Predictions about peak oil are inaccurate and empirically denied

Predictions about peak oil are inaccurate and empirically denied

In his paper, Hubbert estimated that the “ultimate potential reserve of 150 billion barrels of crude oil for both the land and offshore areas of the United States.”  Hubbert’s estimate was based on the crude oil “initially present which are producible by methods now in use.”  Using the 150 billion barrel estimate he predicted US Peak Oil occurring in 1965. But to be cautious, he also used a slightly higher figure of 200 billion barrels which produced a peak in oil production around 1970—the figure that Hubbert advocates like to use to demonstrate that Hubbert was prophetic in his predictions.  However, by 2006 the Department of Energy estimated that domestic oil resources still in the ground (in-place) total 1,124 billion barrels.  Of this large in-place resource, 400 billon barrels is estimated to be technically recoverable with current technology.

This estimate was produced before horizontal drilling and hydraulic fracturing or fracking techniques were widely adopted which most authorities believe will yield considerably more oil than was thought to be recoverable in 2006.

Going back to Hubbert’s paper we find that he predicted that by 1970 the US should have consumed half or about 100 million barrels of oil of the original endowment of 150-200 billion barrels of recoverable oil. And by his own chart on page 32 of his paper if we use the assumption of 200 billion barrels as the total potential oil reserves of the US we should be completely out of oil by now. According to his curve and graph, by year 2000 we should have had only around 27 billion or so barrels of oil left in the US and fallen to zero sometime in the mid-2000s.

Yet the US government estimates as of 2007 that our remaining technically recoverable reserves are 198 billion barrels, and this excludes oil that may be found in area that are off limits to drilling (i.e. like most of the Continental Shelf).

And there are another 400 billion barrels that some suggest could be recovered with new methods (which itself is a subset of total in place oil which future technology may make available at an affordable price).

Another example of his under-estimation of oil is US off-shore oil. In his 1956 paper, Hubbert suggests we had 15 billion total barrels, but the US government now estimates there is closer to 90 billion barrels of oil left off-shore–and we have already extracted quite a bit. (I’m not sure if that figure is just for off -shore currently open to exploration or all off shore–since oil exploration is banned on 83% of the US coastline. If this figure refers only to those areas currently available to drill–then the number may be quite a bit higher if all off shore areas were opened to oil extraction).

Hubbert was even farther off in his estimate for global oil reserves, which is not surprising since in 1956 very few parts of the world had been adequately studied.  In his 1956 paper Hubbert  wrote that there was “about 1250 billion barrels for the ultimate potential reserves of crude oil of the whole world.” In his paper he estimated that the entire Middle East including Egypt had no more than 375 billion barrels of oil. Yet by 2010, the Central Intelligence Agency (CIA) estimated that just the “proven reserves” in Saudi Arabia alone totaled 262.6 billion barrels.  Similarly in his paper Hubbert uses an estimate of 80 billion barrels for all of South America, yet Venezuela has 296 billion barrels of proven reserves.

By 2000, the point when Hubbert estimated that we would reach global Peak Oil we would have only around 625 billion barrels of oil left. Just the 558 billion barrels of proven reserves known to exist in Saudi Arabia and Venezuela alone (and a lot more in-place resources) is nearly equal the total global oil supplies that Hubbert estimated would remain in global reserves.  Obviously once again Hubbert’s global estimates were way too low.