It's one of those phrases that instills a spark of dread in all those who know what it Peak Oil. It is the beginning of the end to a resource, to cheap energy, and to a way of life. It is one of those problems, like so many others, that we know about but that so many choose to ignore, as if that will make it go away. So exactly what is peak oil?
The first time the world heard the term peak oil it came from scientist M. King Hubbert, when he first introduced his oil production model, now called the Hubbert Peak Theory. This theory takes data from discovery rates, production rates, and cumulative production and puts them together to create a picture of how much of a nonrenewable resource is available.
So in a graph what you see is two different curves that go up and go down. The first curve represents discoveries. How much new oil are we finding? When that curve starts to drop then the second curve inevitably will follow. This curve is the rise and then decline of oil production. Basically what this means is that no new resources are found. When there is nowhere new to drill for oil, we eventually start using up the oil in already discovered places, until we run out.
Hubbert predicted that peak oil production in the United States would happen around 1965-1970, and it has been determined that this peak was achieved in the continental United States in the early 1970's at 10,200,000 barrels a day. Since this point there has been a gradual decline in oil production. Hubbert then also predicted that the worldwide peak would take place about a half century of his publication on the theory. Hubbert published in 1956, which makes a half century from then, to be right about now.
So lets take a look at what oil is looking like right now. The first thing to consider is demand. Without demand there is no peak oil, because no one wants it to deplete the resource. Unfortunately that is not the case at all. Our world runs on oil. Oil demand has grown on average 1.76% each year from 1994 to 2006. World demand is projected to increase 21% over 2007 levels by 2030 and a study published in the Energy Policy journal predicated that demand would surpass supply by 2015.
In the meantime, out of the worlds largest 21 oil fields, 9 are already in decline. In a stuy of the largest 811 oilfields, conducted in 2007, the average rate of field decline is 4.5% a year. Meanwhile the IEA stated in November of 2008 that the decline in oil production was 6.7% and that that would grow to 8.6% in 2030.
So what are we using all this oil for? Four things: transportation uses, residential uses, commercial uses, and industrial uses, with transportation being the largest consumer of oil. In 2006 the amount of oil used for transportation in the United States made up 68.9% of what the United States used, and like so many resources it is the United States that is the largest consumer of petroleum.
However the United States and Europe are not the only ones using oil anymore. Now developing countries like China and India are using oil too, and at a faster and faster rate. With over one sixth of the world's population now being present in these two countries alone, you can expect that the demand for oil is going to continue to go up, and as it does more oil is going to be used.
So what about discovering new oil? That option, as lovely as it sounds, seems to be off the table. The fact is that there are no major oil finds left. Even the gas companies like Shell and Exxon-Mobil are admitting that there is no more easy gas left to find.
What about drilling in the arctic? A lot of people ask about that when they first hear about peak oil. You get many people saying we can just solve the problem here in the United States by drilling in Arctic National Wildlife Refuce. The environmentalists, the hippies, the tree huggers, or whatever else you like to call them, say that we shouldn't drill there, because it will be bad for the environment.
Well, they're right. A lot of people don't like it, but it will screw up the environment in that area of the world, and it would take a lot longer for it to get fixed than it will take to destroy it. If it meant an indefinitely supply of cheap oil though, I would say go for it. However, unfortunately that is not the case. Above the arctic circle there is somewhere from a pessimistic 30 days of oil, to a highly optimistic 3 years of oil for the United States. That amount will barely make a dent. Add that to the cost of getting people to work up there, the cost of putting in a pipeline, and the cost of repairs every spring when pipelines begin to sink into melting permafrost, and suddenly drilling in the arctic doesn't seem like the best idea anymore.
Like the oil in Alaska, what little undiscovered oil is left will be in the most remote and harshest conditions on the planet which will make it all the harder and more expensive to drill. Meanwhile unconventional oil, such as the oil sands, oil shales, and extra heavy oil, are all more work as well. When oil becomes harder to get it means it becomes more expensive to get and therefore more expensive for the consumer. Turning to these sources for oil is often times seen as a sign of having crossed over the point of Peak Oil and into the decline on the other side.
Peak Oil is predicted to be happening sometime right about now and there seem to be signs of it popping up around the world, from rising gas prices to declining oil fields. There are some optimistic estimations that Peak Oil will begin after 2020. Meanwhile the International Energy Agency says production of conventional crude oil peaked in 2006. So no matter how you look it, we have at best eight years to go before we hit peak oil. No matter when it happens exactly, life is going to start to change.
Stay tuned here at the Paracord Project for the next section on Peak Oil. Find out what is going to happen as oil declines and how will it effect you, and the world we live in.