We store oil and we find more places to extract it. Furthermore, as consumption leads to higher prices, we will produce more efficient and productive ways to extract it.
We've already extracted the lion's share of the fast, cheap, easy-to-reach stuff. What remains is slower, more expensive and harder-to-reach. Case in point: the deepwater well that's spewing 2,500 bbl of oil a day into the Gulf right now.
>Furthermore, as consumption leads to higher prices, we will produce more efficient and productive ways to extract it.
So I keep hearing. I'm highly skeptical that we can improve technique fast enough to start pumping oil out of the Alberta Tarsands at the same rate that we've been pumping it out of Ghawar for the past forty years.
That's the real issue: whether some combination of conservation, new sources and new techniques can somehow manager to cover the escalating annual shortfall in conventional production, without painful demand destruction via price spikes.
My sense from studying this stuff of the past several years is that we're going to spend a long time behind the eight-ball, lurching from economic crisis to economic crisis while our real living standards are slowly ratcheted down.
I don't think I'm very happy about that vision, but I suspect it is on the money.
The best solution would be to stop using oil as an energy source now with any purpose except to get us over the hump. We don't even yet know how to get over the hump, realistically. The options are solar, wind, and gravity and all of those options require so much energy that we could exhaust remaining supplies making them productive enough to satisfy us all. It will take a lot of solar panels to cover the sahara, connect it to the grid, etc.
In the meantime, we're powering inefficient combustion engines and growing corn to, you guessed it... power inefficient combustion engines...
Not to mention the fact that the ethanol itself has a lower energy density than gasoline, so mixing it in with gas is simply diluting the energy of the gas.