Are We Wise? From Coal to Oil — Preserving Our Future with a Strategic Oil Reserve
“Are we wise in allowing the commerce of this country to rise beyond the point at which we can long maintain it?”
William Stanley Jevons, The Coal Question (1865)
In 1865, William Stanley Jevons posed a terrifyingly appropriate question for Victorian Britain: could an economy built on coal endure once reserves ran thin? He saw that coal was not a limitless power, but rather the foundation of a society whose survival depended on its extraction. His warning was clear: economic growth must heed geological limits (Jevons, 1865).
Today, oil plays Jevons’ former role. Planes, factories, shipping, and the very scaffolding of modern life depend on it. Yet, unlike the historic hope in vast coal seams, global oil production now relies increasingly on small, short‑lived fields, costly unconventional sources, and ageing giants with steep decline rates (Höök et al., 2009; Sorrell et al., 2010). Energy Return on Investment (EROI), once hundreds to one in conventional wells, now hovers near ten‑to‑one or even lower for shale and deep‑sea oil (Gagnon et al., 2009).
“The reserves” we cite are not infinite stores, only those deposits that remain economically viable to extract. As extraction costs climb and energy returns fall, effective reserves shrink, even if underground stores remain on paper. Meanwhile, at every level, from sovereign debt to corporate valuations, the global economy assumes endless cheap oil. Admitting otherwise risks destabilisation in(IEA, 2018; Laherrère, 2010).
Subsidies and the Illusion of Abundance: The U.S. Case
This illusion is reinforced by ongoing U.S. subsidies for oil, even at the pump. Federal tax code provisions, like the intangible drilling costs deduction and the historically persistent oil depletion allowance, continue to funnel billions into the industry. These subsidies distort market signals and undercut the incentive to shift toward renewables while making it easier to maintain the fiction of perpetual supply (CBO, 2016; Food & Water Watch, 2025; Washington Post, 2025).
What if the last useful barrels of oil were not burned in despair, but deployed with strategic purpose? We must preserve oil as a building block for the future: to manufacture renewable energy infrastructure, facilitate recycling and material recovery, and smooth the transition into a low‑carbon, circular economy. Without such foresight, society risks burning through its bridge to tomorrow before it’s built (Mitchell et al., 2015; Lazarus & van Asselt, 2018).
The economy breaks not when oil vanishes, but when marginal barrels, those requiring extreme capital, energy, and compromise to extract, no longer yield a net benefit. Markets may conceal this moment, but as extraction economics deteriorate, the cost of survival becomes unaffordable (Murphy & Hall, 2011).
Jevons asked if we were wise to push commerce beyond what coal could support. Today we must ask: Are we wise to squander the last accessible oil barrels without reserving enough to build the sustainable future that follows? The answer must be no. Our economics, our climate, and our civilisation demand that we transition - not collapse.
References
CBO (2016). Energy Subsidies in the United States. Congressional Budget Office. https://www.cbo.gov/publication/50980
Food & Water Watch (2025). Fossil Fuel Subsidies and Budget Reconciliation. https://www.foodandwaterwatch.org/2025/05/07/fossil-fuel-subsidies-budget-reconciliation/
Gagnon, N., Hall, C. A. S., & Brinker, L. (2009). A preliminary investigation of the energy return on energy investment for global oil and gas production. Energies. https://www.mdpi.com/1996-1073/2/3/490
Höök, M., Hirsch, R., & Aleklett, K. (2009). Giant oil field decline rates and their influence on world oil production. Energy Policy. https://doi.org/10.1016/j.enpol.2009.02.020
IEA (2018). World Energy Outlook. International Energy Agency. https://www.iea.org/reports/world-energy-outlook-2018
Jevons, W. S. (1865). The Coal Question. https://archive.org/details/coalquestion00jevouoft
Laherrère, J. (2010). Oil and natural gas resource assessment. Energy Policy. https://doi.org/10.1016/j.enpol.2010.01.013
Lazarus, M., & van Asselt, H. (2018). Fossil fuel supply and climate policy: exploring the road less taken. Climatic Change. https://doi.org/10.1007/s10584-018-2266-3
Mitchell, J., Marcel, V., & Mitchell, B. (2015). Oil and Gas Mismatches: Finance, Investment and Climate Policy. Chatham House. https://www.chathamhouse.org/2015/07/oil-and-gas-mismatches-finance-investment-and-climate-policy
Murphy, D. J., & Hall, C. A. S. (2011). Energy return on investment, peak oil, and the end of economic growth. Annals of the New York Academy of Sciences. https://doi.org/10.1111/j.1749-6632.2010.05940.x
Sorrell, S., Miller, R., Bentley, R., & Speirs, J. (2010). Global oil depletion: A review of the evidence. Energy Policy. https://doi.org/10.1016/j.enpol.2010.04.046
Washington Post (2025). Senate passes tax bill expanding subsidies for oil while cutting renewable energy incentives. https://www.washingtonpost.com/business/2025/06/18/climate-solar-oil-tax-senate-trump/