[Marxism] More on Hubbert
lnp3 at panix.com
Wed Jun 2 06:56:24 MDT 2004
NY Press, June 2, 2004
THE COMING ENERGY CRUNCH
A $2 gallon of gas is just the beginning.
By Aaron Naparstek
IN 1956, a Shell Oil geologist named M. King Hubbert stood up before a
meeting of the American Petroleum Institute and, much to the chagrin of
his bosses, predicted that oil production in the continental United
States would peak and begin to decline starting in the early 1970s.
According to his colleague and author of the book, Hubbert's Peak, Ken
Deffeyes, "Almost everyone inside and outside the oil industry rejected
Hubbert's analysis." They simply didn't want to hear it. The 1960s was
the greatest decade of global oil discovery ever. Vast new reserves were
found all over the world. Soon all but a faithful few simply forgot
about Hubbert's forecast.
Hubbert arrived at his prediction through an analysis of oil-field
discoveries. By 1956, after drilling tens of thousands of holes across
the continental United States, some oilmen had a pretty solid idea of
what was in the ground. The discovery of new reserves in the lower 48
had peaked in the 1930s and had been in decline ever since. Hubbert
noted that, when plotted over time, the rate of discovery formed a
nearly perfect bell-curve. He theorized that the annual rate of oil
production would form a similar bell curve, more than a few decades
later. The highest point of this second curve would be the year that the
U.S. produced more oil than it ever had before and ever would again.
That would be the "oil peak."
As Deffeyes is quick to tell you, "Old Hubbert was right." America never
again produced as much as it did in 1970, despite a drilling boom that
produced four times more oil wells each year. Since then, oil production
has been in steady, rapid decline—the downhill side of Hubbert's bell
curve. Today, we extract about 3.4 million barrels per day from the
lower 48, about one-third of what we were getting at peak.
In recent years, scientists have built on Hubbert's techniques in an
effort to discover how close we are to global oil peak. Though the
estimates vary, everyone agrees that the question of global peak is not
"if" it will occur, but "when." Based on 65 studies published over the
last 50 years, the UK-based Oil Depletion Analysis Center estimates the
world's original endowment of sweet, crude "conventional" oil to be
somewhere between 2000- and 2400-billion barrels. As of today, humanity
has consumed close to half that total.
The consequences of this are hard to overstate. Oil fuels 95 percent of
all transportation and a significant portion of global food production.
Industrial societies are dependent on a vast, steady flow of inexpensive
petroleum for just about everything we make and do. Disrupt this flow,
and modern society as we know it is inconceivable.
Global demand for oil has increased sevenfold over the past 50 years. In
1986 human beings consumed about 54 million barrels of oil each day.
Today we use about 82 million. Though Americans make up only 5 percent
of the world's total population, we consume more than one-quarter of
this energy—about three gallons per person each day. U.S. oil demand
sets a new record every few months.
The developing world, led by China, is catching up to us. In the last
decade, Chinese oil consumption has doubled, while Chinese car ownership
has jumped from 700,000 to seven million.
"There are basically six and a half billion people on earth today and
five billion of them barely use energy. They all aspire to," says Matt
Simmons, chief executive of Simmons & Company, the world's biggest
energy-industry investment bank.
Yet new sources of oil are becoming increasingly difficult to find and
more expensive to develop. Global discovery peaked in 1964 and has
declined ever since. In 2000, there were 16 discoveries of oil
"mega-fields." In 2001, we found eight, and in 2002 only three such
discoveries were made. Today, we consume about six barrels of oil for
every one new barrel discovered.
The U.S. Dept. of Energy estimates that the world will require 120
million barrels a day by 2025. To meet that demand we must find the
equivalent of 10 new North Sea oil fields within a decade. These fields,
before peaking at the end of the 90s, were producing close to six
million barrels of oil per day. Today, we are hard-pressed to discover
one new mega-field, let alone 10 reserves equaling the size of the North
Sea, which is now in serious decline. This year, 11 new mega-projects
came online; next year, 18 will start producing. But by 2008 only three
big new fields are scheduled to start flowing, with no new projects on
track for 2009 or 2010.
According to Dr. Colin Campbell, a former exploration geologist and oil
company executive who is generally considered to be the dean of global
oil depletion experts, "there is no way on Earth" that level of demand
predicted by the U.S. government and many oil industry analysts "can be
Just as Hubbert predicted for the U.S., a decline in discovery presages
a decline in production. Says Campbell: "If you add it all together, you
get a peak of what I call ordinary oil in 2005 and a peak of
unconventional oil in around 2007. By 2010 volatility comes to an end.
Then, terminal decline."
Campbell's oil peak prediction is right in line with no fewer than 12
recent studies, using a variety of different assumptions and demand
projections. They all foresee accelerating decline in global oil
production within the coming decade. Even the most conservative studies,
using highly optimistic estimates of future oil discoveries and low
estimates of future demand, predict a global oil peak by 2020. No matter
how you slice it, global oil supply will soon begin a steep, permanent,
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