Q and A about crude oil and gas prices

Q: Do you think governments are allowing oil fields to decline? What alternatives are there to the government’s action/inaction.

A: How would the government prevent oil fields from declining? The presence of oil is due to geological processes not political will.

Oil fields are not like tanks that can be easily emptied. They are more like sponges. (Picture using a straw to extract all the water from a sponge!) Extracting oil depends on pressure inside the field forcing the oil out. This works well enough at the start, but as pressure decreases, less oil comes out. Sometimes pressure can be maintained by injecting seawater or carbon dioxide. However, you can never extract all the oil from a field. There always comes a point when more effort is put into extracting the oil than is economically justifiable.

Q: Aren't we discovering more oil fields all the time?

A: Yes, but not enough to keep up with what we're using. Worldwide discovery peaked in 1964. Every year after that, we have discovered less than the year before. Right now we discover 1 barrel of oil for every five barrels of oil we use.

Q: What is per capita oil production and what significance does it have?
A: The amount of oil produced per person. Per capita oil production began declining in the late 1970s. If world population had remained constant, we would now have more oil available per person. But because the world population is rapidly increasing, there is less oil available per person than there was in the 1970s.

Q: The U.S. has 200 years of coal left, so why can't we just replace the oil with coal?

A: If coal were to replace oil then it would last closer to 50 years than 200. Also, while coal can be used for some applications that oil is currently used for, oil is the best fuel for transportation. It would be impractical to power cars with coal.