PEAK OIL

Jedrus Yves Patron

Hannah Christine Vera Cruz
 Definition:
 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

 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.
 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
 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.

 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:

 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
 Saudi 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
 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
 "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.
 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.
 If 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:

 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-to-

reach, 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.