Future oil crisis:
Will demand outrun supply?

May 11, 1996
Web posted at: 6:55 a.m. EDT

From Correspondent David Mattingly

(CNN) -- No one is comparing this year's jump at the gas pump to the long lines and staggering price increases of the 1970s. But a new report by the World Resources Institute says the world may be 10 to 20 years away from the time when oil supplies can no longer meet demand.

"Based on about 40 reports made over the last five decades by oil industry analysts and government analysts and think tanks, it looks to me as thought between the year 2005 and 2015, global oil production is going to start declining," said the Institute's James MacKenzie. (170K AIFF or WAV sound)

The United States uses about one-third more oil today than it did in 1973, with expectation of another one-third increase by the year 2010. But by then, MacKenzie says, the party may be over. As we run out of oil sources, the shortage will cause massive price increases.

Oil industry leaders say they've heard it all before.

"The level of proved reserves at nearly a trillion barrels is roughly equal to 50 years at current rates of production," says Len Bower of the American Petroleum Institute. "We have not seen any signals in the marketplace that indicate we are experiencing any scarcity or that we are about to." (119K AIFF or WAV sound)

American oil consumption habits, and even laws, have changed in response to how much we pay at the pump. The big price jumps of the 1970s inspired the energy-saving nationwide 55-mile-per-hour speed limit. Lower prices in recent years led to the restoration of higher speeds on many highways -- as interest in conservation slowed to a crawl.

Fuel economy rose steadily from the mid-70s to the early 1990s, but the rise in popularity of low-mileage minivans, pick-ups, and sport utility vehicles caused the trend for high gas mileage to stall out recently.

Today, two-income families and longer commutes have Americans driving about one-third more than in 1973. Despite the uproar over recent gasoline price increases in the United States, nationwide, prices are still well below levels elsewhere -- a fact that many hinder domestic development of gasoline alternatives.

"Alternative fuels are competing against, in this country, low gasoline prices, and I think they will make in-roads faster in Europe and in Japan, where fuel prices are much higher," MacKenzie says. (102K AIFF or WAV sound)

The interest in lower speed limits, higher gas mileage, and development of less-polluting alternative fuel vehicles may rise and fall with fuel prices. But those who are looking at the future after fossil fuels know that our wallets are still in the driver's seat.

Related sites:

• World Resources Institute
• American Petroleum Institute
• Oilweb

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