NCPA - National Center for Policy Analysis

Easterbrook: A Future Without Cheap Oil

July 24, 2000

Increased consumption of oil without development of viable energy alternatives could have disastrous economic consequences, says Gregg Easterbrook of the New Republic.

So far, the world has consumed about 820 billion barrels of oil, and figures show:

  • Daily global consumption of oil totals 75 million barrels.
  • The proved reserve of petroleum is slightly more than 1,000 billion barrels, according to BP Amoco.
  • At current rates of consumption, this reserve would cover world use for about 40 years.

However, studies indicate global petroleum production will peak within the next 10 years, followed by a gradual decline. Once production peaks, prices may rise to permanently higher levels.

The solution could lie in developing alternative energy technologies (e.g. wind, solar, biomass) that would eventually reduce demand for oil. However, says Easterbrook, current government energy policy provides inadequate incentives for such research.

The good news, he says, is that energy alternatives are becoming competitive with fossil fuels, and as the price of petroleum rises, may become the cheap fuels of the future.

Source: Gregg Easterbrook, "Hooray for expensive oil! Opportunity cost," New Republic, May 15 2000.


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