Since oil is so fabulous, why not just drill for more? Economists don’t believe that there is a finite amount of anything, all you have to do is drill a hole, pour money into it, and Voila! – black crude flows out. When a resource is scarce, the Market goes out and finds more. And people thought Cargo Cults were crazy…
Energy is the “master resource” because it unlocks access to all other resources, not only powering heavy extractive equipment but involved from the very beginning of crushing rock to mine metals, make machines, cement for roads — it’s the main energy source (99%) for the transportation network. It’s an essential component of over half a million products AND used to make those products.
Science magazine had an article stating that oil had peaked in 2005, the International Energy Agency believes energy peaked in 2006. These are tantamount to announcing that 4 centuries of fossil fueled growth — the Industrial Age — was ending. Yet there was no panic in the streets or on Wall Street
So-called renewable energy sources such as solar PV depend on oil from start to end of their manufacturing, so other alternatives will never be cheaper than oil, or possible without it.
Oil actually costs hundreds of dollars per gallon when you factor in how much we spend on our military to secure it. Retired military officers wrote a 62 page report on this , called “Powering America’s Defense: Energy and the Risks to National Security,” a followup to a 2007 report called “National Security and the Threat of Climate Change.”
Even if the oil industry had five hundred quadrillion dollars, there simply aren’t enough knowledgeable people to hire – they were all fired during the oil bust of the eighties, and now over half the current engineers and drilling rig employees are nearing retirement. And there aren’t enough drilling rigs. The average age of the existing rigs is older than when they’d usually be retired – they’re rusting and need to be replaced. And the overall infrastructure may be in bad shape, as the recent news of BP having to shut down its Prudhoe Bay pipelines due to corrosion.
Oil is exactly what you’d “invent” if you could — it remains a liquid even at -40°C and has a boiling point over 60°C. It’s denser with energy than wood or coal, and easy to handle, store, transport (via pipelines), and deliver quickly to the customer.
Oil is refined into many products. This Mother Jones article explains how this is done: What’s in Crude Oil and How Do We Use It? A guide to how crude oil turns into useful fuel for cars, jets, and more.
$$$ flow rate, ELM model, etc