Oil: Are we half empty or half full?

With gasoline prices heading to $3 a gallon, it takes quite a contrarian to make the argument that the Earth still has plenty of oil. But that is exactly what Peter Huber does in his new book 'THE BOTTOMLESS WELL: The Twilight Of Fuel, The Virtue Of Waste, And Why We Will Never Run Out Of Energy'.

On March 6, 2005, C-SPAN's Book TV aired a thought provoking presentation given by Mr. Huber.

Oil, Oil Everywhere..., from the January 27, 2005 Wall Street Journal, provides this summary of Mr. Huber's thesis:

...In sum, it costs under $5 per barrel to pump oil out from under the sand in Iraq, and about $15 to melt it out of the sand in Alberta. So why don't we just learn to love hockey and shop Canadian? Conventional Canadian wells already supply us with more oil than Saudi Arabia, and the Canadian tar is now delivering, too. The $5 billion (U.S.) Athabasca Oil Sands Project that Shell and ChevronTexaco opened in Alberta last year is now pumping 155,000 barrels per day. And to our south, Venezuela's Orinoco Belt yields 500,000 barrels daily.

But here's the catch: By simply opening up its spigots for a few years, Saudi Arabia could, in short order, force a complete write-off of the huge capital investments in Athabasca and Orinoco. Investing billions in tar-sand refineries is risky not because getting oil out of Alberta is especially difficult or expensive, but because getting oil out of Arabia is so easy and cheap. Oil prices gyrate and occasionally spike -- both up and down -- not because oil is scarce, but because it's so abundant in places where good government is scarce. Investing $5 billion dollars over five years to build a new tar-sand refinery in Alberta is indeed risky when a second cousin of Osama bin Laden can knock $20 off the price of oil with an idle wave of his hand on any given day in Riyadh.

Contrast this to geologist Kenneth Deffeyes' argument that the world's oil production has peaked. From the summarry describing the presentation given by Mr. Deffeyes on August 22, 2005, again on Book TV:

Beyond Oil: The View from Hubbert's Peak
from August 22, 2005

Geologist, author, and Princeton University professor Kenneth Deffeyes writes that world oil production is no longer increasing in his new book, "Beyond Oil: The View From Hubbert's Peak." The title of the book comes from petroleum geologist M. King Hubbert, who formulated that the world's oil production would reach its peak in 2000 and begin to decline rapidly until the global fossil fuel supplies went dry. Mr. Deffeyes believes that the world's oil production would peak at the close of 2005 and that the eventual absence of fossil fuels would have a devastating and potentially catastrophic effect on world economies. The book also lists the potential replacement fossil fuel energy sources and the ways in which they can be utilized effectively.