Oil

1. Energy is the most important of natural resources because
a. the creation of other natural resources requires energy
b. with enough energy all other resources can be created

2. The most reliable method of forecasting the future cost and scarcity of energy is to extrapolate the historical trends of energy costs.

3. The history of energy economics shows that in spite of troubling fears in each era of running out of whichever source of energy was important at that time, energy has grown progressively less scarce, as shown by long-run falling energy prices.

4. The cause of the increasing plenty in the supply of energy has been the development of improved extraction processes and the discovery of new sources and new types of energy.

5. These new developments have not been fortuitous, but rather have been induced by increased demand caused in part by rising population.

6. For the very long run, there is nothing meaningfully "finite" about our world that inevitably will cause energy to grow more scarce and costly. Theoretically, the cost of energy could either go up or down in the very long run. But the trends point to a lower cost.

7. Forecasts based on technical analysis are less persuasive than historical extrapolations of cost trends. Furthermore, the technical forecasts of future energy supplies differ markedly among themselves.

8. A sure way to err in forecasting future supplies is to look at current "known reserves" of oil, coal and other fossil fuels.

9. An appropriate technical forecast would be based on engineering estimates of the amounts of additional energy that will be produced at various price levels, and on predictions of new discoveries and technological advances that will come about as a result of various energy prices.

10. Some technical forecasters believe that even very much higher prices will produce only small increases in our energy supply, and even those only slowly. Others believe that at only slightly higher prices vast additional supplies will be forthcoming, and very quickly.

11. Causes of the disagreements among technical forecasters are differences in
a. scientific data cited,
b. assessments of political forces,
c. ideology,
d. belief or nonbelief in "finiteness" as an element of the situation,
e. vividness of scientific imagination

12. The disagreement among technical forecasters makes the economic extrapolation of decreasing historical costs even more compelling.

The statistical history of energy supplies is a rise in plenty rather than in scarcity. The price of oil fell because of technological advance.

A preposterous but commonly accepted notion is that energy situation can be predicted with the aid of " known reserves". "Known reserves" are much like the food we put into our cupboards at home. The amount of food in cupboards tells little or nothing about the scarcity of food in our communities, because as a rule it doesn't reveal how much food is available in the retail stores.