There are several theories about what could happen to oil production and demand in the near future, as well as the possible economic and social impacts in the world. Since the oil crisis of the 1970s, this issue has produced a lot of concern from many points of view. Today, I will make a brief introduction to one of these theories, which can help us to understand the current reality of the oil world, as well as the future possibilities.
Hubbert’s peak theory talks about the long-term rate of oil depletion (including other fossil fuels, like natural gas) and predicts that the world oil production will peak at one point, and then decline as fast as it did. Originally, it was thought that the peak would come in the year 2000, which, of course, did not happen, and several experts believe that it could actually happen in 2020, although the exact year of the peak has not yet been precisely established. The International Energy Agency (IEA) stated in November 2010 that crude oil production peaked in 2006, but others disagree.
Hubbert’s supporters claim that his prediction turned out to be erroneous due to unpredictable factors that delayed the peak appearance. One of these factors would be the 1970s energy crises, which drastically reduced oil supplies, which led to a shortage that led to a reduction in consumption. In particular, the 1979 energy crisis and the peak in the price of oil barrels in 1990 due to the Gulf War were similar phenomena but had less serious effects on the supplies. With regard to demand, the recessions of the 1980s and 1990s also reduced the demand for crude oil consumption. All these effects theoretically would have been the cause of the delay of the petroleum peak.
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Nevertheless, many dismiss this theory. Some experts, like Robert Rapier, claim that Hubbert was totally wrong about oil at all. However, this narrative is widely accepted among the futurists who study this subject, as well as between oil engineers and the CEOs of hundreds of multinational oil companies around the world. The important thing here is not whether there will be a peak oil, but, especially, when it will occur. Obviously, we are talking about a non-renewable resource that will be exhausted at some point in history, and this means that in the future it will certainly reach the extraction limit. Of course, the occurrence of the peak depends to a large extent on possible discoveries of new reserves, as well as increasing the efficiency of current deposits, deep extraction or the exploitation of new forms of unconventional oil. But one day there will be no more, and that is clear.
King Hubbert, a Texan geophysicist, formulated his theory during the 1950s, and because many of his predictions were met decades later, he became an important reference in the oil world. His theory, based on mathematical models, consists in that the extraction of an oil well is the cause of a curve with a maximum point of production, located in its very center. At that point, each barrel of oil becomes progressively more expensive to extract until production ceases to be profitable. This is because you need to spend more oil on its extraction than what you actually get from extracting it. This paradox means that you need to consume the equivalent of one barrel of oil, or more, to get that same barrel of crude from the subsoil.
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We all know that the consequences of a global oil crisis would be disastrous. The arrival of the peak of oil would cause a shortage of this resource, yes, but this shortage would be different from all that happened in the past since its causes would be entirely different. The previous periods of shortage had more to do with political reasons. This time, however, the fundamental reason will be the lack of sufficient crude to supply the entire demand. The effects and severity of this shortage will depend on how quickly the production decreases and whether preventive measures are taken to adapt society to the use of alternative energies. But those alternatives may not even arrive in time. In that case, all products and services that require the use of oil will be scarce, reducing the standard of living of all countries.
Future scenarios range from the collapse of the industrialized society to those who assert that the market economy or new technologies will solve the problem. Some predict a global catastrophe of apocalyptic proportions that will occur as the inefficiency in crude oil production increases. Some are skeptical. But the rise in food production has reversed a rise in unprecedented population growth over the past fifty years, and the cause of it is that pesticides and fertilizers have petroleum as the basic ingredient, and agricultural machinery also requires oil. And those are facts, not theories.
All this can be seen as an unwarranted paranoia, or as a wake-up call to really focus on the search for other sources of energy.
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* Featured Image courtesy of Jeff Youngstrom at Flickr.com