Editorial: Oil shortage is ‘real’

Tuesday, Aug. 23, 2005 | 11:37 a.m.

Writer Peter Maass penned some sobering words for Sunday's New York Times magazine. In a cover story headlined, "The beginning of the end of oil?", Maas quashed the notion that consumers can feel as confident now as they did during past periods of climbing gas prices. "Unlike the 1973 crisis, when the embargo by the Arab members of the Organization of Petroleum Exporting Countries created an artificial shortfall, today's shortage, or near-shortage, is real," Maas wrote.

The reason for the urgency has less to do with in-ground supply, which is still relatively plentiful, and more to do with "capacity" for pumping it out, Maass wrote. Demand for oil (particularly from the United States and China) has grown to the point where it is about equal to the pumping capacity at the world's oil fields. This is both a function of geology and technology. With most of the world's oil fields pumping at near capacity, a major disruption at any of them could send the price of oil to more than $100 a barrel (compared to $60-plus now), causing worldwide economic havoc. Annual discoveries of new oil reserves are "falling increasingly short of annual consumption," meaning the day when demand outstrips supply is foreseeable, the article stated.

None of this means worldwide calamity is just days away. But it does mean we have to stop believing that alternatives to oil will be the responsibility of generations way off in the future. Responsible analyses, such as Maass', all show oil to be a risky proposition even for the short term. We believe Nevada, with its potential for producing solar and wind power, should step up and become an early leader in the coming world of alternative energy.