(106h) Down the Hubbert Curve

In March 1956 M. King Hubbert, who was at that time Chief Geologist with the Shell Development Company published a seminal paper with the title “Nuclear Energy and the Fossil Fuels” (Hubbert 1956). In this lengthy and authoritative paper, which was presented before the American Petroleum Institute in San Antonio, Texas, Dr. Hubbert showed how key fossil fuel resources in the United States, particularly coal and oil, were of finite size and that their output would reach a maximum, and then decline. Dr. King’s forecasts for the production of oil in the United States were accurate; he predicted that oil production would peak in the early 1970s, and that is what has happened. (The widely-used term “Peak Oil” is frequently accredited to Dr. Colin Campbell (2001)).

In the fifty years since the publication of Dr. King’s paper great advances have been made in finding and extracting oil from what were considered to be marginal fields. But Dr. King’s overall conclusion is still valid. Production of oil in the United States remains below the 1970’s peak. Although Dr. Hubbert’s analysis was confined to the United States, subsequent analysts applied his insights to other parts of the world. For example, the book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (Simmons 2005) by the late Matthew Simmons achieved wide recognition by showing that the concept of peak oil most likely applies to reserves in Saudi Arabia, and other nations such as Iran and Kuwait.

The purpose of this paper is to examine how oil production and consumption have changed in the last five years, and to examine whether or not the concept of Peak Oil remains valid. Key to this discussion is an understanding of the concept of Energy Returned on Energy Invested (EROEI). It is concluded that the concept of Peak Oil, as first postulated by Dr. King, remains valid and current, and the production of oil peaked in the period 2005-2011 and is now set to move down the right hand side of the Hubbert Curve.

The title of this session is Challenges in Instituting Energy Savings Project in the Present Market Conditions. If the production of oil and has indeed already passed a peak then the challenge is not to do with “instituting” energy savings; those savings are going to occur whether we like it or not. The challenge will be to determine how the process industries can restructure themselves given that the energy resources available (both as direct energy and as petrochemical feedstock) will be in decline and that there will be intense demand for those same resources from other areas of the economy.