro_large.png
Canada:
http://tonto.eia.doe.gov/country/img...etro_large.png
After a rapid increase, Russia's has peaked. Putin's been shaking that money tree too much.
http://tonto.eia.doe.gov/country/img...etro_large.png
The biggest long-term threat right now is a
plummet in prices.
This is where China's bubble could cause a problem.
Money would flow out of commodities.
Investments wouldn't be made.
The cover of the Economist in March, 1998:
http://z.about.com/d/middleeast/1/0/...-/0610-oil.jpg
Oil was down to $10-11 per barrel in 1998.
What happened over the next decade?