The world petroleum market: History and institutions

Abstract

After World War II, petroleum has become the predominant energy source worldwide. From 1945 to 1973, its production increased eightfold and its share in energy consumption rose from 23 to 47%.¹² This tremendous increase did not cause any problems as long as huge oil findings were made that increased the stock of known reserves even faster. It was in the early seventies when the finiteness of natural resources became an issue of public interest. The most popular publication was “Limits to Growth” by Meadows et al (1972). They reported (p. 58) that, given a growth rate of 3.9% per year, which at that time seemed to be a realistic forecast, proven petroleum reserves would be exhausted within twenty years. In the meantime, this estimate of the exhaustion period has turned out to be by far too pessimistic because of new additions to reserves and the demand slowdown. However, exhaustibility remains one of the major characteristics of the natural resource petroleum.