One of the most enduring myths about oil is the Peak Oil theory. The theory, first articulated by a geologist, M. King Hubbert, in 1949, hold that since petroleum is a finite resource, production will lead to exhaustion . From then until his death in 1989, he routinely predicted that the end of the oil age was at hand. In retrospect, this has turned out to be more like the periodic predictions about the end of the world that are always sometime in the not too distant future.
The peak oil theory gained legitimacy because geological science held that the amount of petroleum created eons ago by decaying plants and animals was fixed. From time to time, the theory of how oil was formed has been challenged but not successfully. In addition, in the 1950s, King Hubbert predicted that oil production would peak in the 1970s and then begin a steady decline. In fact that is what did occur. Even the US government joined limits to growth advocates and predicted that the world’s oil reserves would be exhausted by the end of the 20th century.
Even though the world did not run out of oil at the end of the millennium, peak oil theorists continued to claim that the end was near and that when it did shortages, economic collapse, and resource wars would occur. As recently as 2010, the Joint Forces Command predicted that surplus oil capacity would vanish in the very near future. The solution to this problem was to rapidly move away from fossil energy and move to low carbon, clean energy fuels.
This week the Energy Information Administration announced that domestic oil production had reached 6 million barrels a day, the highest amount in 14 years. Increased oil production here, Canadian oil sand production, and discoveries around the globe are demonstrating that the peak oil theory is just a theory and not a fact.
What King Hubbert and those who supported or still support his theory did not take into account was the impact of economics, technology, and human ingenuity, the truly inexhaustible resource.
Historically, the limits of existing technology limited how much oil could actually be recovered. This created an incentive to develop cost-effective ways to increase the amount of oil produced and for secondary and tertiary recovery efforts at existing drilling sites that were less expensive than alternatives to oil. With time and advances in technology, it has become possible to make new discoveries in deep water, hostile climates, to extract oil from shale and oil sands, and recover more oil from existing sites. As a result, world reserves and production have increased and the end of the oil era keeps getting pushed to the more distant future.
As more deeper discoveries are made on-shore and off, scientists are rethinking the origin of petroleum. Instead of being the result of decay, it may the result of materials involved in the formation of the earth.
Whatever theory is correct,one thing is clear, we are not about to “run out”of oil. That possibility is depressing to some environmentalists and off-oil advocates. The amount of oil ultimately recoverable will also be limited by production costs and technology. As one wise person once observed, the stone age didn’t end when we ran out of stones and the oil age won’t end when we run out of oil.
Advances in technology are opening up potential alternatives to oil as a transportation fuel. It is in our national interest to pursue them and to allow the market to determine which are commercially viable and when a transition should take place. In that pursuit, however, there is a need to be vigilant to defend against those who seek government subsidies and special treatment to promote fuels that enrich them at the expense of the economy. Crony capitalism is not the way to move beyond petroleum.