HOW TO KNOW WHEN THE EXPERTS ARE WRONG.

• Date: 01 November 2019
• Author: Easterbrook, Gregg

The mind-set of the 1970s was that everything was running out, especially fossil fuels. The OPEC oil embargo caused long lines at gasoline stations and rising pump prices. The impending exhaustion of oil reserves widely was decreed by politicians, editorialists, and academics. The influential 1972 study The Limits to Growth used computer modeling--then thought to possess godlike powers-to predict that global petroleum supplies would collapse, as soon as 1992 and no later than 2022.

Natural gas was viewed as so scarce that in 1978 Congress enacted legislation that essentially banned the new use of natural gas for electricity generation, forcing utilities to burn more coal. President Jimmy Carter asked Congress to create the Department of Energy and set it off on the ultimate snipe hunt, an emergency super-subsidized project to convert coal into synthetic natural gas, justified with the claim that gas reserves "would be exhausted by the end of the 1980s." Carter declared the Persian Gulf--previously an exotic destination for the U.S. military--an American national interest. Henry Kissinger began to comment about going to war to seize Arabian oil. Grandees and toffs (these are technical terms) declared that soon oil would cost $345 a barrel, while pump prices would soar past $50 a gallon. (Money figures in this article have been converted to today's dollars.)

Now it's a generation later. Oil and gas are in such oversupply that world markets are glutted. As I write this sentence in October 2019, the best-quality crude trades at $53 a barrel; adjusted for inflation, gasoline pump prices are at the level...