Oil will run dry before substitutes roll out

At the current pace of research and development, global oil will run
out 90 years before replacement technologies are ready, says a new
University of California, Davis, study based on stock market

The forecast was published online Monday (Nov. 8) in the journal
Environmental Science & Technology. It is based on the theory that
long-term investors are good predictors of whether and when new
energy technologies will become commonplace.

“Our results suggest it will take a long time before renewable
replacement fuels can be self-sustaining, at least from a market
perspective,” said study author Debbie Niemeier, a UC Davis professor
of civil and environmental engineering.

Niemeier and co-author Nataliya Malyshkina, a UC Davis postdoctoral
researcher, set out to create a new tool that would help policymakers
set realistic targets for environmental sustainability and evaluate
the progress made toward those goals.

Two key elements of the new theory are market capitalizations (based
on stock share prices) and dividends of publicly owned oil companies
and alternative-energy companies. Other analysts have previously used
similar equations to predict events in finance, politics and sports.

“Sophisticated investors tend to put considerable effort into
collecting, processing and understanding information relevant to the
future cash flows paid by securities,” said Malyshkina. “As a result,
market forecasts of future events, representing consensus predictions
of a large number of investors, tend to be relatively accurate.”

Niemeier said the new study’s findings are a warning that current
renewable-fuel targets are not ambitious enough to prevent harm to
society, economic development and natural ecosystems.

“We need stronger policy impetus to push the development of these
alternative replacement technologies along,” she said.

About UC Davis

For more than 100 years, UC Davis has engaged in teaching, research
and public service that matter to California and transform the world.
Located close to the state capital, UC Davis has more than 32,000
students, more than 2,500 faculty and more than 21,000 staff, an
annual research budget that exceeds $679 million, a comprehensive
health system and 13 specialized research centers. The university
offers interdisciplinary graduate study and more than 100
undergraduate majors in four colleges — Agricultural and
Environmental Sciences, Biological Sciences, Engineering, and Letters
and Science. It also houses six professional schools — Education,
Law, Management, Medicine, Veterinary Medicine and the Betty Irene
Moore School of Nursing.

Additional information:

Full text of study, “Future Sustainability Forecasting by Exchange Markets” — http://pubs.acs.org/journal/esthag

Media contact(s):

Debbie Niemeier, Civil and Environmental Engineering, (530)
752-8918, [email protected]

Nataliya Malyshkina, Civil and Environmental Engineering,
[email protected]

Sylvia Wright, UC Davis News Service, (530) 752-7704,
[email protected]

View this story on the Web at

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1 thought on “Oil will run dry before substitutes roll out”

  1. Oil was forecast to run out well before now. In fact a 1972 study had oil reserves being depleted by 1992. These kinds of scare tactics serve no real useful purpose other than selling books.

    True, the kind of modelling that was so inaccurate in 1972 has been refined. And the predictions in your article might be significantly more accurate. But until one of these Malthusian predictions actually comes to pass, it remains bad science.

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