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The Oil Crisis: This Time the Wolf Is Here

James E. Akins
April 1973
Summary: 

Oil experts, economists and government officials who have attempted in recent years to predict future demand and prices for oil have had only marginally better success than those who foretell the advent of earthquakes or the second coming of the Messiah. The recent records of those who have told us we were running out of petroleum and gas are an example. Oil shortages were predicted in the 1920s, again in the late thirties, and after the Second World War. None occurred, and supply forecasters went to the other extreme: past predictions of shortages had been wrong, they reasoned, therefore all such future predictions must be wrong and we could count on an ample supply of oil for as long as we would need it.

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Oil experts, economists and government officials who have attempted in recent years to predict future demand and prices for oil have had only marginally better success than those who foretell the advent of earthquakes or the second coming of the Messiah. The recent records of those who have told us we were running out of petroleum and gas are an example. Oil shortages were predicted in the 1920s, again in the late thirties, and after the Second World War. None occurred, and supply forecasters went to the other extreme: past predictions of shortages had been wrong, they reasoned, therefore all such future predictions must be wrong and we could count on an ample supply of oil for as long as we would need it.

It was the popular, almost universal theory of the 1960s-still vigorously defended today by a few of its early proponents-that this abundant supply of oil, whose cost of production was very low, and which was found in all corners of the earth, would soon be sold at its "proper" economic price- apparently $1.00 per barrel or less-and for some time it was confidently predicted that this price would prevail in the Persian Gulf by 1970.

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