With oil prices seeming to settle in around $100 a barrel – an alarming number, but not all that surprising when you consider the dollar’s weakness – perhaps it’s time for some contrarian thinking on the arrival of the so-called “Peak Oil” state.
“The World Has Plenty of Oil.” Mr. Saleri’s conclusion:
Sufficient liquid crude supplies do exist to sustain production rates at or near 100 million barrels per day almost to the end of this century.
His strongest point, beyond the straight recitation of statistics on what we know is in the ground and how much we actually consume, is that high oil prices will tend to create incentives for alternatives, both alternative fuel/energy sources, but also alternative extraction techniques. Oil that was not profitable to extract at $50 a barrel may be quite profitable at $100 barrel, and if oil prices remain high, previously untapped sources of oil will come on line. (A 2005 study by the RAND corporation said that a “surface retorting complex” for extracting oil from shale “is unlikely to be profitable unless real crude oil
prices are at least $70 to $95 per barrel (2005 dollars).”)
All in all it’s a rather different message than what you might read in your daily fishwrap or what you’ll hear from any environmental group. Oil will run out eventually, but it’s not likely to happen in our lifetimes.