Knowledge Problem

The Problem of Unconventional Oil

Lynne Kiesling

The Wall Street Journal Energy Roundup has a post on new estimates of the supply of “unconventional oil and gas”. Not surprisingly, it’s good news and bad news: there’s lots of potentially recoverable stuff out there, which means that there is indeed potential for rightward shifts of the supply curve, but the Wood Mackenzie study they cite believes that the non-OPEC unconventional sources will peak in 2020.

The post usefully cites a Financial Times editorial from yesterday on the subject, which points out some of the difficult political economy of fossil fuel supply and consumption today:

There is a balancing act here. It would be handy to have proven techniques for extracting oil and gas from unconventional sources in the US and Canada. Society as a whole would benefit from the increased security of supply but subsidising unconventional production promises high emissions and plenty of pork with little assurance of success. Governments should focus more on basic technology and here the scarcity of qualified engineers is as worrying as the scarcity of oil.