From a reader:
The other factor that tends to get ignored – and which applies to all subterranean resources including iron, tin and coal – is that it costs money even to arrive at an estimate of how much is in the ground. While surface-penetrating radars and other technology helps us find [i]likely[/i] areas for oil exploration or for iron mining, actually locating any of the stuff and validating the estimates requires digging a hole – actually a great many holes – and that costs money. In addition the “non-invasive” technologies work at relatively short distances. We don’t yet have satellites that can tell us there is a previously unknown sea of oil under Provo Utah. Even if there were a satellite that could tell us that, or at least indicate that might be the case, somebody would still have to go to Utah and start digging exploratory holes. (After paying many fees and jumping through many government hoops.) It can cost several million dollars just to look for oil or to estimate how much oil might exist in a given area. Then it will cost millions (morely likely billions) to extract it. If oil is selling at $30 a barrel it isn’t worth anyone’s time to go looking for oil in Provo or even to dig enough holes in Kuwait to firm up the reserve estimates. But if it is selling for $60 a barrel it makes sense to go looking for oil in areas you’ve previously ignored, because if you do find it you’ll be able to charge enough for the oil coming out of the new well to pay for all the geological surveys, exploratory wells and dry holes you had to dig before hitting one that actually prodcues. At $100 a barrel it might even be worth a trip to Provo.
In the early ’70s it was seriously suggested that America’s domestic oil stocks would be completely exhausted by the mid 1980s. that we only had about 10 or 12 years of reseves. Needless to say, we didn’t run out of U.S. oil in 1985. Why? Rising prices made it worthwhile for oil companies to go look for more oil. Invariably when people go look for more oil (or lead, or tin) they find it. The reason they dig deeper into known mines or pump water into known oil wells to extract the last of the commodity is that it is cheaper and easier to do that in known good location whose cost has already been amortized than it is to spend money looking for more. But eventually conditions do favor more exploration and more is found. And once these new locations start producing the increased supply invariably drives prices down – which is OK, because the companies will have made enough on the initial period of high prices to cover the cost of increasing their capacity. Capitalism is a beautiful thing. (Thomas Sowell uses exactly this example in his “Basic Economics”, if memory serves.)
The Earth itself, is, ultimately, finite. Because of this all resouces can eventually be exhausted. But at the rate we are both consuming, finding and profitably extracting oil, metals and minerals it is extremely unlikely that we’re going to run out of anything we really need before we’ve found a substitute for it. (Or a new supply. Asteroids are big chunks of rock and metal. If we get the travel cost down we can strip mine those for millennia without troubling anybody. If the human race is to survive we’ll eventually have to leave the Earth – and probably the solar system – so we may as well start working on the problem now. That’s REAL long-term planning for the Human race, not all this nonsense about saving snail darters which, in the long run, will be exterminated by nature herself in the form of an expanding Sun. )