The Oil Price Collapse: The Need for a New Roadmap - Part 1, Resources Economics

written by Albert Bressand on Saturday, January 17, 2015

Reserves must be seen as a co-production of nature and man-made technology. Except for wood and dung that pre-industrial populations could burn on the spot, there is no such thing as a ‘natural resource’. Our advanced energy system is fueled by a combination of stuff-in-place and human skills. Terms like ‘gas to Liquids’ (GTL) or ‘cracking’ capture the manufacturing element; the evolution underway will not stop there—to the point possibly of ‘oil’ being someday manufactured from CO2 and water. As John and Beth Mitchell and Valerie Marcel and put it in their report for Chatham House in London: “The foreseeable problem is not finite resources but the rate at which these very large resources can be converted into reserves for potential production. Reserves of oil and gas have each more than doubled since 1980–faster than the increase in production. Technologies are developing which are creating new reserves of ‘unconventional’ oil, as they already have for gas.”