Future of Peak Oil

by  Jessica E. Jones

In 1956, Marion King Hubbert predicted the US’s oil production would continue to increase until eventually peaking between 1965 and 1970, and then steadily declining, following a bell curve distribution.  While controversial at the time, the US’s oil production did peak late 1970/early 1971 and steadily started to decline.  Hubbert’s prediction seemed to be a roadmap to the end of oil and a prediction of when peak oil may happen on a global scale.  Enter the expansion of hydraulic fracturing.

With peak oil, the fear was not that the oil was going to run out but that it was no longer going to be economically viable to recover, pricing would spike and economic collapse would be imminent.1 Hydraulic fracturing is not a new technique, but the technology advanced to a point of making it more economically feasible.  Suddenly, proved resources turned into proved reserves.  Conservations and peak oil theorists were once again branded alarmist and cast aside, with pushes towards a renewable or greener future were overshadowed by an abundance of cheap and available fossil fuels.  No longer did an imminent need to prepare for a future lack of resources exist.

Where does peak oil stand now?  Is the only change to the right side of the bell curve? Will the US see a plateau in production and how far off is peak oil for the rest of world?  First, the bell curve distribution for declining production rates will differ significantly from Hubbert’s prediction.  Possible scenarios include a plateau and then a continued trend downward or a second smaller production peak with a trend downward, either of these could include sharp exponential drop-offs to the production rate as opposed to smoother trends downward.  While world oil production peak is often modeled after the US’s, it is likely these two graphs could take vastly different routes due to emerging economies and expanding demand.

Currently, the US is in their second peak of oil production.  Previous to November 8th, 2016, popular opinion believed stricter environmental regulations were on the horizon for hydraulic fracturing and shale oil recovery, leading to another decline.  Hopefully moves toward electrification and greater fuels efficiency would leave the nation better prepared for an oil crisis similar to those experienced in the 1970s, or the economic depress of the late 2000s when US oil production slipped to its lowest rate since the 1940s. Since the election of President Elect Trump, these hopes have dissipated slightly.  A new scenario of a second peak, equal-to or greater-than that of the first peak, is now possible.  According to data from the US Energy Information Administration (EIA), 3,436,515,000 barrels of crude oil were produced in 2015, compared to 3,517,450,000 produced in 1970.2 As OPEC has promised a deal to cut oil production, a price increase may further incentivize US production.3 Creating a second oil peak seemingly leaves Hubbert’s curve in shambles unless the peak is at a magnitude that makes the 1970s, and subsequent decline, appear as a smooth blip.

If it turns out peak oil will not occur for years to come, the environmental consequences could be immense.  With increased public awareness and environmental pressures, there is hope that the nation and the globe will better prepare for the eventual decline of oil well before the finite resource expires.

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