Looking Ahead: Peak Oil, Tight Oil or Neither?
A better energy source may one day supplant oil, as oil supplanted coal, which in turn supplanted wood. And it is likely that crude will soon play a less significant role in global energy production.
Price rises have often been accompanied, however, by the fear that the world is running out of oil. The reasoning is that oil's characteristic as a finite resource should make it more expensive, the more of it is consumed - particularly once ready supplies have been exhausted. But oil is unlikely to run out, especially if one broadens the definition to include tight oil, oil shale and tar sands. Storage costs aside, the real cost of oil is today in line with where it stood in 1870.
Price cyclicality has made oil a trying long-term investment. John D. Rockefeller tried speculating in the 1860s – he created a vast lake of oil, calculating that he would be able to sell it for a premium when his competitors’ supplies were depleted. Unfortunately, his first consignment exploded, and the rest evaporated at a rate of 1000 barrels/day. The dire shortage never came.