Physical scientists are prone to viewing hydrocarbons as a fixed quantity. Being fixed, this volume must deplete with production. Extraction costs and thus selling prices must rise. The crisis is only a matter of when [“What will we do when the pumps run dry?” asked Paul Ehrlich and Anne Ehrlich in 1974 (The End of Affluence (p. 49)] . Physicist John Holdren is no exception to this view.

Reality is quite different from the hard science formulation, however. In a business or economic sense, mineral resources are not fixed, known, or depleting. They are created by entrepreneurship (“resourceship”) in a market economy where incentives are present and technology improves. Mineral quantities can and do expand over time as shown by time-series data of estimated world resources.…

[Editor Note: An earlier series at MasterResource on John Holdren, President Obama’s science and technology advisor, is being reprinted given the recent controversy surrounding Dr. Holdren’s earlier views. This original post is dated January 2, 2009.]

Physical scientists are prone to viewing hydrocarbons as a fixed quantity. Being fixed, this volume must deplete with production. Extraction costs and thus selling prices must rise. The crisis is only a matter of when [“What will we do when the pumps run dry?” asked Paul Ehrlich and Anne Ehrlich in 1974 (The End of Affluence (p. 49)] . Physicist John Holdren is no exception to this view.

Reality is quite different from the hard science formulation, however. In a business or economic sense, mineral resources are not fixed, known, or depleting. They are created by entrepreneurship (”resourceship”) in a market economy where incentives are present and technology improves.…

Editor note: Julian Simon is a primary inspiration for this free-market energy blog, the name of which comes from his characterization of energy as the master resource.

Twelve years ago today came the shocking news: Julian Simon, age 65, had died of heart failure after his regular morning workout in Chevy Chase, Maryland. He had undiagnosed heart disease.

Just two months before, I had visited extensively with Simon when he came Houston to give what would be his last major address, titled: “More People, Greater Wealth, Expanded Resources, Cleaner Environment.” A full house of 200 heard Simon that day, and one in attendance, free-market entrepreneur Gordon Cain, was so impressed that he mailed Simon an unsolicited $25,000 check for research.

Simon invited me to coauthor an energy paper with him for a conference he was planning.…

At the NARUC Winter Meeting in Washington D.C. last week, a Study Group composed of regulatory commissioners, consultants, government and university economists, and non-profit association sponsors released their energy research report: ANALYSIS OF THE SOCIAL, ECONOMIC AND ENVIRONMENTAL EFFECTS OF MAINTAINING OIL AND GAS EXPLORATION AND PRODUCTION MORATORIA ON AND BENEATH FEDERAL LANDS
(Assessment of the Combined Relative Impacts of Maintaining Moratoria and Increased Domestic Onshore and Offshore Oil and Gas Resource Estimates).

The just released study, prepared by Science Applications International Corporation (SAIC) and subcontractor Gas Technology Institute (GTI), makes a resounding case for the federal government to consider exploration and production on land and offshore for the common good.  And far from being an ‘industry group’, the ‘Moratoria Study Group’ represented a formidable national body of public and private energy experts whose study found that consumers, the national economy, vast new employment potential  and national defense could benefit from plentiful, affordable and reliable domestic energy resources.…