When will we run out of oil?

2 The End of Cheap Oil: When and Why?: "When will we run out of oil? Never. When will we reach peak oil production? Soon (2007-2012) [14, ; also Figure 8]. The issue is not the ``end of oil'', but rather the ``end of cheap oil''. We do not present a doomsday scenario. Eventually, alternative energy sources will come to the fore. We present an oil price shock scenario, with long gasoline lines, wrenching economic adjustments, and trillions of dollars of profits at stake for major companies. (The estimated trillion barrels of oil reserves, at $35 per barrel, is $35 trillion.) This scenario can be alleviated, but only with sufficient planning for alternative energy sources.

The standard economic arguments show that there are 40 years of ultimately recoverable oil in the ground. The arguments are correct, subject to two assumptions. First, the arguments assume that with enough economic incentives, one can extract oil from the ground in ever increasing quantities -- until the day on which the last drop is extracted. Second, they assume that the demand (and so the production) for new oil will remain constant, or grow at current rates, even as third world economies join the first world. Both assumptions are false."

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