PEAK OIL

could take several years or even decades before the necessary investments have sufficient
effect. 213
Critics of the peak oil theory also argue that in the event of an increase in oil prices,
additional reserves will become available owing to the fact that mining them will then be
profitable. If the world market price of oil is lower than the production costs for a specific
oil field, mining is not profitable. Such a field is not even regarded as a recoverable
resource. If the price of oil exceeds the production costs, however, recovery becomes
economically affordable. In the event of a decrease in oil production and an increase in
price, additional oil would become available. This argument is agreeable only to a very
limited extent, since it ignores the fact that this new oil will no longer be inexpensive oil.
Its price will remain high and will continue to increase. As a result, electricity, fuels,
plastics and food will also become more expensive. Possible consequences could be
recession, increasing unemployment, and even a breakdown of the financial system. The
imminent danger is not the end of oil but the end of inexpensive oil and thus,
coincidentally, the end of our economic system, which is dependent on the use of
inexpensive oil. Many critics cite past predictions that failed to come true claiming that oil
supplies would already be exhausted by the end of the 20th century. This criticism,
however, does not take all the relevant factors into account. On the one hand, there were
predictions in the 1970s that oil reserves would be exhausted by the end of the 20th century or even before. On the other hand, however, there were also widespread
predictions that oil production would not be exhausted around the end of the century but
would have reached its maximum. There are even indications that this prediction would
have come true if the oil crisis in the 1970s had not led to a temporary decrease in
production. Many critics refer to the first statement regarding the exhaustion of oil
supplies because they are not aware of the difference between peak oil and the exhaustion
of oil supplies. They therefore assume that a general prediction has been made that global
supplies will be exhausted by the year 2000. Table 1 contains a list of various sources
whose predictions differ up to 20 years. In most cases, however, a production maximum
for conventional oil has been predicted for the period beyond 2000, which means that
predictions from the recent past are similar to those from the 1970s and have not, as is
often argued, been adjusted in any way.
213 Cf. Robert L. Hirsch, Roger Bezdek and Robert Wendling, Peaking of World Oil Production: Impacts, Mitigation, & Risk Management (February 2005),
http://www.netl.doe.gov/publications/others/pdf/oil_peaking_netl.pdf (accessed on 11 October 2010).
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