Why We'll Never Run Out of Oil

by Curtis Rist

American civilization as we know it appeared to be in grave peril a quarter century ago. When Arab nations cut off oil shipments to the United States during the 1973 war in the Middle East, gasoline prices abruptly rose 40 percent and panic ensued. Motorists idled in long lines at gas stations, where creeping tensions led to fights and even occasional shootings. Automakers scrambled to retool their assembly lines to manufacture miserly compacts rather than gas-guzzling behemoths. Entrepreneurs poured millions into upstart solar-energy and wind-power companies. Politicians pontificated about the need for collective belt-tightening and offered income tax credits to homeowners for energy-saving insulation. Meanwhile, doomsday scenarios predicted ever-increasing shortages of fossil fuels and $100-a-barrel oil prices by the year 2000.

Surprise. Doomsday is nigh and oil has been selling at $10 to $15 a barrel, not $100. Adjusting for inflation, gasoline is cheaper today than it was before the Arab oil embargo. Indeed, the world seems to be awash in oil.

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