A Free-Market Energy Blog

“Finite” Is Not “Scarce”

By -- January 18, 2009

[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.


  1. quanticle  

    Another issue that ought to be considered is how quickly production drops off after it hits peak. The speed of the drop-off will determine whether the market will have sufficient time to fund alternative energy to the point where it becomes a viable alternative for fossil fuels.


  2. mlynch  

    Well, since it’s hard to find evidence of a peak and dropoff occurring for a mineral/energy resource, this is hard to address. Primarily, peak oil advocates argue that the global peak will look like that for a given field, basin or country, which is absurd. There have been numerous peaks (Texas, US, onshore) which did not affect global trends.
    Mike Lynch


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