In the sunset

of the

petroleum industry

Hubberts Revenge

The work of geophysicist Marion King Hubbert, Texas oil patch born and then educated at the University of Chicago, he found that the production histories of most oil fields follow a similar pattern. Output climbs slowly after discovery, rises steeply once the reservoir is mapped, slows during the peak-production years, and then declines steeply once the easy-to-get oil is gone. When graphed, this looks like a bell curve. Hubbert became a legend, and his prediction became known as "Hubbert's Peak." His original prediction of a '70's peak, lacking knowledge of new technology to produce from previously inaccessible sources, was discredited. In the past decade -- as the rate of discovery of worldwide oil reserves has slowed to a trickle there seems to be a growing consensus on predicting peak production possible and he might have been essentially correct.

• 1930s – the US Oil Discovery Peak year
• 1965 – the World Oil Discovery Peak year
• 1970 – US lower 48 Production Peak year
• 1981 – Discovery/Production Gap the date when production began to exceed discovery

The U.S. has increased its world-leading consumption of oil by 20% in the past decade.

US Peak Production

The Association for the Study of Peak Oil, are a group of European scientists who estimate that maximum oil production around the globe will peak in 2008 as demand rises from developing economies such as China. China plus India's population equals 2.3 billion people. For a “European lifestyle” their consumption would equal 28 Billion barrels/year. Problem is current world oil production is 28 Billion barrels/year 1+1=0 whops! Not to worry they don't use that much any how. Well in 2003, Chinas oil demand increased +10% to 0.5 million barrels/day Automobile production increased +50% in 2004, 1st Q: China increased demand to +17% to 1 Million barrels/day.

The USGS World Petroleum Assessment (2000) study was the first to use science-based estimates, taking into account modern technology. Available on the web

As of 1/96, proven + undiscovered reserves are:
OPEC: 853 Billion Barrels - Non-OPEC: 769 Billion barrels
(Former Soviet Union: 39%)

Another similar analysis from the United States Geological Survey (USGS) puts yearly world consumption of oil today at about 30 billion barrels. That comes out of known or proven world reserves of 1.1 trillion barrels, according to IHS Energy, an oil and gas information-gathering group in Tetbury, England. By adding in Canada's oil sands, the Oil and Gas Journal in Houston raises proven reserves to 1.266 trillion. Put simply, with the estimated 2 trillion we started with, the easily recoverable reserve is almost gone!

This then aligns with an alarming conclusion in a report from the United States Department of Energy's National Energy Technology Laboratory this report assembled by Science Applications International in 2/05 concludes in part ''Because oil prices have been relatively high for the past decade, oil companies have conducted extensive exploration over that period, but their results have been disappointing,'' .... ''If recent trends hold, there is little reason to expect that exploration success will dramatically improve"....

A recent study by Douglas-Westwood analysts indicates a 1% annual growth in world demand for oil could cause global crude production to peak at 83 million b/d in 2016 . A 2% growth in demand could trigger a production peak of 87 million b/d by 2011, or 3% growth could move that production peak to as early as 2006. These numbers should motivate us to look quickly for alternatives.

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