Over the last 25 yr, considerable debate has continued about the future supply of fossil fuel. On one side are those who believe we are rapidly depleting resources and that the resulting shortages will have a profound impact on society. On the other side are those who see no impending crisis because long-term trends are for cheaper prices despite rising production. The concepts of resources and reserves have historically created considerable misunderstanding in the minds of many nongeologists. Hubbert-type prediction of energy production assume that there is a finite supply of energy that is measurable; however, estimates of resources and reserves are inventories of the amounts of a fossil fuel perceived to be available over some future period of time. As those resources/reserves are depleted over time, additional amounts of fossil fuels are inventoried. Throughout most of this century, for example, crude oil reserves in the United States have represented a 10-14-yr supply. For the last 50 yr, resource crude oil estimates have presented about a 60-70-yr supply for the United States. Division of reserve or resource estimates by current or projected annual consumption therefore is circular in reasoning and can lead to highly erroneous conclusions. Production histories of fossil fuels are driven more by demand than by the geologic abundance of the resource.
Examination of some energy resources with well-documented histories leads to two conceptual models that relate production to price. The closed-market model assumes that there is only one source of energy available. Although the price initially may fall because of economies of scale long term, prices rise as the energy source is depleted and it becomes progressively more expensive to extract. By contrast, the open-market model assumes that there is a variety of available energy sources and that competition among them leads to long-term stable or falling prices. At the moment, the United States and the world approximate the open-market model, but in the long run the supply of fossil fuel is finite, and prices inevitably will rise unless alternate energy sources substitute for fossil energy supplies; however, there appears little reason to suspect that long-term price trends will rise significantly over the next few decades.』
Rationales for Neo-Malthusian and Cornucopian viewpoints
The nature of resources and resource assessment
Perceptions related to resource and reserve assessments
Communicating information on resources to nongeologists
Driving forces behind production histories
M. King Hubbert's predictions
Coal in England from 1550 to 1700
Whale oil in 19th century America
British coal industry from 1830 to 1995
Long-term production and price trends
The future of the oil and gas industry
“A sharp rise in energy prices is inevitable because we are rapidly depleting energy resources” - true or false?
“Those countries with the most oil reserves will control the world's oil market in the coming decades” - true or false?
“Although a decline in U.S. crude oil production is inevitable, that decline will take place over many decades” - true or false?
“North America is a mature area in regard to petroleum exploration and no large oil or gas fields remain to be discovered” - true or false?