In 1956, Dr. M.K. Hubbert predicted a peak in US domestic oil production, which hit right on cue in the 1970’s. The bell-shaped function Hubbert used to relate the march of time to rate of oil production contains a single peak. According to Hubbert’s theory, this peak occurs when half the oil to be recovered has been extracted from reserves. This half-way point has come to be known as Hubbert’s Peak. A sharp decline in oil production rate follows the peak until oil is depleted. Some believe this abrupt decline will be accompanied by an unrelenting increase in energy prices, throwing civilization into anarchy.
There is on-going debate whether the planet has reached a global Hubbert’s Peak in oil production similar to the US peak witnessed in the 1970’s. Further complicating the matter, the oil embargo of the mid 1970’s disrupted the global rate of petroleum utilization, resulting in an oil production history with two humps instead of one. This disruption also forestalled the peak (which was predicted by Hubbert to hit right about now) to some point in the future.
Speaking of peak oil, I attended an ExxonMobil company presentation during MIT’s annual career fair last September. Unlike its major competitors, ExxonMobil has made no major forays into renewable energy (the recent BP = Beyond Petroleum campaign, for example). Instead, ExxonMobil remains fixated on oil as its core business. Knowing of dire predictions for impending peak oil production, I asked the following question during the Q&A session: “If ExxonMobile has no investments in renewable energy, won't the company fold when the Earth runs out of oil in the next 30 years?”
The ExxonMobil presenter looked at me sternly and said, “Son, the world is never going to run out of oil, period.” With that, he proceeded to answer the next question.
Interestingly, ExxonMobil is not the only critic of Hubbert’s Peak oil theory. Energy and Power Management magazine recently reported a new analysis by Cambridge Energy Research Associates, “CERA Challenges Peak Oil Theory”. CERA suggests that existing peak oil theory is bogus, and there remain at least 3.74 trillion barrels of oil; not 1.2 trillion barrels estimated by peak oil theory. In addition, Hubbert’s Peak will not be a peak at all. CERA suggests that peak oil production will look more like an “undulating plateau” that may start in 2030 and last several decades. A summary of these findings is available on the CERA Web site.
Nonetheless, CERA’s analysis does indicate that at some point in the future, oil demand will likely no longer be met by natural oil supplies. However, the undulating plateau period provides some breathing room to develop viable alternatives for our transportation energy needs. Inevitably, alternative energy technologies will have their day in the sun, and if CERA’s analysis is correct, you may not have to be Mad Max to survive that long.
I doubt that even the optimistic folks at ExxonMobil could disagree with that rosy assessment.