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Demand for Oil Will Only Increase as Populations Continue to Grow

For the last few weeks, many of the leading stories in the mass media have been about the unprecedented rise in the price of oil (to over $100 a barrel) and gasoline (to over $4.00 a gallon) and the resulting impact on inflation and food prices.

Almost all Federal officials, TV commentators, pundits, editorial writers, and assorted journalists assume that the problem is temporary and can easily be cured if we increase domestic oil production, if people drive less, or drive smaller cars, and if the principal oil producing countries increase their production.

Unfortunately, there is absolutely no basis for such optimism.

There is little recognition that oil is a finite resource and that, in all likelihood, within the next few years, world oil production will peak and begin a slow decline.

The crux of the matter is that demand for oil already exceeds supply, and that perilous situation can only worsen as demand continues to increase due to continued population growth and increased affluence, particularly in the developing countries such as India and China. The only solution to the problem is to halt and eventually reverse both U.S. and world population growth in order to reach a far smaller population that would be sustainable for the very long term. At NPG, we estimate that level to be around two billion for the world, and not more than 150 million for the United States.

The fact of the matter is that the end of the fossil fuel era is in sight. That fact is generally ignored, but it cannot be wished away. As Lindsey Grant points out in his NPG Forum paper, The End of Fossil Fuels: Part 2, Twilight or Dawn?, "the fossil fuel era has been a brief spike that generated an unsustainable growth in population and, in the industrial world, consumption."

In the paper mentioned above Grant writes, "The age of reliance on fossil fuels has been extraordinary, both for its swift rise and its prospective brevity. It has supported a remarkable growth in prosperity in the industrial world. The return to reliance on the sun's annual radiation of energy to the Earth will be a painful comedown."

Offshore Drilling. Is increased offshore drilling the answer to reducing our dependence on foreign oil? President Bush recently called on Congress to authorize offshore drilling for the vast oil resources believed to be contained in deposits under the outer continental shelf in the Atlantic. How vast? Some estimates are that these deposits contain 42 billion barrels of oil, others that they contain as much as 86 billion barrels.

The assumption seems to be that if those estimates are accurate and the oil is eventually recoverable, we would have enough oil to last almost indefinitely. It is extremely curious that it is rarely if ever mentioned how long a given oil supply would last at our current level of consumption. We consume the almost unimaginable quantity of 20 million barrels of oil each day, or some seven billion barrels of oil a year! The enormous quantity of 86 billion barrels of oil would supply our needs, therefore, for a mere 12 years, at our present level of consumption. But, because of the growth our population (driven by immigration, both legal and illegal) our demand for energy is constantly growing, and that would serve to shorten that time period substantially.

Is there a solution to the problem? There is, but it is almost universally ignored. Here again we will quote from Lindsey Grant's NPG Forum Paper, Twilight or Dawn? "Above all, seek the solution on the demand side. The United States must stop and reverse its population growth so as to match the decline of conventional energy with declining demand, and to free more resources for the investments that lie ahead in converting to renewable energy."