The oil market has no information about the amount of oil left in the ground until production is unable to keep up with demand. In October 1991, Ehrlich paid up. Obviously, prices did not reflect the fact that ten years worth of minerals had been taken out of the ground. Simon demonstrated that prices do not reflect the decline of natural resources. Although the economy treats energy just like any other resource, it s not like any other resource.
Energy is the precondition for all other resources.
Energy resources that consume more energy than they produce are worthless as sources of energy. It will make no energy sense to look for oil in America after 2005. In truth, every year for the past two decades the industry has pumped more oil than it has discovered, and production will soon be unable to keep up with rising demand. IEA followed Laherrere and Campbell s view and forecast a peak in conventional oil for the year 2010 at 78.9 million barrels per day and a decrease in 2020 at 72.2 million barrels per day. Franco Bernabe, chief executive of the Italian oil company ENI SpA, expects the world to experience 1970s-style oil shocks starting sometime between 2000 and 2005.