Peak oil

Hubbert's Peak Refuted: Peak Oil Theory Still Wrong

Who's a flat-earther now?

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OilRigSunset
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As I have explained earlier geologist M. King Hubbert famously predicted in 1956 that U.S. domestic oil production in the lower 48 states would peak around 1970 and begin to decline. In 1969 Hubbert predicted that world oil production would peak around 2000. Hubbert argued that oil production grows until half the recoverable resources in a field have been extracted, after which production falls off at essentially the same rate at which it expanded. This theory suggests a bell-shaped curve rising from first discovery to peak and descending to depletion.

Hubbert has many peak oil disciples. For example, Princeton geologist Kenneth Deffeyes has written three whole books in the past decade and a half insisting that peak oil is nigh and disaster will soon follow in its wake:

In two earlier books, Hubbert's Peak (2001) and Beyond Oil (2005), the geologist Kenneth S. Deffeyes laid out his rationale for concluding that world oil production would continue to follow a bell-shaped curve, with the smoothed-out peak somewhere in the middle of the first decade of this millennium–in keeping with the projections of his former colleague, the pioneering petroleum geologist M. King Hubbert.

Deffeyes sees no reason to deviate from that prediction, despite the ensuing global recession and the extreme volatility in oil prices associated with it. In his view, the continued depletion of existing oil fields, compounded by shortsighted cutbacks in many exploration-and-development projects, virtually assures that the mid-decade peak in global oil production will never be surpassed.

In When Oil Peaked, he revisits his original forecasts, examines the arguments that were made both for and against them, adds some new supporting material to his overall case, and applies the same mode of analysis to a number of other finite gifts from the Earth: mineral resources that may be also in shorter supply than "flat-Earth" prognosticators would have us believe.

Who's a flat-earther now?

Instead of falling, global oil production has soared. In the United States the Energy Information Administration predicts that domestic oil production will average 9.43 million barrels a day this year, the most since 1972. Given the fall in oil prices, exploration and production will trail off a bit to 9.3 million barrels per day next year. The low point in U.S. production was in 2008 when pumping averaged 5 million barrels per day. Peak oilists always underestimate the power of markets to mobilize human ingenuity.

As it happens, I analyze the "peak everything" fallacy in my forthcoming book, The End of Doom: Environmental Renewal in the Twenty-First Century (St. Martin's Press, July 21).

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  1. Peak Oil? Never heard of it, the new concern is peak fresh water.

    1. Are you in California? Because here in CO our current concern is what to do with all this new fresh water. I suggested refilling the reservoirs that were drained to appease Kansas during the drought, because it is conceivable that there may be a time that we do not have such an abundant supply of water again, but the collective response was pretty much fuck me.

  2. As recent events have proved, Peak Derp is another milestone that has not even been approached.

  3. I think we can all expect some moving goal posts soon, if it hasnt happened already.

  4. We’re going to run out of oil 20 years from today. And it’s always today.

    1. That’s also when we’ll have commercially viable Fusion power! See, there’s no need for overpriced ‘renewables’

      1. And practical electric cars run by sentient AI!

      2. I think fusion will be a viable alternative within 20 years from now. But government, harassed by environmental groups lobbying against the next boogeyman, will stop it from being implemented. We’re on our way back to the dark ages. The brief period of enlightenment is over.

        1. A good place for this:

          Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded ? here and there, now and then ? are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

          This is known as “bad luck.”

          1. Advances which permit this norm to be exceeded ? here and there, now and then ? are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people.

            Inequality!

            Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

            Ahhhh, equality.

        2. We’re on our way back to the dark ages.

          No we’re not stop being an idiot.

    2. There has to be constant doom just over the horizon. Without it, alternative energy pimps don’t get their grants and credits and breaks and end up with nothing to do all day.

    3. Past predictions about oil production are not something that should be used as an argument for plentiful oil. For that you should use discoveries and reserves and talk about what is going to come online in the next few decades. It becomes difficult to make a case for plentiful oil once oil field discoveries are examined. They peaked in the 1960’s and have declined every decade since.

  5. If only those darn Saudis would tell us what they have.

  6. Semi-OT: Who said they loved the Penn & Teller Bullshit episode on nuclear power? Watched it last night – it was hilarious indeed. Loved the lezbeens in the Prius gag.

    1. This seems relevant:

      https://reason.com/blog/2015/06…..it#comment

  7. “[…]Deffeyes sees no reason to deviate from that prediction,[…]”

    Mr. Ehrlich, Mr. Malthus, please meet Mr. Deffeyes. I’m sure you’ll amuse each other for hours. Oh, and Mr. Ned Lud will be along soon to suggest some solutions to the problems you see.

  8. As it happens, I analyze the “peak everything” fallacy in my forthcoming book, The End of Doom: Environmental Renewal in the Twenty-First Century (St. Martin’s Press, July 21).

    Bailey, you fool, we’ll never reach Peak Doom. there’s too much money in it.

    1. Or Peak Derp. That will forever be just over the horizon.

      1. Peak Derp has no horizon. It’s an expanding universe.

        (Not a true threat)

  9. Peak oilists always underestimate the power of markets to mobilize human ingenuity.

    This point will *always* be lost on command and control collectivists. They can’t see beyond the poorly contrived model of markets that they use, so they will always get the wrong answer. GIGO.

    [pours one out for Julian Simon]

    1. Well, this is what happens when you allow pinko geologists to have an opinion about economics.

      1. I suppose a “pinko geologist” is one forecasts peak oil because of his political persuasion. But unfortunately, geologists who predict Peak Oil do it from scientific analysis. The economists and monopolists who crow about oil being plentiful for decades or centuries, are the ones doing so out of faith-based beliefs. The geologists have numbers and graphs. The economists and monopolists (and their followers) have faith.

        1. Peak oil makes sense on the surface. If every barrel of oil has a cost of extraction, then by the law of large numbers that cost per barrel will be normally distributed. When you see the growth of production start tapering, you can now fit what you have seen in the past to a normal distribution in the future, predict the peak, and predict the supply past the peak.

          So, yes, this makes sense … to a geologist.

          An economist, on the other hand, knows that it is quite a bit more complicated than that. In particular, the cost of extraction will change as extraction technologies change, and the amount desired at the current cost of extraction will change as demand for current uses changes, as new uses are discovered, and as substitutes for prior uses are found.

          So under one realm of extraction technology and usage pattern of oil, the bell curve taper appears very clearly and geologists then predict peak oil. Then in an even more gruesome failure to comprehend economics, they predict Peak Oil as the downfall of western civilization.

          In the meantime, higher prices induce new technologies that change the cost of extraction for the backside of the original bell curve, putting us on a different bell curve — and we have no idea what it looks like. Granted, again by the law of large numbers the sum of these bell curves is another bell curve. But the peak of that cumulative bell curve is entirely unpredictable from prior observation.

          1. Economists were unable to predict the 2008 global meltdown. I fear that any predictions they make with regard to what happens with oil and what would happen in terminal decline, would be about as accurate as their 2007 economic predictions.

  10. Simple economics. When the supply goes down, the price goes up. This incentivizes exploration that was previously uneconomical, which replenishes the supply lost to wells that are drying up. And so on and so forth until the price gets high enough that currently uneconomical alternatives to oil become economical, and then the oil that’s left stays underground. For some reason people on the left seem physically incapable of understanding this. I suppose it’s because they seem to only understand emotional argument. Rationality just isn’t their thing.

    1. sarcasmic|6.10.15 @ 11:41AM|#
      “Simple economics. When the supply goes down, the price goes up.”

      In “The Wages of Destruction”, Tooze mentions how the German synfuel industry started:
      In the ’20s, many were convinced all the world’s oil had been located, so I.G. Farben started making synfuel from whatever carbon they could use. It was many times more expensive than oil, but oil prices climbed too.
      So prospecting took off with the result that in not too long, there was an oil glut, and I.G. Farben had to appeal to the (then new) Nazi gov’t for subsidies.

  11. in the past decade and a half insisting that peak oil is nigh and disaster will soon follow in its wake

    Interesting. I don’t know what his politics are, so I won’t attribute this to him, but there are plenty of folks to say that oil depletion isn’t a disaster, but will be a boon to society (and even create jobs!).

    There was a barge out in the water in Seattle protesting the shell platform rig with the huge banner, “SOLAR IS THE FUTURE, OIL IS THE PAST”.

    It had various people drinking Pabst Blue Ribbon and a guy playing Jimmy Hendrix electric guitar, and an old trailer. And it had six or eight solar panels on it, ostensibly to power the guitar amps.

    I snapped a picture and sent it out to my little ‘texting ring’ and the first comment I got back was, “So the future looks like waterworld?”

    1. Solar is always the future.

      For the past 40 years.

    2. …but hopefully it won’t be overly long and will just get to the good parts quickly. Hopefully.

      1. What I’m interested in is the cigarette replication technology the Smokers had apparently invented. Seriously where the fuck were they getting their smokes? Even a huge stockpile doesn’t last that long if you chain smoke them.

        1. Funny – I thought the same thing! IIRC, the Dennis Hopper character smoked like a fiend.

          “Where that dude be gettin’ his smogs? Shit!”

    3. Not to mention the dozens (or more) Kayaks that were built using petroleum.

    4. “So the future looks like waterworld?”

      Today is Jeanne Tripplehorn’s birthday.

  12. Are we past Peak Global Warming?

  13. Eventually we will run out of oil, but I doubt that will happen any time soon. Could be hundreds of years from now, who freaking knows… by then, we may not even be using oil any more.

    1. We never ran out of whale oil. Not sure why crude would be any different.

      1. We can agree Earth is a finite planet, correct? Or do you believe Earth extends infinitely throughout all time and space?

        1. Mr. Flanders|6.10.15 @ 2:18PM|#
          “We can agree Earth is a finite planet, correct?”

          It is both correct and irrelevant.

          1. Don’t be silly. There’s only so much earth, and thus, there is only so much oil. Not saying that we’ll ever use it all… just saying that if we tried really hard, we probably could. I don’t doubt humanity is capable of anything.

            1. Mr. Flanders|6.10.15 @ 3:17PM|#
              “[…}Not saying that we’ll ever use it all.[…]”

              Which makes the question irrelevant.

              1. I’m not saying that we’ll ever use it all, but there’s still a possibility that we could. You’re being intentionally dense.

                1. It’s silly positions like these that make people look at us like we’re 14 year olds.

                  1. Indeed. Which makes it odd that you keep making them.

                    The last barrel of oil pulled out of the ground will either cost an unbelievable fortune because the uses that oil has been limited to by low supply are beyond phenomenally valuable, or it will be absolutely worthless because all of today’s uses of oil have been replaced by substitutes. Either way, there will still be other barrels of oil left in the ground — barrels either too expensive or too worthless to extract.

                    It is simply not tenable that we’d use all the oil on earth. That’s not how resource pricing works. All costs are opportunity costs, and extracting all the oil on earth requires presupposing some agent like a crazy trillionaire who wants to make it his life’s work.

          2. It is only irrelevant to a faith-based belief of the wishful thinking type that economists and monopolists and their followers will cling to.

  14. “Instead of falling, global oil production has soared. ”

    The link provided to the EIA data shows that North America (Canada 1035.05746 and the US 5408.67103 ) account for 94% of the global increase of 6432.82145 (thousand barrels per day).

    Tar sands will continue upward (slowly) for a long time. However, the US increase from fracking is predicted by the EIA to peak in 2019. So I wouldn’t crow to loudly about Peak Oil being dead, when the main thing that is pushing up global production only has a handful of years before it enters terminal decline.

  15. Peak oil is not a theory but a fact because oil is a limited resource. It can only be a theory if there is the possibility that oil is an infinite resource.

    Hubbert predicted that U.S. conventional prediction would peak in 1970. That’s exactly what happened.

    He predicted in 1976 that global conventional production would peak in 1995 + 10 years. In 2010, the IEA acknowledged that it did peak after 2005.

    In addition, oil production per capita (which is more logical because oil is used by a growing population) peaked back in 1979.

    What’s given in the IEA chart is total oil supply, which includes shale oil production. The use of unconventional production is the best proof that peak oil has taken place.

    Rig counts in the U.S. have been dropping significantly because prices are too low. Higher prices in turn weaken the economy.

    Finally, given technology and human creativity, conventional production should be increasing significantly with production costs and capital expenditures dropping, and there should be no need to resort to unconventional production. What has been happening is the complete opposite.

    1. The use of unconventional production is the best proof that peak oil has taken place.

      What’s Latin for “moving the goalposts”?

      See my comment above. If the definition of “peak oil” is when conventional production peaks, it is patent fraud to use that fact as the basis of Peak Oil hysteria.

      1. Fracking is predicted by the EIA to peak in 2019 in the US. It is a temporary blessing, not a game changer. It may be the only case where technology plus price was able to reverse terminal decline of oil production, despite the frequent claims by the optimists that technology is what makes peak oil predictions wrong. And it will peak in 4 years per the EIA (although that was before the price decline devastated the frackers).

  16. Let WP(t) be the World Production of Oil in barrels per day at time t. Peak Oil is the point in time(t1) when WP(t) = t1. No Peak Oil is the bet that WP(t) is an unbounded monotonic increasing function of time. Therefore 200mbpd oil production at some point in the future would be entirely possible!
    Malthusians understand bounded functions while Cornucopians have bounded knowledge.

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