We Are *still* Not Running Out Of Oil

Don Boudreaux beat me to the link to this Adelman article from Regulation magazine. I read it on the train home from work Monday night, and it is definitely worth a read and will provide much-needed perspective on the politicized oil question.

See also Steve Verdon on Hubbert’s Peak, one of the most misunderstood and erroneously applied data patterns I know of. The post also has a good comment thread.

One thought on “We Are *still* Not Running Out Of Oil

  1. First, thanks for your great blog. I’m a faithful reader and went to Prof. Adelman’s excellent article on your recommendation.

    Adelman’s point boils down to a policy recommendation for using the SPR to break OPEC’s market power, such as it is. But given the relatively small size of the SPR, this seems to me like a losing game. Oil producers may have short time horizons, but I doubt democratic politicians’ horizons are any longer.

    It seems to me like it makes more sense to save use of the SPR for temporary “physical” supply disruptions, including those that might come from political instability in producing countries as well as natural disasters, etc — as opposed to vain efforts to counter market manipulation for political or financial ends.

    Of course, even used in coordination with other consumers and producers, “strategic reserves” could and not fill a long-term supply gap for the reasons Adelman lays out. But perhaps the SPR could be a useful tool to blunt abrupt price movements that could be painful in the short term, giving suppliers and shippers breathing space to bring more supply to market.

    Still, it does seem a bit wild for the IEA to legimize OPEC by “cooperating” with it.

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