Progressive eggheads used to promote the concept of “peak oil”: the idea that oil production had already peaked and would soon run out, leading to ever higher oil prices as oil grew scarce. They predicted the scarcity would get even worse as humanity multiplied in number, resulting in more motorists competing for ever dwindling supplies of oil. They noted that the number of cars had risen from 50 million in 1950 to 500 million by 1990. Today, there are 1.5 billion cars in the world.
But oil production hadn’t peaked. Oil production is at an all-time high. As the population of the world more than tripled, oil became more affordable — although gas prices vary enormously from country, mainly due to different countries taxing gasoline very differently (and in some cases, subsidizing it).
The Doomslayer explains:
Since 1950, the time price of gasoline for US blue-collar workers has fallen by 35 percent. For the time it took to earn enough money to buy a gallon of gasoline in 1950, today’s blue-collar workers can buy 1.54 gallons. That means personal gasoline abundance has increased by 54 percent.
Crude oil is refined to make gasoline, and the market for crude oil is global. Since 1950, the world population increased by 229 percent, from 2.5 billion to almost 8.2 billion….
In the 1970s, people obsessed over the number of barrels of oil in proven reserves. They thought we had discovered all the oil. By dividing the quantity in proven reserves by the annual consumption, they calculated the date we would run out….
The lesson of gasoline over the past 74 years is that as the price increases, we find more of it, and we find more productive ways of using it. Then the price goes down. That has been true for all kinds of products, not just gasoline.
Gas prices vary enormously from country to country, notes Gale Pooley:
The average price of gasoline around the world is U.S. $5.03 per gallon. However, there is substantial difference in these prices among countries due to the various taxes and subsidies for gasoline. All countries have access to the same petroleum prices of international markets but then decide to impose different taxes. As a result, the retail price of gasoline is significantly different.
The money price of 16 selected countries ranges from $2.26 in Russia [and $3.82 in the U.S.] to $8.55 in Denmark.
But incomes are higher in the U.S. than in all but a handful of countries in the world, and in those few wealthy countries, gas prices are much higher than in the U.S. So “of the 16 countries analyzed, the U.S. is by far the most affordable place to buy gasoline” for its citizens. There are four other countries in the world where gasoline is more affordable — like Qatar, where gas prices are $2.18 per gallon, and Kuwait, Libya & Iran, where it is even cheaper — but in those four countries, “the price is heavily subsidized by government.”
Global oil production has risen, reaching an all-time high in 2023, the most recent year for which data is available. Oil production has also risen in the United States, debunking false predictions made 20 years ago that the U.S. had reached “peak oil.” Oil has become the most productive U.S. industry, says Bloomberg News.
Twenty years ago, people wrongly wrote off the U.S. oil industry as a dinosaur. U.S. oil production fell in the 1970s, so people wrongly predicted that oil production would continue to fall ever thereafter — the “peak oil” theory. Based on this prediction, there was even a weekly newspaper column called “peak oil“, written by the progressive former CIA analyst Tom Whipple, the husband of Democratic politician Mary Margaret Whipple.
But then the fracking revolution came, and oil production boomed. The “peak oil theory was effectively falsified when United States oil production began to increase in 2009 and surpassed the 1970 peak in 2018.”
Technological change has continued to expand oil production in the U.S., making America the world’s biggest oil producer by a substantial margin.
