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Slumping oil prices put the lie to
scare stories of the hysterical '70s.
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Publisher: The Financial Post
Author: David Frum
Issue: December 5, 1998
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Investment is the magic key to reserves. ....
In the past 12 months, the price of oil has dropped 41%.
Adjusting for inflation, it now costs less than it did in 1972, before the first Arab oil shock. ...
The reason oil prices are falling is because oil is steadily becoming more plentiful. ...
In 1930, the United States had proven reserves of some 13 billion barrels of oil. ... In 1990 the U.S. had proven reserves of 17 billion barrels of oil, 25% more than in 1930. ...
In 1975, in the darkest days of the energy crisis, the Persian Gulf was authoritatively reported to contain some 74 billion barrels of oil. ... as of 1993, 663 billion barrels, nine times as much as 20 years before (is there).
[This later proved to be intellectually projected expectations and NOT reality.]
... As M.A. Adelman, an oil economist who in the hysterical 1970's correctly predicted the energy bust of the mid-1980s has elegantly put in his excellent 1995 book The Genie Out of the Bottle; oil reserves are no gift of nature. They (are) a growth of knowledge, paid for by heavy investment." ....
If and when consumers will not pay enough to induce investment in new reserves and capacity, the producing industry will dwindle and disappear. ....
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