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November 1, 2005
The Julian Simon Effect
It was a tenet of the late great economist Julian Simon that we'll never run out of any commodity. That's because before we do the increasing scarcity of that resource will drive up the price and force us to adopt alternatives. For example, as firewood grew scarce people turned to coal, and as the whale oil supply dwindled 'twas petroleum that saved the whales.
Now we're told we're running out of petroleum. The "proof" is the high prices at the pump. In fact, oil cost about 50% more per barrel in 1979-80 than now when adjusted for inflation. Yet it's also true that industrializing nations like China and India are making serious demands on the world's ability to provide oil and are driving prices up. So is this the beginning of the end?
Nope. The Julian Simon effect is already occurring.
Apparently, there are trillions of barrels of proven reserves of Oil Sands (or Oil Shale). Way more oil than all of Saudi Arabia. You can read the whole article here.
Posted by Peenie Wallie on November 1, 2005 at 1:40 AM
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