One of my favorite authors is Michael Fumento – he has published a number of excellent books and articles during the past 20 years. However, I think his logic is a bit weak when it comes to his recent article about the use of oil sands as a replacement for other oil supplies.
There is no doubt that there is a vast quantity of energy stored in the oil sands of Canada and the bitumen areas of Venezuela. The issue is the rate at which these resources can be mined, refined and transported to the market, not the magnitude of the resource.
As Fumento explains, the process of producing oil from these unconventional sources is difficult and resource intensive; developing the physical infrastructure necessary to equal the annual production of conventional oil wells is not economic. Part of the problem is that the required equipment and pipelines would be too large to move once they are built, but rapid production implies rapid resource depletion.
Even if there is plenty of oil in the world, there will still be huge economic disruption and dangerous resource competition if the rate at which it can be brought to market is significantly less than the rate at which consumers want to use it. If I need 4 gallons of gas per day to get to work and back, a system that can only supply 2 gallons per day will only suffice if I skip work every other day.