Friday, January 5, 2007

Truth on Oil

Recent articles in Newsweek and Reason Magazine are finally bringing some sanity to the oil debate. Many people (most of which don’t know anything about oil or markets) claim that there isn’t enough oil to feed world demand. They think that we should begin greasing our bicycle chains and stocking up on candles because the black gold will no longer be around to fuel our debauchery filled lives. Think again.

The Newsweek article completely blows that theory away. Entrepreneurs have found ways to increase efficiency, decrease waste, and utilize technologies that discover unknown deposits. They have been proving the naysayers wrong for over almost a century. Furthermore, reports show that there are enough known reserves to last the remainder of the century along with unproven reserves bountiful enough to last much longer.

But there is a catch. Ronald Bailey correctly reports that many countries are seizing oil assets which may completely destroy the industry. Mexico, Venezuela, and Iran are killing their industries while Russia is doing their best to catch-up. While these governments rape the industry of profits, they deny foreign capital which is essential to new production and technology.

If I have to ride my bike to work in 20 years it will be because of oppressive governments and not a lack of resources.

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