In his State of the Union speech, President Bush asked America to "move beyond a petroleum-based economy" because he evidently buys into "peak oil" theories that we inevitably must run out of oil. Since we are taught to believe that oil is "fossil fuel" and there had to be a finite number of dinosaurs, inevitably we must run out of oil too.
Fears that we are "running out of" a critical energy can be traced back to the English coal scare and the 1865 publication of The Coal Question, a book written by one of the 19th century’s greatest scientists, W. Stanley Jevons. The argument was that England’s dominance in the industrial revolution was doomed because at then-current consumption rates the world would soon be out of coal. Jevons was famously wrong; he completely missed completely that inventors would find cheaper ways to get more difficult to mine coal out of the ground, or that transportation engineers would come up with cheaper ways to move the coal economically over longer distances.
Today, "peak oil" theorists are repeating the classic mistake of viewing hydrocarbon fuels as a finite resource that must inevitably be expended. Maybe oil is not an infinite resource, but we need to think of hydrocarbon fuels an "open system." Economist Julian Simon argued a decade ago that we will never run out of oil, not because oil availability is unlimited, but because the resource is truly not a fixed resource. Human creativity and technological innovation today make more hydrocarbon fuels economically available, recovered from deeper levels within the earth and transported efficiently across greater distances.
Today the fastest growing sector of the oil industry involves deep-drilling, at depths three miles or more below the surface of the earth, including a boom in worldwide off-shore drilling that a decade ago was unimaginable. Russia and Vietnam have formed a joint-venture in which they are recovering off-shore oil from basement rock that is volcanic in nature. The U.S. Department of Energy has launched a "Deep Trek" project to recover abundant natural gas within the continental U.S. at depths of 15,000 feet or more.
Moreover, we are getting increasing confirmation that hydrocarbon fuels form inorganically. NASA just confirmed that the probe which landed on Saturn’s giant moon, Titan, has found abundant abiotic methane. No one yet has argued that Titan had little dinosaurs (or ancient forests, or plankton, or any other type of organic material) that formed the natural gas we find there.
In saying that America is "addicted to oil," President Bush has bought the conventional wisdom of the political Left hook, line, and sinker. Rather than focus on bio-fuels that require the expenditure of more hydrocarbon fuels to produce than is saved, an innovation that merits consideration is natural gas. Liquefied natural gas receives little play from the mainstream media because it is still a hydrocarbon which the political Left hates. Nuclear power is yet another serviceable energy unpopular to the political Left. Still, today many European cities are powered by nuclear power plants two or three generations more modern than the nuclear plants we have allowed to be built in America.
Oil companies are making record $100 billion annual profits not because oil is scarce, but because we believe it is. The government’s own data do not validate the conclusion that we are running out of oil. The Energy Information Administration documents proven oil reserves have continued to increase worldwide, to a current historically-high level of 1.28 trillion barrels, despite world oil consumption increasing by 60 percent since 1970. The truth is that at $55 dollars a barrel or higher, we will have abundant oil and natural gas for as far into the future as anyone can see. Would someone please explain to President Bush that the "peak oil" theory is a classic energy resource hoax?