Here's some random facts to illustrate how inelastic supply of oil is once an oil province hits it’s “Hubbert Peak” and the super giant fields deplete...
In 1972, Texas produced more oil than ever before, up by 40 percent during the previous 10 years at relatively low prices. In the next 10 years, the price of oil increased ten fold (1000%). Drilling exploded far above any historic record. The success rate plummeted, the number of producing wells increased by only 14%, and oil production dropped back to 1962 levels in 1982.
1962-1972 Texas
Price stable, up slightly
Production +40%
1972-1982 Texas
Price +1000%
Production –28%
2002-2015 Saudi Arabia ?
The last two super giant oil fields found in the world were both found in Kazakhstan. One in the late 1980s and the other in 2000. The last field, Kashagan (expected to produce 1 million b/day at peak) is now thought likely to go into production in 2012 and full production shortly thereafter. (ANWR has about a 5% probability of being a supergiant per one estimate (USGS ?)).
10% of all the oil ever consumed was consumed in GW Bush’s first term. By some estimates, 10% of all the conventional oil left will be consumed in his second term. This is the power of exponential growth.
EROEI (Energy return on energy invested) is declining for oil production from 100:1 in 1960s (world wide) to 8:1 today. Energy used in oil production is largely oil and natural gas.
Corn ethanol has an EROEI of about 1.3:1, sugar cane ethanol 6 to 8:1 (better with manual harvesting), Canadian tar sands are about 4:1.
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