On the Anniversary of Hubbert’s Peak Oil Forecast
[This article by Dave Rollo originally appeared in the Bloomington Herald Times, 3/6/06.]
This month marks the fiftieth anniversary of a historic presentation by M. King Hubbert, one of the most distinguished geologists of his day. Breaking from orthodoxy, the visionary Hubbert presented his forecast of the peaking of U.S. petroleum production to fellow geologists at conference, most of who skeptically condemned Hubbert’s analysis. Back then, the U.S. was the global leader in petroleum exports, and oil was assumed to be of nearly limitless supply. Now, in hindsight, we know that Hubbert’s prediction was accurate, nearly to the year. Since 1971 the U.S. has never produced more petroleum, even as we brought offshore Gulf of Mexico, and Prudhoe Bay Alaskan oil online in the 1980’s (which is now itself in decline). The subject of ridicule in the 1950’s, it has proven abundantly clear that the U.S. entered terminal oil production in the 1970’s, and as a result every year, we produce less and less domestic petroleum.
Despite our own 35 year production decline, the significance of Hubbert’s work has only recently been appreciated and is now gaining greater currency as the world itself nears global peak production. This is perhaps due to the misunderstanding of the significance of peak - not when we “run out,” but when production fails to meet demand, and worse, when decline sets in. In a world where economic output is directly correlated with cheap energy availability the onset of decline is sure to be monumental and without precedent. Every year post peak we will need to make do with less oil even as growing populations and economies require more. Because of this, “The problem of the peaking of world conventional oil production” in the words of energy analyst Robert Hirsch “ is unlike any yet faced by modern industrial society.”
In his analysis (commissioned by the Department of Energy) of what would be required to mitigate the effects of peaking, Hirsch examines the feasibility of substitutes such as the widely touted tar sands of Alberta. He also reveals the inadequacy of market driven solutions, concluding that even with a crash program focusing on the most attractive alternatives (enhanced oil recovery, heavy oil (i.e.,tar sands), natural gas liquids, coal liquids and efficient vehicles) the gap filled by depletion requires 15-20 years of advance effort.
The peaking of global oil production itself is a concept that is not controversial, the debate principally centers on when the peak may occur, the practicality of substitutes, and the descent slope that will have to be mitigated. Hirsch’s report indicates that “soon” means within the next twenty years, given the scale of efforts required to fill the shortfall.
Practicality relates to the scalability of the substitutes – how great a role they might play in offsetting decline, as well as the energy invested in the source compared to the energy that one obtains (net energy gain). Sweet crude oil can be produced in a ratio of 30:1, that is, for every barrel of oil energy invested, we derive 30. In comparison, tar sands are a poor energetic substitute, rendering 3 barrels for every 2 invested. Oil from tar sands require massive amounts of water that further limits the scalability. For this reason, the Canadian Association of Petroleum Producers estimate that we may optimistically increase tar sand production from current 1.5 million barrels/day (mbd), to 3 mbd within the next ten years. This 1.5 mbd gain will be offset by their own conventional domestic production decline of 1 mbd within that timeframe. In any case, the extra 0.5 mbd will add little to the U.S. supply needs of over 20mbd.
The Hirsch report assumes that once peak occurs, we will experience a descent of 2-3% per year of conventional oil production. This projection may prove to be a conservative, estimate, as many fields, especially those that have been exploited with advance technology, deplete faster. One irony of technology in oil extraction is that it may yield a faster descent. Hirsch, in a recent interview, acknowledges this possibility, and affirms the timeliness of bringing alternatives online, but this may mean many more decades of preparation.
Will peak occur soon? Foretelling the future is always fraught with hazard, but we do know that the world has been quite thoroughly explored; the probability of enormous fields the size of Saudi Arabia’s escaping notice is very small. Country after country are now acknowledging their own peaks, as recognized by the International Energy Agencies 2005 Energy Outlook Report, and only three of dozens outside of OPEC will still be pre-peak after 2015. OPEC, the IEA acknowledges, will have to fill the gap, but fewer now have confidence in their ability to do so. Indeed, many like oil banker Matt Simmons believe that OPEC’s reserve estimates are exaggerated, and so may be near peak themselves. The announcement several weeks ago that the second largest field in the world, Burgan in Kuwait, has now entered terminal depletion seems to confirm the view that peak may be at hand.
Hubbert’s warning went largely unheeded, and as a result, the U.S. was left vulnerable to the oil shortages in the 1970’s. Minor in comparison to what lies ahead, we ignore global oil depletion at our peril.
