ABSTRACT
Since the first price explosion of 1973, a strong consensus has ruled public and official opinion. The old price levels were insupportable because of the pressure of growing consumption on scarce resources. Mineral reserves are renewable. They are constantly renewed by investment of billions every year in finding and development. In the industrial countries, oil intensity, the amount consumed per unit of gross national product, began to decline immediately after the first oil shock, and accelerated after the second. US oil output has stabilized, and even increased a little in the last five years, even excluding Alaska. Soviet oil output has begun a slow contraction, and is maintained at high and rising marginal cost. The UK tax system was made more flexible when prices declined, and the result was more drilling.
