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Oil Predictions from 1998

This is part of an article from the San Francisco Chronicle of Monday, August 31, 1998. I thought you might find it interesting given the situation we are now in. For Republicans up and down the chain of command, the solution seems to be drilling everywhere and anywhere. I’m not sure the Democrats have a plan regarding oil.

But as Jack Greene reminded us on my show Tuesday, there is a huge start-up time to consider. There is a shortage of equipment and even a shortage of workers. It could take as long as four years to get oil from any of these new sources.

Here’s what they were saying back in 1998:

“Oil, the black gold of the world economy, is almost insanely cheap – but it won’t be for long, warns a small but growing band of doomsayers.

Based on a controversial theory, they fear world oil demand will begin to exceed supply as early as about 2010.

That might revive sights not seen since the oil crises of the 1970s: traffic jams at gas stations, Saudi Arabian princes buying U.S. skyscrapers, and news stories about inventors whose cars allegedly burn corn oil, wood chips or beets.

“Anybody who wants to drive their motor home up to Alaska better do it now while the supply of oil is cheap,” says veteran oil geologist L.F. “Buzz” Ivanhoe. “It’s not a joke. I hope I’m wrong as hell, but I fear that I’m not.”

Such claims have sparked a debate among oil geologists, economists, engineers and industry officials, most of whom insist there’s plenty of oil left for many decades to come.

Nowadays, the world is awash in cheap oil. Prices are so low that they are hastening the collapse of the economy of Russia, a major oil exporter.

Bay Area residents – not satisfied with eternally blue skies, excellent restaurants, high employment and adoring tourists – complain about paying $1.31 for a gallon of regular unleaded gas.

They’re living in a fool’s paradise, the doomsayers say.

Mechanical engineer Ron Swenson, president of EcoSystems Inc. in Santa Cruz, uses the Web to warn about “the coming global oil crisis.”

While the American Petroleum Institute insists that the world’s known oil reserves increase every year, Swenson dismisses such talk as a play on words.

“Between 1973 and today, we have consumed a quarter of the world’s entire endowment of oil from the beginning of history until the end,” says Swenson, who received his master’s degree in mechanical engineering at Stanford.

“If we’ve consumed a quarter of our oil in that time, we don’t have more oil – we have less.” But such fears of a post-millennium oil crunch are “primarily bunk,” replies economist Mike Lynch of MIT, an expert on oil-supply trends.

Lynch laughingly recalls past flubbed forecasts of an oil apocalypse. One of the leading doomsayers at present is Colin Campbell of Petroconsultants in Geneva, who, Lynch says, “predicted in a 1989 article . . . that world (oil) production had peaked . . . and that the price would go to $40 to $50 (a barrel) in the early 1990s.

“And now it’s about $12 to $13.”

The fate of oil supplies is starting to attract attention among scientists. “The Next Oil Crisis Looms Large – and Perhaps Close,” is the headline on a four-page story in the Aug. 21 issue of Science magazine. “

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