Shell geologist Marion Hubbert mathematically calculated a US Oil peak in production in 1969. He collected data on how much oil had been discovered and produced in the lower 48 states from 1901 until 1956. His data showed that US oil reserves had risen rapidly from 1901-1930 and then slowed with an oil production drop at a rate of approximately 2 percent per year after 1969. The truth of the matter is that he was right.
More recently geologists and economists have been debating over predictions on a global scale using Hubbert's Curve. World-scale data spreads a complex series of factors and opinions that are based on founded and unfounded reserves, OPEC leverage or manipulation, new technologies to optimize production, alternative and nuclear fuel offsets, systematic overbooking of reserves to inflate valuation, and speculative demand from developing nations. Based upon interviews with numerous oil companies,Orwel concludes that we have a best case of 30 years. This best case is driven by economic drivers prevailing in the above factors. Some worst case predictions (geologically) passed us last year as the possible peak.
My personal conclusion is that we have a finite oil capacity on this planet and that the appetites of India, China and other developing nations are going to knock us off of our predictive optimism, making a peak of 2021-2026 actually look good. Even with electric propulsion, renewables, biofuels, and all the other energy sources in play, we are still going to come up shallow on crude oil.OK, I'm going to leave this topic for now. Oil seems have settled into a bit of a groove lately near $70/barrel as the world waits to see how much of a global recovery we're going to have how soon. Feels like we're a million miles away from last summer's $147/barrel price peak and the steep descent to $30/barrel after that. It's not quite "Remember the Alamo," but you should definitely remember the volatility.