The Oil Drum

This post was inspired by a post over at Paul Kedrosky's place entitled Fun with Fuel Subsidies, in which he put up these two graphics and said "Discuss." Now I am doing the same here.

Two figures (via the Economist and FT, respectively, click graphics to go the stories--at FT click the "view map" in the graphic once you get there to see the interactive map that this picture was taken from) that show the world of fuel subsidies worldwide:

Oh, dear it looks as though I have to disagree with an economist again.  But this time it is the magazine rather than an individual. As has been pointed out, and to an extent discussed in recent comments thanks to which I was able to read the initial article, the Economist came out with an article this past week that suggested that the current problems with the supply of oil are not really serious, or long-term.

There are several ways to address the issues of the article (you will have to wait a bit for discussion of the author's book since I only ordered it on Friday), but it appears to me that a primary criticism has to lie in the misunderstanding that the author appears to have about the role of technology and the slow speed with which things happen.  I am not going to argue the point that there is still a lot of oil lying around.  Yes there is, and even when we have depleted a field, we are leaving perhaps 60% or more of the original oil in place.  And yes, given enough money and time we can even get that oil out.

Nor am I going to argue, at present about the longer-term existence of large volumes of oil. Rather, I would argue that the problem that we have is of getting an adequate supply of oil, each year, to meet the demand that there will be for the oil in that year.  Under the current methods of production, and against an increasing level of demand  it is becoming more difficult to produce enough oil to meet that demand.  There are two major reasons for this, neither of which is properly recognized in the Economist article.