Hubbert Peak
The Hubbert Peak theory, also known as the '\oil peak or peak oil' theory, is an influential economic theory regarding the long-term macroeconomic availability of oil, attributed to the geophysicist M. King Hubbert. The theory predicts that oil supply in a region will follow a pattern of a long increase of availability, a plateau or slow decline after the "peak," and a steep decline at the end. This can be applied to a single oil well, a region's supply, or the entire world oil capacity. The concept has many economic and foreign policy ramifications.
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2 Wider applications 3 Effects of a world peak 4 See also 5 Further reading 6 External links |
The theory
According to the theory, the general trend of oil availability in a single site follows this pattern. Once an oil reservoir has been spotted, production is small because the required infrastructure has not been developed and the oil cannot easily flow. Step by step, more wells are drilled and better facilities are installed in order to get the oil out. At some point, the continuous depletion of the field makes it more and more difficult to increase production, even resorting to improved technology and more drilling. At a given moment, production reaches a maximum and starts decreasing, while deposit depletion continues. Once production goes down to a level where the cost of operation exceeds the economic benefits of the crude produced, the field is abandoned. (Note that the amount of oil available does not need to run out for oil extraction to become unprofitable.)
Applying this model to the entire United States, Hubbert accurately forecast that oil production in the contiguous United States would peak in the late 1960s or early 1970s (based respectively on a total production of 150 billion barrels [24 billion m³] or 200 billion barrels [32 billion m³]). As the theory predicted, U.S. oil production did indeed peak in 1971, and has been decreasing since then. According to this model, complete exhaustion of continental U.S. oil reserves will follow by the end of the 21st century.
Applying the Hubbert Peak to world oil supply is more difficult. Increases in technology lead to the ability to economically extract oil from regions once thought unreachable, and new oil reserves are discovered yearly. The theory therefore has not as accurately modeled production rates worldwide. Compounding the problem is the increasing demand for oil, regardless of supply. Population growth, industry shifts, and world-wide increased industrialization all lead to a growing demand throughout the foreseeable future.
Although world oil does not seem to have peaked yet, new oil discovery peaked in 1964. Despite technological advances, new oil discoveries have decreased each year since then, even as demand has increased. In 2003, for instance, 25 billion barrels of oil were burned world-wide, while only 8 billion new barrels were discovered.
North Sea production peaked in 2002. The latest applications of the Hubbert Peak indicate that all non-OPEC sources will have peak by around 2015, and OPEC itself will peak around 2025. Since there are many unknown factors, predictions vary among researchers.
If world oil were to peak, the inexpensive energy supply that promoted economic growth over the 20th century would cease. Cheap energy has been the foundation over which the demography explosion over the last century has been based, and any scarcity, if not properly substituted, will inevitably lead to major demographic changes.
The most recent time that production declined precipitously was during the Iranian Revolution, when supply was artificially curtailed for a limited time. Oil prices rose to what would be $80 a barrel in today's prices, and a world-wide recession followed.
Some believe that, if accurate, the Hubbert model portends drastic impacts for human culture and modern technological society, which is currently heavily dependent on oil as a fuel and chemical feedstock. Some envisage a Malthusian catastrophe occurring as the cheap oil finally runs out.
Others believe that the rise in oil prices world drive the replacement of oil with other power sources, such as nuclear energy, with the possible introduction of a Hydrogen economy to replace the current oil distribution infrastructure, and the replacement of oil as a chemical feedstock with better use of other hydrocarbons such as coal.
Wider applications
Effects of a world peak
See also
Further reading
External links