World Public Opinion.org, an international collaborative internet project to “give voice to public opinion” on international issues, released the results of a recent poll that claimed, “Majorities in 15 of 16 nations surveyed around the world think that oil is running out and governments should make a major effort to find new sources of energy.”
Governments should find new energy sources? A statement like that is enough to bring tears to the glass eye of a practicing capitalist. When did a government official, especially one elected to office, ever bring a single btu to the energy market? Even in those countries where the dominant oil company is still owned by the state, energy resources are discovered and developed by geologists and engineers. Lack of fiscal autonomy has constrained production and increased the financial leverage of state-run companies like Petroleos Mexicanos. Venezuela’s production dropped sharply as President Hugo Chavez restructured participation by Western companies and squeezed cash out of Petroleos de Venezuela SA to fund social programs. Even the biggest oil producing countries in the Middle East are looking for outside investors to fund exploration and development.
Upfront investment costs are high for any energy project, with a long wait for a payoff. At the Offshore Technology Conference in Houston, Matthew Simmons, chairman of Simmons & Co. International, said the oil and gas industry will need to invest $50-100 trillion to rebuild its ageing infrastructure within the next 7 years (see OTC, p. 20). During the last boom in the 1970s, the US government underwrote financing for experiments in turning coal into methane gas. The sole commercial result was the massive Great Plains Coal Gasification Plant in Beulah, ND. When the government lifted price controls on natural gas, large gas supplies returned to the market, and it had to buy back the plant at pennies on the dollar. The US government also had to buy back many of the offshore rigs that it helped finance in that period. It could have been worse, however. Some government employee in the last energy boom floated the suggestion that the US government drill all of its offshore leases to determine how much oil and gas were there to be sure the government was getting a fair return when it sells those leases to private producers.
Poll findings
According to the poll, “A majority in the US (57%), the world’s biggest consumer of oil, believes their government is acting on the assumption that oil can remain a primary source of energy. This is also true in Nigeria (63%). However, while most Americans believe their governments’ assumptions are incorrect, most Nigerians think it is correct.” Guess it depends on the time frame in which oil can remain a primary energy source. Two years after the first oil well was drilled in 1859, an employee at the US Geological Survey announced that all the oil in the world had by then been discovered. People have been making wrong predictions about the end of oil ever since.
Respondents in 12 of the 16 nations polled said the various governments assume oil is running out and needs to be replaced. “This is especially true in South Korea (79%), China (70%), and Egypt (67%). In Iran, which is developing a controversial nuclear energy program, 63% say that oil must be replaced, while only 12%—the lowest percentage among the countries polled—say their government assumes enough oil can be found,” said the report. Azerbaijanis, by a margin of 50% to 31%, say their government assumes enough oil will be found. Russians are divided: 37% think their government assumes there will be enough oil and 34% do not.
“In 4 of 5 countries that are net oil exporters,” the report said, “the perception that their government is planning for oil running out is below the average of 53%. These include Azerbaijan (31%), Nigeria (32%), Russia (34%), and Mexico (49%). The exception is Iran, which is well above the average, with 63% believing that their government is planning for oil running out.”
Some 15,000 people were polled in 16 nations representing 58% of world population. These included China, India, the US, Indonesia, Nigeria, Russia, Mexico, Iran, the UK, France, Azerbaijan, Ukraine, Egypt, Turkey, South Korea and “the Palestinian Territories.” World Public Opinion.org is managed by the Program on International Policy Attitudes at the University of Maryland.
