Monday, March 05, 2007

Price System Works: Higher Prices Stimulate Supply

Within the last decade, technology advances have made it possible to unlock more oil from old fields, and, at the same time, higher oil prices have made it economical for companies to go after reserves that are harder to reach. With plenty of oil still left in familiar locations, forecasts that the world’s reserves are drying out have given way to predictions that more oil can be found than ever before.

In a wide-ranging study published in 2000, the U.S. Geological Survey estimated that ultimately recoverable resources of conventional oil totaled about 3.3 trillion barrels, of which a third has already been produced. More recently, Cambridge Energy Research Associates, an energy consultant, estimated that the total base of recoverable oil was 4.8 trillion barrels. That higher estimate — which Cambridge Energy says is likely to grow — reflects how new technology can tap into more resources.

From the NY Times article Oil Innovations Pump New Life Into Old Wells, via a link at FEE, which asks the question: "You mean the price system works? No way!"


At 12/03/2007 12:52 AM, Blogger susankellogg said...

Oh, instead of looking for the ways to save the Earth's resourses, they found the ways how to get more and more from our planet. And what we will do when oil and other resourses will be over?


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