1. One More Puzzle: Oil Science & Public Policy Stephen M. Maurer Jan. 26 2006 - Lecture 2

2. Introduction Science Interacts With Society… Courts Use Science Decision-makers Use Science Society Invests in Science Not All Science is Public! Economics & Science

3. Oil

4. A Simple Exploration Model: Every Year, The Industry Sends Out 10,000 Workers to Look for Oil Time Discovery Rate (BBLs)

5. Oil: The Hubbert Curve US Peak – 1980 World Peak - 2000

6. Oil Winston Churchill (1911) US Navy (1911) Teapot Dome/Strategic Petroleum Reserve M. King Hubbert (1956) Paul Ehrlich and The Club of Rome (1971) Current Estimates 10 years or 50? 1350 billion barrels (1969) vs. 3021 billion (2000) Predictions

7. Oil: The Hubbert Curve Why Geologists Believe the Hubbert Curve Example: US Exploration Why Economists Don’t. Examples: Nazi Germany, Saudi Exploration, Capital Markets Who’s Right?

8. Oil: Implications Implications for Politics “Finding a billion barrels here and a billion barrels there doesn’t change the nature of the argument.” – World Resources Institute Implications for Policy “It doesn’t matter when the oil runs out, it’s going to run out eventually.” – Steven Chu

10. Pre-HistoryWas There Sufficient Innovation? Ancient WorldIrrigation Economies Pyramids as Industrial Research Patrons and Prizes Archimedes, Consultant Dyonysius The Library of Alexandria Middle AgesPatrons, Courts, Prizes Knowledge & Commerce Early Modern Frederick the Great, George III Europe

11. 19 th CenturyIn-house expertise, agriculture, resource mapping Foundations & The Birth of Big Science World War IAviation 1930sBig Science Between the Wars World War IINuclear Weapons, Radar, etc., etc. Penicillin.

12. 1946Vannevar Bush, Science, The Endless Frontier Post-WarHarley Kilgore & NSF Legislation Physics (ONR) Health & General Science

14. KoreaNuclear Weapons, Electronics Sputnik & The Space RaceAerospace, General Science Vietnam Energy CrisisEnergy & Fusion Research CompetitivenessComputing, Engineering, Electronics End of Cold War Bush AdministrationHealth

15. Current Budget = Fossilized History?

16. National Defense54% Health23% Space & Aeronautics 9% General Science & Basic Research 6% Pollution Control 2% Conservation, Resource Mapping & Weather 2% Agriculture 2% Energy 1% Other 1%

17. DOE Expenditures ($2.3 billion) Nuclear and high energy physics37% Fusion and energy research 36% Advanced scientific computing 5% Human genome research 4% Other types of biology and environmental research 15% Other 3%

18. NSF Expenditures ($2.7 billion) Mathematics and physical sciences 28% Earth sciences 18% Biology 15% Engineering 14% Computer science 14% Other11%

22. NIH Budget$27.9 billion(2004) $13.6 billion (1998)

27. Lawrence Berkeley Lab Stockpile Stewardship Computing Biology & Genomics Terrorism

30. Who pays for R&D? Top: Government ; Bottom: Industry

32. Top: US Funding to industry. Bottom: US Funding to universities