Peak Oil from an “Economic Geologist”
October 21st, 2006 by Grant in: Economics, Oil & GasAs crude oil ($wtic: chart) continues to hover around $60 per barrel, the peak oil controversy continues.
The peak oil theory is growing in popularity, suggesting that there is a finite amount of oil on the planet, and we’ve extracted more than half of it. As such, it seems we live in an age of diminishing returns on our natural resources.
However, an “economic geologist” name Eric Cheney from the University of Washington seems to think we’re in the clear.
“Eric Cheney said Friday in a news release that changing economics, technological advances and efforts such as recycling and substitution make the world’s mineral resources virtually infinite.”
Source:United Press International
His argument is based on the increase in technological ability to extract crude from the earth. Effectively, the technology required to extract crude oil from unreachable deposits 40 years ago does exist today, and you could follow that the technology required to extract unreachable oil today will exist tomorrow.
He follows:
“The most common question I get is, ‘When are we going to run out of oil?’ The correct response is, ‘Never,’” said Cheney. “It might be a heck of a lot more expensive than it is now, but there will always be some oil available at a price, perhaps $10 to $100 a gallon.”
In essence, the above statement leads me to believe that, according to Mr. Cheney, the free market for crude oil will do more to control demand than technology will do to increase production. He says nothing about existing reserves and how plentiful they may be.
Of course, I guess this is why he’s an economic geologist.
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