"You're our only hope."

OJ, are you of the opinion that the world will never run out of fossil fuels?

Not in your lifetime, dude.

oil is a byproduct of the earth's internal processes, not from dead dinosaurs. so no, we will never run out. what is more likely is that we tap into a new source that is cleaner to use. of course the leftists will still bitch and moan because that's all they ever do.

. . . or know how to do.

I think OJ's point was that, with energy prices falling and the yield curve inverting (short term rates higher than long term rates) Bernanke will need to start cutting rates because the short term rates are too high.

Grog:

Of course we will, just like we ran out of whale oil. We're way out of whale oil, that's why nobody has lamps anymore and we're all sitting here in the dark at night.

Natural gas prices may fall a bit more, but right now they're more than 50% higher (real dollars) than they were in 1999. NG is a premium fuel and demand is very strong, both here and worldwide. Also, NG is highly fungible with refined oil product for many uses, so its price has tended to track the price of oil ... especially since wholesale prices were deregulated in the 1980's. NG will not be cheap anytime soon.

As for finite supplies (Grog's point), but of course. But there's a whole lotta NG yet to be tapped, including deep sea drilling.

Re: ghostcat's point, there's plenty of methane:

Researchers estimate that this extensive field of hydrates at the bottom of submarine Barkley Canyon off the British Columbia coast, could provide enough methane to power Canada for four decades. [...]

From other evidence, Chapman believes that the ice may cap deeper deposits of very clean oil. He noticed that the ice was a yellow brown, indicating that the hydrocarbons were from a deeper source. [...] When [a tiny underwater rover's] arm poked into the sediments, it released clear, light oil, presumably from that deeper reservoir, he adds.

Worldwide, methane hydrate sources are estimated to be equivalent to 137.5 trillion barrels of oil.

On land, in British Columbia alone:

Coalbed methane (CBM) is the natural gas found in most coal deposits. [...]
CBM is a clean-burning fuel, considered more environmentally friendly than oil, coal or even conventional natural gas. [...]

CBM offers significant economic opportunities. Below 2,000 metres, CBM cannot [yet] be extracted at economic rates. Current estimates place British Columbia's CBM volume between 90-250 trillion cubic feet (Tcf) of gas in coals above a 2,000 metre depth. While only 20 per cent of this gas may be recovered, the marketable volume of 18-50 Tcf is equivalent to 25 to 75 years of gas supply at current production rates...

Also, we aren't dependent on fossil petroleum:

Thermal depolymerization, AKA "all the petroleum you could ever want, forever".
Not cheap, however, although it's inexpensive enough to use exclusively without much damaging our economy - $ 80 - $ 120/bbl, depending on feedstock.

Finally, there are 1.5 trillion barrels of fossil petroleum locked into American Rocky Mountain oil shale, which we can extract for $ 30 - $ 50/bbl.
However, 80% of it is under Federal land, which may pose a bit of a political problem, until gasoline hits $ 5/gal.

The oil market is doing what markets do best: Allocating resources.

Right now, we're sucking dry the most easily-exploited oil deposits, but their inevitable depletion doesn't mean that the world will be out of oil, just out of CHEAP oil.

Posted by: Michael Herdegen at December 28, 2005 3:28 AM