An Introduction to Peak Oil Theory
Between War in Iraq and Rising Prices, Peak Oil is Gaining Attention
Introduced by M. King Hubbert inN 1949, peak oil theory has many present supporters, from geologists to investment bankers.
Energy has become an increasingly contentious issue on the world stage, from conflicts in the Middle East to the American "additction." Beneath these is a larger debate-- the idea that world oil production has reached a peak and is entering a decline. The following article explains the theory of peak oil and introduces some of its key supporters.
The Theory of M. King Hubbert
During the 1950's, '60s, and '70s, M. King Hubbert became a world-renowned geophysicist due to his disturbing prediction that the fossil-fuel era was to come to an end in the relatively near future.
Hubbert noticed that the production of typical oil reservoirs tend to follow a bell-shaped curve, reaching a peak and then declining irreversibly. He predicted that oil production in the United States would peak between 1966 and 1972. Although dismissed by most oil companies, economists and government agencies, the actual peak did occur, in 1970.
Hubbert then estimated that global oil production would peak between the years of 1990-2000. Due to inadequate data and minor flaws in the method itself, this prediction is generally considered too pessimistic. However, later researchers have corrected the data and methods, arriving at more reliable predictions that vary only about a decade from Hubbert's (Heinberg, 98-99).
Colin Campbell and ASPO
Perhaps the most renowned supporter of Hubbert's peak oil theory is Colin Campbell, co-founder of the Association for the Study of Peak Oil (ASPO). A former geologist for Texaco and Amoco, he was also an executive and consultant for a number of oil companies. In the article "The End of Cheap Oil?" he came to the following conclusion:
"From an economic perspective, when the world runs completely out of oil is thus not directly relevant: what matters is when production begins to taper off. Beyond that point, prices will rise unless demand declines commensurately... we conclude that the decline will begin before 2010."
Kenneth S. Deffeyes
A former oil-company geologist turned Professor Emeritus at Princeton University, Kenneth S. Deffeyes is the author of "Beyond Oil: The View from Hubbert's Peak" and "Hubbert's Peak: The Impending World Oil Shortage." Deffeyes has calculated his own prediction, using Hubbert's method: he claims that world oil production peaked at the end of 2005.
Matthew Simmons and Saudi Oil
Matthew Simmons is author of "Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy." Chairman and CEO of Simmons and Company International, an investment-banking firm, he is considered to be a prominent oil-industry insider and a leading expert on peak oil.
Simmons is principally concerned with questionable estimates of Middle East oil reserves. He argues that Saudi Arabian production will peak in the near future if it has not done so already. Saudi oil officials claim that the country will be able to meet the increasing demand for oil, but as Simmons notes, this claim is largely unsubstantiated as published Saudi reports have never been verified.
The Hirsch Report
In early 2005, a study was commissioned by the United States Department of Energy, entitled "Peaking of World Oil Production: Impacts, Mitigation and Risk Management." Referred to as the Hirsch Report after its primary author, Robert L. Hirsch, the report assesses the results of numerous researchers and encourages governmental action to soften the ramifications of oil decline. The report warms that as peaking approaches, "liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented."
What are the ramifications of peak oil? Go to The Consequences of Peak Oil. To learn about peak oil dissenters, read The Peak Oil Debate.
Sources:
1. Heinberg, Richard. "The Party's Over: Oil, War and the Fate of Industrial Societies." Canada: New Society Publishers, 2003.
