There are articles in the news that indicate that our oil is running out. Consider the recent New York Times article: Oil Price Rise Fails to Open Tap (New York Times, By JAD MOUAWAD Published: April 29, 2008).

Rising oil prices have historically created two effects, according to Fatih Birol, the chief economist at the International Energy Agency in Paris. “They reduce demand and they induce oil supplies. Not this time.” Indeed… the high prices normally “attract” new supplies. But things appear to be getting worse, not better, and no new supplies are forth-coming. Why? The answer is simple: they either don’t exist or have become prohibitively difficult to locate. Jeff Rubin, an analyst at CIBC World Markets predicted a bleak forecast for oil supplies, saying that the current conditions signal “a period of unprecedented scarcity.” He also indicated that oil prices might exceed $200 a barrel by 2012, which equates to $7-a-gallon gasoline in the United States. Time will tell, but that estimate may be optimistic.

Some of the problem is above ground: management, labor laws, transportation and licensing fees, but this blog is focused more on the problems BELOW the ground: oil is simply running out. Norway’s oil production peaked in 2001 and has since declined by 25 percent. Britain’s output has declined 43 percent in that same amount of time. The Prudhoe Bay field in Alaska peaked in the late 1980′s and has since dropped by 65 percent. There