Planck Foundation



The availability of resources (energy and elements) has given (and will furthermore give) mankind prosperity, by use of their intellect and the societal and technological developments fueled by that intellect. When mankind run out of irreplaceable resources, prosperity certainly will disappear, unless mankind is able to use societal and technological developments for recycling irreplaceables and creating replacements. From global economic perspectives it's strange that the global economy as a plane in flight fly with the absence of a well functioning fuel tank level indicator. This could be considered as 'not wise'. The OPEC proven reserves are not as proven as they are stated by their governments: In the years '83 till '90 all OPEC nations average almost doubled their proven reserves figures due the combination of their mutual agreement of quota's based on a certain percentages of their proven reserves they've negotiate with each other in the '70ties as a price level insurance. The only reason for this rare doubling inflation where the low oil prices of that period, which had lead to a sharply declined yearly income of all OPEC countries. These for political reasons adjusted higher proven reserves figures can't be called 'really proven', but must be called 'politically caused proven' so that everybody know that they only are generate by theoretically increasing the possible output calculations of already existing fields. The reason behind the low oil prices in that period was both a some weaker world economy (just a temporarily 5% market oversupply by the market tendency influence) in the '80ties caused by the first Global Credit Crisis and also (later on) by the first an US/Saudi deal to harm the USSR export income severely as last and final phase of the Cold War by use of the so called extra 'swing' capacity of 5 million barrels a day the Ghawar Field had that days, which was by this deal used for market price manipulation, and the US paid the Saudi Government there losses caused by this managed over supply in weapon price reductions. This is the reason why Saudi Arabia was the last OPEC member that increased their 'proven' reserves numbers: to make the market supply that was needed for the USSR bankruptcy push possible within OPEC norms. The low prices period ended overnight when the US invades Kuwait to redraw the Iraqi Army back to their own borders. The low price of $ 12 suddenly grows to $ 40 levels and never went down to the low '80ties levels again.

Author: Gijs Graafland

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