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Once Again, BP Shows It's Human Ingenuity Which Creates Natural Resources Like Oil - Continental Telegraph
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Once Again, BP Shows It’s Human Ingenuity Which Creates Natural Resources Like Oil

Another useful little example of Julian Simon’s great contention, that the Ultimate Resource is human ingenuity – for BP says it has created a billion barrels more oil by applying that human ingenuity to the task off trying to get oil. That is an increase in mineral resources brought about by just that ultimate resource:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]BP unlocks a billion oil barrels in Gulf of Mexico with new technology[/perfectpullquote]

Now, you can indeed say that BP hasn’t gone and made some new oil but that’s to miss our very definition of a mineral resource. Every time we talk about reserves or resources we are referring to the stuff that we can actually use. None of those estimates and numbers you see bandied about are of the amount of whatever that exists. They’re all, near without exception, numbers for what we know we can dig up using current technology at current prices and still make a profit.

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]BP said it has discovered two new oilfields in the Gulf of Mexico and has identified an additional billion barrels of oil at an existing field thanks to new seismic technology.[/perfectpullquote]

Those two new fields, sure, that’s just traditional exploration. But that billion barrels now available through new technology. There’s a bit of this that everyone forgets. Which is that if we’ve now got this new technology – derived from our ultimate resource of human ingenuity – for this one little area off the world we’ve now got the entire rest of the world to apply this new technology to.

And it’s that which really makes the difference. Think to that Simon/Ehrlich bet about resource prices. As it happened one of the elements chosen was copper. And the period of the bet covered the time when we changed copper processing possibilities. It used to be that we only got copper from copper sulphate deposits. That’s the way we’d been doing it since the Bronze Age. But now we could process copper oxide deposits. This doesn’t mean that we could now process just that one oxide deposit we first built a factory for. It meant that we could and should explore an entire world again for copper oxide deposits.

To any reasonable level of truth we’d just created an entire world full of new copper deposits that is. BP’s just done the same with this new technology on oil fields. It doesn’t just apply to this one field, it applies to all fields everywhere – or at least potentially so.

Which is the truly important part about how we create mineral resources. Each new extraction development gives us the entire globe to exploit again.

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Tim Worstall

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  • We're running out of trees! There's nothing left to generate heat to power industry! We've looked *everywhere* for trees, and there's none left!
    Oo, you know these weird black rocks all over the place, this thing called a "chimney" lets you convert them into useful energy. Wow, there's weird black rocks *everywhere*!

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Tim Worstall

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