Hubbert’s Peak Explained

When we speak of oil running out, we consider our oil reserves much like a bucket of water, with us pouring its contents out in a continues stream until the bucket is suddenly empty. A graph of the supply would look like this-

When you think about it, this seems a rather simplistic, if not a childish concept, for it’s very seldom any complex system behaves in such a linear simplistic way. Mr. M. King Hubbert, a geologist with Shell Oil Co., did research into production of oil wells using mathematical models to predict production.

He found that individual oil wells initially produced little oil, but increase until reaching a plateau. Oil production remains at this plateau for the bulk of the oil well’s life, then tapers off until production ends. To model the production of an oil field, Hubbert took the curves for individual wells, and summed them together to get an bell shape curve. Just as with the individual well production, the field’s production starts slow, ramps up to reach a plateau, goes for some time before tapering off with the field exhausted.

In 1956 Mr. Hubbert¹ applied these modeling techniques to American domestic oil production (lower 48 states) and correctly concluded that American oil production would peak in 1969. Others have continued Hubbert’s work, refining and applying mathematical modeling techniques to the worlds oil reserves. While most consider the world’s reserves to last past 2040, these models predict that Hubbert’s peak for the world’s oil reserves would occur between 2004 and 2010, which it did. That peak occurred in late 2007 and is what caused the 2008 economic crash. The oil was in the ground, but we couldn’t physically pump it up fast enough to meet the worlds demand for oil.

And shortages are shortages . . . irrespective of the cause.

Now both China and India are each building a massive consumer based economy, which includes the ubiquitous automobile, creating vast new demands for world oil. This promises more detrimental pressure on the oil supply and on our economic future . . . particularly if Hubbert’s peak continues to be proven true.

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1) "The End of Cheap Oil", Colin J. Campbell, Jean H. Laherre're, p78-83, Scientific American, Vol No. , March 1998, Scientific American Inc., 415 Madison Avenue, New York, N.Y. 10017-1111