Gusher
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Crude oil reserves. The problem with this number, be it 40 years or 80 years is that it's pointless. You can't produce at full speed until the well is dry.
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When the well is getting near dry, you are producing at somewhat reduced capacity, that is true. But this effect is not the important point. What's important is to get a meaningful figure out to guide us. When the reserves-to-production ratio rises, that means something, as it does when it drops. And knowing that we have ahead of us "40 years" also means something.
At least, it should.
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It's ... somewhat intellectually dishonest to report numbers quoting "today's production" when demand is growing.
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That's a standard compromise in finance. It's the same way you assess a company's performance at year's end : You take a snapshot which freezes the company's position at the 31st of that year and shows you receivables, payables, 12-month earnings, etc, at that point in time.
It's not perfect but it does the job.
Therefore, what one should do is take into account both the photograph (:current state of production) and the coming attractions (:forecasts of production growth).
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As for the argument on why not more refineries are built, there are other explanations possible, more or less likely.
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I would really like to know about them. (I trust you are not talking about regional problems, such as environmentalists stopping the construction of a refinery.)
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The thing I don't get is that if we will have demand growing even more the coming years, as seems to be the forecasts, then why [would Big Oil] believe prices will come down?
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I would tell you but then I'd have to kill you.
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