Hi!
A couple of points:
In the face of rising demand, and rising prices, how come 2007 production was below 2006?
Point One, above:
"Although there is mathematical certainty about the fact that at some
point conventional crude oil production will peak
...
for every 10 percent increase in oil prices, reserves
increase by 8.9 percent in the long run."
He just contradicted himself. He said that the supply of oil is finite, and then he said inthe long run, as prices go up, reserves will go up. Can NOT happen if the supply is finite.
Point 2:
"...high prices may likewise induce more production..."
This, again, assumes the supply is infinte. In the long run, oil is finite. In the "Short Run" the above is true....the question is, what is short-term? In other words, how long 'til Peak Oil, because once oil has peaked, by definition, every year's production of oil following the peak will be less, which does not work with increasing demand. The author, basically, is saying in Point 2, that Peak Oil is DECADES away. The PO people are saying that it will be between 2008, and 2010/2012.
Point 3:
The main source of non-liquid oil is shale, and today, we are burning tommorrow's supply of Natural Gas to make the oil. Not very nice.
Point 4:
New supply in the next 2 Decades. And if Oil Peaks between 2008 and 2012, it will not be nice to wait 20 years for more oil.
Basically, CATO is making an economic argument about a physical resource. Oil doesn't care how much money you have. It is oil, and when you burn it, it is gone.
CATO's economic-type argument does apply to sun power (solar, wind water, etc.). Sun power is, basically, unlimited, and that is what we should be focusing our time, energy, and resources on developing.
cliff
NBO