[A scientist was addressing a luncheon gathering and mentioned that the sun would burn out in 4 billion years. A woman in the front, alarmed, asked him to repeat the number, which he did. “Thank goodness!” she exclaimed, “I thought you said ‘million'” Traditional physicist joke.]
Many of those writing on oil markets, energy security, commodity prices, and energy policy often cite, with great authority, the fact that “X is finite.” This can be seen both in the general press, such as the recent story in the New York Times on Abu Dhabi’s effort to diversify away from oil revenue, and in more detailed reports, such as the one written for the Army: “Energy Trends and Their Implication for US Army Installations.”
In the words of Vijay Vaitheeswaran of the Economist, “So what?” I have had this comment, that “x is finite,” made to me repeatedly, and I ask the questioners why they think it matters, to which they usually reply, “Well, it means production has to peak.”
But after all, isn’t everything effectively finite? Coal is finite, minerals are finite, and so forth. Even renewables rely on the sun for power, and the sun’s fuel is finite. So why should this mean we have to be concerned.
Or looked at another way: wasn’t oil always finite? A hundred years ago it was finite, but so what? What action should any government have taken then to respond to its finite nature that would have been meaningful.
The point is, as the lady in the anecdote above understood, that numbers matter. Finite is not scarce and it makes a huge difference whether or not the number is large or small, not whether it is finite.