Wednesday, November 25, 2009

M King Hubbert: Peak Oil


Dr Marion King Hubbert, known to all as “M King”, was born in Texas in 1903. He studied for undergraduate and graduate degrees at the University of Chicago getting his PhD in geology and physics in 1937. He taught geophysics at Columbia University until 1941 then joined the United States Board of Economic Warfare before becoming a research geophysicist with the Shell Oil Company in 1943, where he made his famous predictions about the ‘peaking’ of US oil production. After he was retired from Shell in 1964 , he became a senior research geophysicist for the United States Geological Survey until he retired again in 1976. He also held professorships at Stanford University and Berkeley during this period. Hubbert received the Rockefeller Public Service Award in 1977 and Columbia University's Vetlesen Prize in 1981. He died in 1989.


Hubbert made many contributions to geophysics, but his name will live in perpetuity as the man who gave us the bell shaped oil production curve that bears his name and, as a consequence, was a substantial contributor to the hotly debated topic of ‘peak oil’.

In 1948 Hubbert predicted, for any given geographical area, from an individual oil field to the planet as a whole, the rate of petroleum production of the reserve over time would resemble a bell curve (strictly speaking a logistic distribution curve). This became known as the “Hubbert Curve”. Based on his theory, he predicted in 1956 that petroleum production would peak in the United States between the late 1960s and the early 1970s. This and later warnings were dismissed, if not ridiculed, at the time as other predictions of oil peaking had proved false. When US oil production did indeed peak in 1970, Hubbert was proved correct. The Arab oil embargo in 1973-74 and the resulting energy crisis led to an national interest in energy efficiency. In 1975 the US National Academy of Sciences acknowledged that Hubbert had been correct and that the Academy had been wrong in its own predictions.

In 1974, Hubbert projected that global oil production would peak in 1995 "if current trends continue". Two years later he modified this to say that the actions of OPEC could flatten the curve and delay the peak by a decade. The peak oil debate has continued to the current day and it is difficult to judge whether Hubbert was ‘right’. The whole issue is a political and economic hot potato as our modern economy is built on a supply of cheap fossil fuels.

Governments around the world use the International Energy Agency (IEA) outlook for their economic planning. In 2008, the IEA predicted that there would be no peak until 2020. This conclusion was disputed by the UK Energy Research Centre and the Swedish University of Uppsala who concluded that “we are already in the peak zone”. This debate got more controversial in late 2009, when the Guardian newspaper reported that two “whistleblowers” claimed that the IEA had come under undue pressure from the US Government to present an optimistic scenario. One was quoted as saying "we've already entered the peak oil zone." If these earlier peak dates are correct, then Hubbert's 1976 prediction isn't far off the mark.

In 2005, the US Government commissioned a report into peak oil known as the Hirsch report after its lead author. It concluded that the peak was coming soon, but the actual date was unimportant as it would take at least a decade to prepare for the decline in production, so there was no case for delaying preparations. Hirsch also demonstrated that where production had peaked, it was not obvious even a year beforehand and the descent could be rapid – in the UK production fell away in just a year.

Other commentators disagree with Hubbert’s theory. A 2006 report by Cambridge Energy Research Associates (CERA) concluded that a peak will not occur until 2030 and at that point oil reserves will undulate along a plateau for decades. They conclude that Hubbert’s curve falls away too quickly and cannot be applied to global reserves. They, and others, point out that technological advances means that more oil can be extracted from each reserve and include the role of unconventional oil reserves like tar sands and coal to liquids. Critics have countered CERA’s approach saying they haven’t released the data behind their analysis or factored in the likely high cost of unconventional fuels. Reading the company’s press release, the company appears churlish to point out that 2005 US oil production is 66% higher than Hubbert had predicted in 1956. After all, he got the peak spot on, and he was correct in his conclusion that very soon after the peak US production would drop so far that the country would be dependent on foreign imports. It should be remembered as well that it is half a century after the prediction was made and few human predictions have been that close over that timeframe.

Whether the IEA data has been massaged or not, or whether Hubbert’s analysis does or doesn’t prove valid at the global scale, it is surprising that Governments have not engaged in the peak oil debate the way they have with, say, climate change, given the risks involved. Even a 2020 peak requires action by 2010 to prevent chaos in a decade. Hubbert himself would have recognised this form of denial:

"Our ignorance is not so vast as our failure to use what we know."

Hubbert’s main contribution as a green guru is to bring some rigour to the analysis of the exploitation of non-renewable resources. His curve translates the abstract concept of finite resources into the concrete language of the technocratic world that policy makers inhabit. His 1970 prediction was pretty much bang on - given the number of variables involved, the uncertainties and the long timeframes, this was quite remarkable. Of course, if political action is taken to conserve oil (eg OPEC rationing, the US energy efficiency drive in the 1970s) the actual oil production curve will obviously change. But with the whole global economy based on a supply of cheap oil, we may live to regret ignoring the fundamental message that oil will peak.

There is some irony in Hubbert being employed by Shell during his most famous predictions. The oil giant was found to have been exaggerating its reserves in 2004, and had to downgrade its claims twice by 20%, causing a furore amongst shareholders. At the time of the Hirsch report it had one of the most optimistic views of a possible peak (2025), although Shell CEO Jeroen van der Veer stated in 2008 that the peak could be as early as 2015.

Hubbert’s curve has also been applied outside the oil industry. It has been shown to fit patterns of other non-renewable resources like minerals, and has even been applied successfully to renewable but depletable resources including fisheries and aquifer water.

The man himself is reported to have been “abrasive and having a short temper. He did not suffer fools gladly and was always a centre of controversy”. Given what he was up against, these “flaws” may well be seen to be strength of character in years to come.

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