What is Peak Oil?

Ann-Marie Luciano

It has been amazing to watch the speed with which the peak oil theory has gone from an obscure, left-wing whisper to a front page article once the price of oil started to spike beyond most of our comfort levels.

The theory of "peak oil" is that there will be a point when the maximum rate of global oil production is reached, after which the rate of oil production will decline. The peak oil theory was first used by M. King Hubbert in 1956 to predict that the United States' oil production would peak in the late 1960s. It did (and soon thereafter came the 1970s oil crisis).

According to Hubbert's peak oil model, which has been used successfully to predict peak oil in many other countries, the production rate of a limited resource like oil will follow a symmetrical bell-shaped curve based on the limits of exploitability and market pressures. If you think about it on its most basic level, the peak oil "theory" isn't really a "theory" -- it's common sense. We all know that oil is finite – there isn't an ever-running flow of oil under he ground.

It thus follows that there will come a time when the global oil supply will be depleted. As fewer new oil fields are discovered (which is happening now) and fewer barrels of oil are produced out of the oil fields that already exist (which is also happening now), and as global demand increases (as is occurring in large part due to China and India's exponential development), the rate at which we will reach peak oil will increase. Some are now saying that we have already reached peak oil.

Yesterday, the Wall Street Journal reported on the front page that the International Energy Agency, the world's premier energy monitor, is preparing a "sharp, downward revision" of its oil-supply forecast, which is based on its first comprehensive assessment of the condition of the world's top 400 oil fields. According to the Wall Street Journal, "[a] growing number of people in the industry are endorsing a version of the 'peak-oil' theory: that oil production will plateau in coming years, as suppliers fail to replace depleted fields with enough fresh ones to boost overall output."

This mainstream coverage and acknowledgement of the peak oil theory is fairly recent. Up until a few years ago, most of the discussion on the web about peak oil consisted of doomsday scenarios about how to prepare for the end of the world as we know it. Many websites included instructions about how to make an "off the grid" home, how to sanitize your own water, how to grow your own food. But as industry insiders began to take a hard look at the oil reserve data and readjust their figures based on unexpected demand growth, the concept of peak oil no longer was deemed to be so far-fetched.

One well-known peak oil theory believer is close to home: Maryland 6th district conservative Republican Congressman Roscoe Bartlett has been a vocal believer in the peak oil theory. In 2005, he founded the Peak Oil Caucus, a group of House members who believe the world is near the peak of oil production and that only a reduction in demand can prevent a global economic catastrophe. You can watch Representative Bartlett's peak oil presentation to Congress here. Congressman Bartlett also appears in a thought-provoking documentary released last year about peak oil, Crude Awakening: The Oil Crash. I highly recommend it.

Now that oil prices are really spiking and independent agencies are finally beginning to assess the hard data regarding current reserve levels, hopefully we will get a clearer picture of what the real threat is, when oil might actually peak, and how our government plans on dealing with it. In my opinion, all of this talk about finding new oil fields misses the point: all oil will dry up at some point, so why don't our government and the major oil companies start a real, concerted effort to develop zero oil technologies? If energy that is infinite is ideal, why is solar power still so out of reach for the average consumer? What are the oil companies waiting for? Where is American ingenuity? Why isn't peak oil being discussed by the presidential candidates? Pondering peak oil always leaves me full of questions.