Before now, one of the major underlying factors to why the oil situation is not likely to improve never crossed my mind.  I have read plenty of articles concerning oil, peak oil, and other thoughts on oil and our dependence on it.  I’ve got to say, I’m a believer in peak oil - the point when maximum production is reached, and production declines to no production (Wikipedia has an extensive discussion on peak oil).  However, put aside all the talk of peak oil, production, supply and demand, and take a gander at Foreign Policy’s interview with Fatih Birol, chief economist for the International Energy Agency.

The interview is an interesting read.  However, what really caught my attention was the question about why new supplies aren’t coming online.  The last statement of his answer made the light bulb go off in my head.  It was one of those, oh yeah, no crap moments in life.  The statement:

[T]he bulk of the growth in the future needs to come from the national oil companies, and perhaps price will no longer be the main determinant when they make their [production] decisions, because for many countries, oil is their only natural endowment. And those countries legitimately value and want to leave their one and only natural endowment for future generations.

Once I read the statement, I instantly realized that the problem with oil supplies are not as simple as drilling for more oil.  It’s a matter of survival for the countries with oil supplies.  It’s not supply and demand - it’s survival.  It’s the controlled release of a scarce/sacred “natural endowment” from countries that otherwise have little to no chips in the game of prosperity.  If we’re going to beat the rising cost of oil, we’ve got to understand it’s more than just increasing supply.  We’ve got to figure out how to ensure survival for the countries with oil supplies.