Peak Oil

PEAK OIL Jedrus Yves Patron Hannah Christine Vera Cruz

Definition: 

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According to Colin Campbell, "The term Peak Oil refers to the maximum rate of the production of oil in any area under consideration, recognizing that it is a finite natural resource, subject to depletion." The term “peak oil” is used to describe the point at which the earth’s supply of oil will no longer be able to meet our energy needs. Oil is not a renewable energy source, and therefore can and will be exhausted at some point in the future. Peak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline.

Marion King Hubbert October 5, 1903 – October 11, 1989

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A geoscientist who worked at the Shell research lab in Houston, Texas. Made several important contributions to geology and geophysics, most notably the Hubbert curve and Hubbert peak theory. Attended the University of Chicago, where he received his B.S. in 1926, his M.S. in 1928, and his PhD in 1937, studying Geology, Mathematics, and Physics. Joined the Shell Oil Company in 1943. Became a senior research geophysicist for the United States Geological Survey until his retirement in 1976.

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Hubbert is most well-known for his studies on the capacities of oil fields and natural gas reserves. He predicted that, for any given geographical area, from an individual oil field to the planet as a whole, the rate of petroleum production of the reserve over time would resemble a bell curve. Based on his theory, he predicted that the overall petroleum production would peak in the United States between the late 1960s and the early 1970s. The curve he used in his analysis is known as the Hubbert curve, and the peak of the curve is known as the Hubbert peak.

Hubbert's peak graph

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According to the Hubbert model, the production rate of a limited resource will follow a roughly symmetrical bell-shaped curve based on the limits of exploitability and market pressures.

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The central features of the Hubbert curve:   

Production stops rising Flattens Then, declines.

Figure 1

Observations in Figure 1:   

There were enormous early discoveries (in the Middle East) in the late 1930's and late 1940's. Worldwide oil discovery peaked in 1964 and has been falling ever since. Every year since 1984, we have been discovered less oil than we have produced. We are not yet 'running out' of oil - there is still a lot in the ground. But, we are reaching the point where the production rate will 'peak' and begin to decline. For a world built on an assumption of continuing growth in energy and the economy, this is challenging news.

Figure 2 OPEC Reported Reserves from 1980-1999 (in Billion Barrels)

Observations in Figure 2: 

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In 1985, Kuwait reported an improbable reserves’ increase from 63.9 to 90.0 billion barrels. Since OPEC production quotas were based on reported reserves, this had the effect of increasing their quota at a time when oil prices and revenue was low. In 1988, other OPEC members followed suit as they could not continue to see their own quotas reduced by Kuwait's new figures. Venezuela increased their stated reserves from 25.0 to 56.3 and Dubai from 1.4 to 4.0 billion barrels. Abu Dhabi increased from 31.0 to 92.2 so Iran topped them with a new figure of 92.9. Saddam Hussein didn't mess around and went for a clean 100.0 billion barrels of stated oil reserves. :D

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Arabia, with the largest reserves resisted making the same response, but eventually could not bear the impact on their quota and in 1990 increased their reserves estimate from 170.0 to 257.5 billion barrels. Despite a decade of high production reducing reserves since then, Kuwait continued to report exactly the same reserves figure of 94.0 through the 1990's. Other OPEC members have similarly unlikely reporting trends. 

OPEC- 'Organization of the Petroleum Exporting Countries'

ASPO 

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The Association for the Study of Peak Oil (ASPO) is a network of scientists, affiliated with European institutions and universities, having an interest in determining the date and impact of the peak and decline of the world's production of oil and gas, due to resource constraints. With substantial oil industry experience, they have prepared their own robust forecast of future oil and other hydrocarbon liquid production. In stark contrast to the prevailing assumption of ever increasing supplies, ASPO and many other independent assessments show that we are very close to peak production in 2005. By 2010 decline will be self-evident, especially for conventional oil.

Factors that affects Peak Oil Theory: 

Technology 

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"Most of the world's oil was found long ago with technology no more advanced than the hammer and hand lens. Some 60% lies in about 300 easily found giant fields. But over the last 20 years, we have seen amazing technological advances in the exploration arena." [Jack Zagar] The industry has and continues to use advanced technology, but the trend is inescapable. We can only find smaller fields that are more difficult to produce. New technology often helps to increase production rates and drain oil fields faster, but rarely does it significantly increase the ultimate amount of oil that can be recovered.

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Population 

Another significant factor on petroleum demand has been human population growth. Oil production per capita peaked in the 1970s. The world’s population in 2030 is expected to be double that of 1980. Some analysts project that people will be much more oil-dependent than they are now.

Possible effects and consequences of Peak Oil:  The

widespread use of fossil fuels has been one of the most important stimuli of economic growth and prosperity since the industrial revolution, allowing humans to participate in takedown, or the consumption of energy at a greater rate than it is being replaced. Some believe that when oil production decreases, human culture and modern technological society will be forced to change drastically. The impact of Peak oil will depend heavily on the rate of decline and the development and adoption of effective alternatives.

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alternatives are not forthcoming, the products produced with oil (including fertilizers, detergents, solvents, adhesives, and most plastics) would become scarce and expensive. At the very least this could lower living standards in developed and developing countries alike, and in the worst case lead to worldwide economic collapse. With increased tension between countries over dwindling oil supplies, political situations may change dramatically and inequalities between countries and regions may become exacerbated.

Positive aspects of peak oil: 

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There are those who believe that peak oil should be viewed as a positive event. Many of these critics reason that if the price of oil rises high enough, the use of alternative clean fuels could help control the pollution of fossil fuel use as well as mitigate global warming. Others, in particular anarcho-primitivists, are hopeful that it will cause or contribute to the collapse of civilization. Ö

Why does oil peak? 

Oil companies have, extracted the easier-toreach, cheap oil first. The oil pumped first was on land, near the surface, under pressure, light and ’sweet’ (meaning low sulfur content) and therefore easy to refine into gasoline. The remaining oil, sometimes off shore, far from markets, in smaller fields, or of lesser quality, takes ever more money and energy to extract and refine. Under these conditions, the rate of extraction inevitably drops. Furthermore, all oil fields eventually reach a point where they become economically, and energetically, no longer viable. If it takes the energy of a barrel of oil to extract a barrel of oil, then further extraction is pointless.